Crypto-backed mortgages in the Bay Area

What is a crypto-backed mortgage

A crypto-backed mortgage is a loan where your BTC or ETH sits as collateral instead of the house. The lender holds your crypto, you get cash, and you keep ownership of the asset that appreciates (or depreciates) over the loan term. This is different from a conventional mortgage in one meaningful way: a normal home loan is secured by the property itself. A crypto-backed mortgage is secured by your wallet.

The lender is advancing you a percentage of the value of your crypto, in USD, at closing. You pay the loan back over a fixed term with interest. As long as your collateral stays above the liquidation threshold, the loan performs like any other amortizing loan. If your crypto drops below that threshold, the lender can sell your coins to cover the position. That last part is the part most marketing pages skip. For the bigger picture on whether to borrow against crypto or sell it before closing, see the holding vs liquidating guide.

How it works (lender perspective)

From the lender's seat, a crypto-backed mortgage is asset-based underwriting. The lender is not verifying your W-2 or pulling a traditional credit score. The lender is valuing your collateral, setting a loan-to-value ratio (typically 50-70%), and pricing the risk of crypto volatility over the term of the loan.

Most lenders in this space hold the crypto with a qualified custodian, often a third-party institutional custodian rather than in their own wallets. The collateral is marked to market daily. If the value drops, you get a margin call and have a window (typically 24-72 hours) to add collateral or pay down the loan. If the value falls faster than you can respond, the lender liquidates the position to recover their principal. Payment history is not a factor in that decision. That speed is both the product and the risk.

Pros and cons

Pros. You avoid a taxable event. Selling BTC to fund a down payment triggers capital gains (federal long-term rates 0-20% depending on income, plus CA state). Borrowing against it does not. You keep your upside: if BTC doubles during your loan term, you owe the same dollar amount and the surplus is yours. The approval process is typically faster than a conventional loan because the underwriting is asset-based, not income-based. For borrowers with verifiable wallet holdings and irregular income (self-employed, founders, contractors), this is often the cleanest path. The full breakdown of the tax tradeoffs lives in the tax implications guide.

Cons. The rate is higher (typically 1-3 percentage points above the prevailing conventional rate). The term is shorter (5-15 years in most cases, compared to 30 for a conventional). The loan is callable: a crypto crash during your term can trigger liquidation regardless of your payment history. The lender takes custody of your coins during the loan, so you are trusting them with operational security for the duration. And the underwriting, while fast on paper, requires the same Coinbase or institutional exchange statements, wallet ownership proofs, and source-of-funds audit trail that any crypto-funded purchase requires.

When it makes sense

A crypto-backed mortgage is the right tool in a narrow set of situations. The buyer has strong conviction in the asset over the loan term. The buyer wants to own a home now rather than waiting two to five years to liquidate and reacquire. The buyer's tax situation makes selling significantly more expensive than borrowing. And the buyer accepts that if crypto drops hard, the home purchase can unwind.

The wrong fit is when crypto is a small speculative position and the home purchase is the priority. If a major drawdown (in most cases, that means a roughly 60% crypto drop) during the loan would derail your life plans, do not borrow against the position. If your goal is a 30-year fixed payment and you do not track the asset daily, a conventional mortgage is a better match. Run the numbers with your CPA and a licensed mortgage broker before signing anything. Most buyers I work with in San Jose and across Santa Clara County end up using a hybrid: conventional financing for the bulk of the home, crypto-backed borrowing to bridge a specific gap.

Which lenders operate in California

Two established names in this category are Figure and Milo. Figure positions itself as the technology-first lender, using a blockchain-native process for title and lien. Milo focuses specifically on crypto-backed mortgages for US-based borrowers. Both currently lend in California. Other lenders enter and exit this market regularly. The space moves every quarter, so when we sit down, I will show you what is actually available right now rather than what was available six months ago.

For Bay Area buyers, the lender choice is rarely the deciding factor. What matters more is which title company and which escrow officer runs your closing. Title companies unfamiliar with crypto-backed mortgages add friction. The right combination is a Realtor who has done this before, a title company that has processed a similar deal, and a CPA who has the timing questions answered before you sign. For the broader strategy, the Crypto + Real Estate pillar page walks through all four major decision points together.

Talk to a crypto-aware Realtor

If you hold BTC or ETH and you are considering a home purchase in San Jose, Santa Clara, Cupertino, or Palo Alto, the right first step is a 15-minute call. I will lay out the realistic paths given your situation, connect you with the right specialists where it makes sense, and run the conversation parallel to your CPA. There is no charge for the initial conversation, and you will walk away with a clearer picture of what the next year could look like.

Schedule the 15-minute call Or run the free AI Visibility Audit