Milo Surpasses $100M in Crypto-Backed Mortgages
Crypto-lending firm Milo has originated more than $100 million in mortgages, cementing a key milestone for the adoption of digital assets in real estate financing. The company announced on Wednesday that its loan volume now includes its largest single transaction to date: a $12 million crypto-backed mortgage for a property in Tennessee. This growth demonstrates a rising demand from investors to leverage their Bitcoin (BTC) or Ether (ETH) holdings for property purchases without having to sell the assets and face potential tax consequences.
Milo’s product is aimed at individuals whose net worth is primarily held in crypto. According to founder Josip Rupena, a typical client might earn $100,000 annually but hold a crypto portfolio worth between $3 million and $7 million. The firm offers loans up to $25 million and is licensed to operate in ten U.S. states, including property hotspots like Florida, Texas, and California.
Model Withstands 65% Drawdowns, Averting Margin Calls
Milo's loan structure is designed for resilience, a critical feature in the volatile crypto market. The company requires borrowers to pledge 100% of the property's value in BTC or ETH, held with qualified custodians like Coinbase and BitGo or a self-custody option. This conservative approach has resulted in a perfect track record of zero margin calls across its entire portfolio, even through significant market downturns.
The loans, with interest rates starting at 8.25%, are engineered to withstand a 65% drop in the value of the underlying collateral. In a severe drawdown scenario, Milo would reduce the loan-to-value ratio rather than force a liquidation of the borrower's crypto. “We designed it in a way that as long as a person can continue to make payments, they're going to be able to continue to have this home,” Rupena stated. This model provides a stable bridge for crypto wealth to enter the traditional housing market.
Milo's product is a game changer in bitcoin lending and unlocks real world use cases for so many bitcoiners.
— Adam Back, CEO of Blockstream.
