Milo Touts Total Crypto Mortgages of $10M
But according to information provided by the company, the actual number of mortgages could be no more than 67.
Crypto mortgage proptech firm Milo announced this week that it had closed $10 million in cryptocurrency-backed loans since introducing its 30-year product earlier this year.
“Through the crypto-lending program, Milo allows borrowers to pledge cryptocurrency through regulated custodians — crypto platforms such as Coinbase or Gemini — and thereby finance as much as 100 percent of the property purchase price, with a cap of $5 million,” the company stated.
The theory is, or at least was, that people with crypto currency could make more on increases in the market value of their holdings than the gap between regular mortgages and crypto ones. Let a lender like Milo hold the crypto currency as collateral and the deposit should continue to gain in value so long as cryptocurrencies are in the ascendency.
Borrowers must put up the full amount of the mortgage on a US property in cryptocurrency. Rates currently start at 6.95%. As with many mortgage rates, that has climbed significantly with Federal Reserve’s increases in its benchmark rates. The archived version of the Milo website from May 1, 2022, showed rates from 3.95% to 5.95%. The average 30-year rate on May 5, according to Freddie Mac data as provided by the Federal Reserve Bank of St. Louis, was 5.27%. The rate is now 5.54%. Milo’s starting rate had increased by 300 basis points.
Milo would not provide specific numbers of actual mortgages when GlobeSt.com requested them. But the company’s PR firm said the company indicated that the mortgages ranged from $150,000 to $3 million. Given the $10 million total figure, that would put the number of mortgages from roughly four to 67.
Should the value of the holdings drop below what they were on the grant of the mortgage, Milo can require additional crypto deposits so that it still has the full value of the home. It’s the crypto equivalent of a margin call. A borrower who is unable to meet the additional requirement could find themselves in danger of losing the home.
Milo received a pre-seed funding round in August 2019, followed by a seed round in 2021 and an A Series in March 2022 for a total funding of $23 million, according to Crunchbase.