Another company has joined in the mortgage industry’s efforts to incorporate digital currencies in home lending.

XBTO Group, a Miami-based crypto finance platform and asset manager, unveiled its bitcoin-collateralized mortgage offering this week. The company plans to offer the product to home buyers making purchases valued at $1 million or more in Florida markets. XBTO expects to finalize its first crypto-backed transaction in the coming weeks, according to digital-asset publication Blockworks.

The firm has partnered with Miami-based mortgage originator Columbus Capital, which will perform due diligence and other application processes to ensure compliance, as well as service the loans.

Joe Haggenmiller, head of markets at XBTO Group

“We have all of the same documents that must be completed, and the application processing and servicing is the same as any traditional mortgage, given we have partnered with Columbus Capital,” said Joe Haggenmiller, head of markets at XBTO Group, in a statement emailed to National Mortgage News “By structuring the interface in this way, we are opening our offering up to a broader audience.”

Hagenmiller expects interest will be coming primarily from those looking to purchase a second or third home.

The primary qualification for XBTO’s mortgage is bitcoin collateral. Borrowers will be able to finance up to 90% of their home purchase with the digital currency after a down payment of at least 10% on a 15- or 30-year mortgage, in either cash or bitcoin. Interest rates will also be comparable to traditional mortgages, the company said. The product provides a means for purchase among cryptocurrency holders as well as nontraditional buyers, such as foreign citizens, not able or willing to liquidate assets.

“Crypto is building generational wealth for many who have invested, but most people holding digital assets don’t want to sell them,” said XBTO CEO Phillipe Bekhazi, in a press release. “Linking digital assets to homeownership is a smart way to hold onto digital-asset holdings, but smartly leverages it for immediate utility, a home to live in.”

The highly volatile nature of digital currencies, however, could prove challenging should bitcoin’s value plummet suddenly. XBTO will maintain minimum bitcoin collateral requirements in its agreement with the buyer, Hagenmiller said.

“However, it should be pointed out that this will be a separate collateral agreement — as long as the homeowner continues to pay the mortgage payment, they will always keep their home,” he added.

In the first quarter this year, the price of a single bitcoin ranged from a high of $47,749, its initial price at the start of 2022, to a low of $35,108 on Jan. 22. On April 1, its price came in at $46,222.

XBTO’s entry into crypto-mortgage lending follows the introduction of a similar bitcoin-backed product from Milo Credit, also based in Miami, earlier this year. Milo customers have the option of leveraging bitcoin as collateral for the entire value of their purchase. Neither Milo nor XBTO loans require conversion of digital assets into dollars or other fiat currency. Previous attempts to incorporate digital currencies into the mortgage process involved liquidating assets into cash, thereby triggering capital gains taxes, and have largely fizzled.

The company’s initial focus on Florida reflects XBTO’s interest in capitalizing on lucrative loan opportunities available in its home state. Average housing prices in Tampa and Miami markets have increased by 31% and 28% year over year, according to the latest CoreLogic Case-Shiller Home Price Index.

Miami is also home to a growing population of digital-asset wealth holders and has actively courted fintechs in its attempts to turn the city into a leading cryptocurrency hub.





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