Milo is an American cryptocurrency lending company that specializes in crypto mortgages and has originated over $100 million in home loans, including the company’s largest single transaction to date, a $12 million crypto mortgage.
Milo said in a press release on Wednesday that the company holds mortgage provider licenses in ten U.S. states and has mortgage provider licenses in more states, and that its mortgage portfolio has a perfect track record of being zero-margin despite periods of continued volatility for Bitcoin and other cryptocurrencies.
The company allows cryptocurrency holders to put up their Bitcoin or Ethereum as collateral to obtain loans of up to $25 million without selling their digital assets, eliminating the need for a cash down payment and avoiding costly taxable events.
Milo founder Josip Rupena said that those who were advised to buy Bitcoin 10 years ago by a friend and had the courage to hold it through repeated fluctuation cycles may find that 95% of their net worth is now in the cryptocurrency.
Rupena said these people are typically between 30 and 55 years old and have jobs and maybe retirement accounts, but they don’t have enough income to buy the home they want.
“Our typical transaction is a million-and-a-half-dollar home,” Rupena said in an interview. “A customer might be making $100 a year and their crypto net worth might be between three and seven million. If you were to replace Bitcoin with Apple stock, products like ours probably don’t need to exist. But the fact that consumers own an asset that’s not widely accepted, coupled with their concerns about volatility, means products like ours do need to exist to help them afford a home.”
Milo requires 100% of the property value to be collateralized in cryptocurrency, which can be held by a qualified custodian such as Coinbase or BitGo, or self-custody is an option for those who want full control over their assets. These loans have an interest rate of 8.25% and can also be used to purchase land, finance home renovations and business investments.
Unlike regular cryptocurrency loans, which may require a margin drop of 25%, Milo designed the product to be more conservative and can accommodate withdrawals of 65%.
Even during turbulent times like the past few months, Milo would reduce loan values so customers could continue to have their mortgages if withdrawals exceeded necessary thresholds, Rupena said.
“We’re basically taking 100% of the risk off, bringing it down to 65% or 70%, just like a regular mortgage, and then they can keep making payments. We’ve designed it in a way that as long as a person can keep making payments, they’re going to be able to keep owning the home. They’re not going to lose their home because Bitcoin depreciates,” he said.
To date, Milo has completed multiple transactions in the Miami real estate hotspot, as well as other areas of Florida, as well as Texas, California, Colorado, Connecticut, and Arizona. Rupena said the $12 million deal mentioned in the news release occurred in Tennessee.
The product has the blessing of Bitcoin pioneer and Blockstream CEO Adam Back.
“Milo’s product is a game changer in the Bitcoin lending space, unlocking real-world use cases for numerous Bitcoin users,” Back said in a statement. “While Bitcoin continues to appreciate in value, buyers are able to build equity in real estate without having to sell their long-term belief in Bitcoin.”
