How crypto is creeping into the home mortgage market

The idea of buying real-world real estate with crypto had, for some, become a concept consigned to the digital investment hype pile, viewed with skepticism alongside NFTs and metaverse real estate. But shifts in financial regulation during the opening months of the second Trump administration, like the passing of the GENIUS Act, and the growth of new crypto-focused firms offering personal loans, such as Ledn, is making it more likely cryptocurrency will become a part of the mortgage market. 

On June 30, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac, two government housing finance vehicles that guarantee a substantial volume of home mortgages, to explore the use of crypto to back mortgage lending. In essence, crypto holders — more than one in five Americans, per the 2025 State of Crypto Holders Report — could use digital currency stored on a centralized exchange as a reserve asset to prove their net worth and qualify for a mortgage. Currently, mortgage-seekers must sell any crypto they’d want to include as part of that assessment, potentially missing out on appreciation in the future or incurring a taxable event. 

“The FHFA announcement is a sea change in how people view this,” said Latif Peracha, a partner at venture capital firm M13. “If you can use your Schwab account as reserves, then why not your Coinbase account?”

Peracha sees the shift as a huge business opportunity, with plenty of crypto holders who want to buy a home but not part with their investments. The housing market is “structurally f---ed” right now, he said, with fewer people making enough to qualify for mortgages as interest rates stay relatively high. The combination of rising home costs, dwindling supply, and higher interest rates led the homeownership rate to drop 0.3% last year to 65.6%, according to the Harvard Joint Center for Housing Studies, the first such drop in eight years. Anything that can help more people qualify makes a difference; roughly 12% of renters nationally can cover a 3.5% down payment and closing costs on a median-priced home ($412,500), the 2022 Survey of Consumer Finances found, and a quarter of first-time buyers last year reported using a gift or loan from a family or friend to purchase their home, per the National Association of Realtors.

Just the announcement of an FHFA study raised alarms in some tech and housing circles. Catherine Bracy, a civil technologist and cofounder of Tech Equity, argues the variability and instability of crypto could — if these assets are widely adopted in mortgage markets — cause significant distress to the financial system during a crash. The digital brokerage Redfin released a cautionary statement proclaiming that the use of crypto assets in mortgage evaluations is risky and increases volatility. Redfin Chief Economist Daryl Fairweather, who authored the statement, said mortgage underwriters evaluate assets on a scale of reliability — for example, index funds carry more weight than a penny stock — and that adding digital currencies to the list of acceptable assets would “legitimize crypto.” She said she would be more worried if a large bank were holding a lot of crypto that it wasn’t diversifying against.

“It would be pretty far-fetched for a lender to accept crypto in lieu of a cash payment,” she said. “They don’t like to hold any risk. You can already use crypto to make a private deal outside of the traditional mortgage process. But I don’t see it being incorporated into mortgages more broadly, in lieu of a reserve.”

Along with larger efforts to tokenize real estate and create a new investment class — Manifest has started a US investment fund, and Lofty.ai has created a tokenized investment vehicle for US real estate assets — this shift underscores the changing landscape for crypto and how backers are positioning it to become a larger part of the housing and real estate market. There’s already a growing appetite and legal methods for buying real estate with crypto in Brazil and Dubai.

One of the biggest examples is Figure, a US-based firm that offers crypto-backed loans and home equity lines of credit, or HELOCs. CEO Michael Tannenbaum said the company has lended $15 billion in loans on the blockchain. He speculated that the mainstreaming of stablecoins, over time, would mean larger banks would lose assets, forcing them to reckon more with this move over time.

“It shows that, at least from the standpoint of the largest housing agencies, crypto is here to stay,” Tannenbaum said of the FHFA news. “It’s not some fly-by-night thing. I think that’s more symbolic.”

The biggest advantage to allowing crypto into the mortgage market is that it provides homebuyers with more opportunities for asset appreciation, said Josip Rupena, founder of Milo, which offers unconventional crypto-backed home mortgages. Milo works slightly differently than other mortgage providers: instead of requiring a down payment and monthly principal payments, Milo finances 100% of the purchase price, with buyers posting an equivalent amount of bitcoin as collateral. (Milo works with Coinbase and BitGo as custodians.) The firm has financed more than $65 million in deals since launching three years ago, with purchases in Florida, Texas, California, Colorado, Arizona, Hawaii, North Carolina, Tennessee, and Illinois.  

“Financial products don’t determine why someone would buy a home, right?” Rupena said. “Just because a crypto mortgage exists isn’t reason enough to buy a home. The reason why you buy a home is because you’re at the right time and place in your life.”

Rupena thinks the mainstreaming of crypto as a reserve asset for mortgages would be a significant benefit for investors. The buyer involved in Milo’s first deal, a $700,000 Miami home sold in January 2022, has realized substantial appreciation, with a $4 million home and about $3 million in crypto assets. 

“What we have seen is the clients that we’re working with, they’ve had the courage to hold their bitcoin, but sort of forgoed the desire to buy a house,” he said. “It’s always been present — if you’re 40 and have a kid, you can’t tell me that buying a home isn’t an important life milestone — but you just don’t want to sell an asset you think will be worth a million dollars tomorrow.” 

To protect against instability or a huge drop in crypto value, Milo has structured its loans so if the value of the crypto asset falls 65% or more, the cryptocurrency would be liquidated, Milo would be reimbursed the value of the down payment, and the transaction would become more like a typical mortgage loan, where the borrower would need to continue making regular payments. 

Rupena’s comments about his client base bring up a point about the potential impact of making crypto a formal part of the mortgage market: will it actually lead to more homeowners, or will it just make it easier for the relatively few holders of significant crypto assets to invest in residential real estate and avoid the tax liability of selling such a large asset? 

Advocates argue that if this movement gains momentum as crypto appreciates, it could open homeownership opportunities, or at least make it easier for some buyers, and more acceptance might breed more appreciation. Recent Redfin survey data found that 13% of Gen Z and millennial homebuyers sold some crypto to help fund the down payment on a home. 

“I think this starts opening up access. It’s an access point,” Peracha said. “The bastard stepchild gets accepted into the family, and they’re going to get a seat at the table.”

Patrick Sisson is a reporter covering cities, technology, and business.