Crypto lending platform Moon Mortgage has launched its own “crypto mortgage.”
The move is designed to “help crypto investors materialize their digital wealth,” without the need to sell.
So if you’re a bitcoin hodler who wants to get a taste of real assets without giving up on the ultimate goal, this product could be for you.
It follows in the footsteps of Figure’s crypto mortgage (same name), which was launched back in March 2022.
The difference with this product is the minimum loan amount is a hefty $1 million. Read on to learn more.
How the Moon Mortgage Crypto Mortgage Works
Similar to Figure’s offering, you pledge your crypto assets as collateral for a home purchase.
Moon Mortgage then places a traditional lien against the property and the borrower pays a “competitive rate.”
It’s unclear what those interest rates are like or what kind of loan term and payments are required.
They say a good rule of thumb is to post 100% collateral, so if you need a $1 million mortgage, you’ll need to provide $1 million in crypto.
But future products may have different collateral requirements, so stay tuned.
In terms of liquidation risk, Moon Mortgage says it won’t liquidate your holdings unless they drop by a “pre-agreed to value” during the underwriting process.
You can use their crypto mortgage on either an owner-occupied home or an investment property.
At the moment, their crypto mortgage product is available to home buyers in the states of Colorado, Florida, and Texas.
And is expected to roll out to investors “in most state across the U.S.” for investment properties at some point soon.
How to Apply
While the product is live, there is currently a waitlist to join. So you’ll need to add your name and wait.
Assuming you get the chance to apply, you’d simply submit an online application, which they say takes about 15 minutes.
Similar to a traditional home loan, you’ll upload documents, verify assets, order an appraisal, and go through an underwriting process.
The good news is they’re familiar with crypto investors and entrepreneurs, so those without “normal jobs” may qualify.
If and when the loan closes, they store your crypto collateral with their custodian bank Anchorage Digital, which they refer to as the only federally chartered crypto bank.
Just note that crypto assets are not FDIC-insured products and may lose value.
Supported assets include bitcoin (BTC), ethereum (ETH), and USD coin (USDC).
Moon Mortgage says the expected average close time can be as little as 14 days.
Who Is This Loan Product For?
In a nutshell, holders of cryptocurrency that don’t want to sell their holdings. Also known as the HODL crowd.
Moon Mortgage notes that people like them “could afford to pay in cash” if they sold their holdings.
But they don’t want to lose possible upside exposure, create taxable events, and certainly not be referred to as a “paper-handed investor.”
So it’s folks that want to take advantage of real estate opportunities (or simply own a home) without parting with their bitcoin or ethereum holdings.
The company adds that customers can use their crypto to buy cash-flowing properties, while capturing the appreciation of both real estate and their coins.
To sum it up, they want “fellow crypto investors can have their cake, eat it, and “live in it” too.”
Sounds like a pretty good deal, as long as everything goes up. And of course, you’ll need to weigh their rates and loans terms against a traditional home loan too.
To the Moon!
(photo: Nigel Howe)
