Moon Mortgage debuts crypto-backed home loan product

Moon Mortgage rolled out its cryptocurrency home loan product to three states Tuesday, allowing borrowers to use Bitcoin and other leading cryptocurrencies for their real estate purchases.

The lender is offering crypto-backed mortgages for Colorado, Florida and Texas borrowers with a minimum $1 million application, it said. The company will have a traditional first-lien position on the property's title and control a borrower's Bitcoin, Ethereum or USD Coin, which is tied to the U.S. Dollar.

"While the full convergence of TradFi [traditional finance] and crypto is still a long way off, we are working to bridge the gap now," said Tristan Marino, co-founder and COO of Moon Mortgage, in a statement. "Our crypto mortgage product is how we are doing that; allowing investors to be able to truly materialize their digital wealth into real estate investments, as simply as possible and with compliance and safety."

The product is also available for investment property purchases in most states, Moon said. The expected average close time is advertised in as few as 14 days. A borrower's crypto assets will be stored with custodian Anchorage Digital, the nation's first federally chartered crypto bank, the firm said.

Moon won't liquidate the collateral unless it drops by a pre-agreed to value during the underwriting process, according to the company's website. The lender also previously said it would handle servicing in-house.

Tuesday's rollout also included the debut of Moon's Trade and Borrow product, in which investors can take out loans of 1-month, 3-month or 6-month terms against their crypto assets while still maintaining the ability to trade them. Moon won't lend out the crypto collateral, will provide borrowers the option to renew loans, won't levy a prepayment penalty and won't charge origination fees, it said. 

"Against the backdrop of a very tough year for crypto investors, there is an obvious need to provide more options to help create material value — to ensure that investors can have as many options as possible, just as traditional retail investors have," said Aaron Nevin, co-founder and CEO of Moon, in a press release.

The debut comes amid a "crypto winter" in which values of the digital currencies have fallen precipitously in the past 12 months. Bitcoin has fallen 38% over that time and was valued at $28,237.00 as of Wednesday afternoon. Ethereum, which trades as Ether, also dropped 44% over the same period to $1,908.61 as of Wednesday afternoon. 

Both cryptocurrencies have rebounded since dips around March 10, when Silicon Valley Bank collapsed amid a trio of crypto-friendly bank failures.

Moon revealed its crypto-backed mortgage plans last year when it raised $3.5 million in a seed round led by CoinFund and Cadenza Ventures. The company is based in Miami and has four employees listed on LinkedIn, and one sponsored mortgage loan officer, according to the Nationwide Multistate Licensing System. 

The company isn't the first to offer crypto mortgage products, following Milo Credit's rollout of a cryptocurrency collateral product last April. Milo Credit offers a 30-year loan term for a crypto-backed purchase or refinance loan for up to $5 million, and in September the company claimed it had reached $10 million in crypto mortgage volume.

Miami-based XBTO Group last April also announced it had originated a crypto-backed mortgage, although it doesn't appear to still offer the product on its website. Figure Technologies has also advertised a crypto mortgage product, although it has yet to be rolled out.