Frequently Asked Questions

You pledge BTC or ETH as collateral to a lender like Milo or Figure, who applies a 20–50% haircut for volatility — so $1M in BTC might only count as $500k–$800k usable. They fund the home purchase with LTVs up to 100% in aggressive cases (Milo), rates typically 6.5–8%. You keep HODLing post-close, but margin calls hit at 75–85% LTV if prices drop — add collateral or risk partial liquidation. FHFA now accepts crypto as reserves on U.S. exchanges without forced sales in some non-QM guidelines, and 42 states allow it. The pledge isn't taxable, but liquidation triggers capital gains. Powerful for avoiding 20–37%+ taxes on sales, but volatility can wipe gains fast if you over-leverage.

No — the pledge itself isn't taxable under current IRS rules, as you're not selling or disposing of the asset. You retain ownership while it's held in custody (Coinbase, BitGo, etc.). But if a margin call forces liquidation to cover the loan, that counts as a sale and triggers capital gains tax on the appreciated portion. Expect 0–20% long-term or up to 37% short-term depending on holding period and income. Lenders like LendFriend emphasize self-custody or no-call structures to minimize this risk, but most crypto-backed setups carry real tax exposure during downturns.

A sharp drop pushes your LTV higher, triggering margin calls at 75–85% thresholds (e.g., Figure at 80%). You get 24–72 hours usually to add more crypto or cash or pay down principal. Ignore it, and lenders liquidate enough collateral to restore ratios — industry-wide crypto lending sees $170M+ weekly liquidations in volatile periods. Milo reports zero calls on some mortgage books due to conservative buffers, but over-leveraging at high LTV amplifies risk. Rates run 6.5–8% to price this in, well above conventional 6.76%. If you're risk-averse, stick to lower leverage or non-collateral crypto qualification.

Milo leads with $1.2B+ originated, up to 100% LTV, 6.5–7.25% rates, regulated custody, and a strong no-call track record across 42 states. LendFriend hits $800M, 75% LTV, no margin calls via self-custody in 38 states. Figure does $500M at 70% LTV, 7% rates with Coinbase custody. Ledn runs a more conservative play at $300M, 60% LTV, 8% rates. Recent non-QM updates from Newrez and RateFi allow crypto reserves without pledging — but pure collateral plays remain niche and premium-priced.

Yes — bank statement loans verify income from 12–24 months of deposits instead of tax returns. Lenders like New American Funding or Angel Oak average deposits (often 50–100% usable), qualifying you based on real cash flow even if deductions tank your AGI. Expect 7.5–9% rates (1–2% above conventional 6.76%), 660–700 min credit, 15–20% down at 80–85% LTV. With 16.5M+ self-employed Americans and 25–30% rejection rates on traditional loans, this opens doors for gig workers and business owners showing strong liquidity.

Higher costs and scrutiny — rates sit 7.5–9%, plus potential deposit analysis fees if patterns look inconsistent (lumpy deposits, NSFs). Min credit 660–700, reserves often 6–12 months PITI in liquid assets. Lenders adjust income downward (e.g., 50% for business accounts to cover expenses), so qualification might not hit full deposit levels. Dodd-Frank requires ability-to-repay proof, so sloppy books lead to denials. It's not free money — you pay premium pricing for skipping tax documentation.

No, but expect 660–700 minimum at most lenders. Angel Oak or CrossCountry go lower in certain niches. Stronger credit at 720+ shaves rates closer to 7.5%, while 660 might push toward 9%. Compensating factors like big down payments or strong reserves help offset weaker scores. With non-QM growth to $60B, options exist for mid-credit self-employed borrowers, but you'll pay 1–2% more than agency borrowers across the board.

They average monthly deposits over 12–24 months, excluding non-recurring items or transfers. Personal accounts often use 100% of deposits; business accounts 50% to account for expenses. For example, $15k in monthly deposits might qualify as $150k–$180k annual income. Lenders like Griffin Funding or Carrington automate this for speed, but inconsistencies — unexplained spikes, frequent overdrafts — trigger manual reviews or outright denials.

DSCR (Debt Service Coverage Ratio) loans qualify based on rental property cash flow, not personal income — no tax returns, W-2s, or DTI checks. The ratio equals NOI divided by PITIA; most lenders require 1.0–1.25 minimum, where 1.0 means rents exactly cover payments. Rates run 7–9%, LTV 75–80%, credit 660–700. With monthly volumes around $1B and 3,357 loans in late 2025, it's the go-to product for scaling portfolios without personal income qualifiers dragging deals down.

Yes — many lenders accept projected STR income via AirDNA comps or historical booking data. theLender and Griffin Funding are particularly strong here with multiple underwriting methods for short-term income. Long-term leases use actual or market rents minus 5–10% vacancy allowance. DSCR must still hit 1.0–1.25; weaker projections limit LTV or require higher down payments. It's a game-changer for vacation markets, but conservative underwriting assumes some vacancy regardless.

Yes — common structures like 5-4-3-2-1 (5% of loan balance in year 1, stepping down to 1% in year 5) or 3-2-1 add thousands if you refinance or sell early. On a $300k loan, that's $15,000 if you exit in year one. Lenders use them to protect yield in non-QM securitizations. Some waive after year 3 or for strong profiles, but expect them as standard — shop lenders like Visio or Kiavi for milder penalty terms.

Most lenders require 1.0–1.25 at origination — higher ratios get better rates and LTV. Post-close, there are no automatic adjustments. If rents fall below PITIA due to vacancy, market shifts, or bad tenants, you're fully exposed with no relief or payment recast. Underwrite conservatively and stress-test vacancy scenarios before committing. Lenders like Angel Oak stress-test projections, but they can't protect you from market reality after closing.

Bridge loans close in 7–21 days typically, with rates running 9–12%, origination fees of 1–3%, and LTV of 65–80% (or higher on after-repair value for rehab projects). Terms run 6–24 months with interest-only payments. Ideal for timing-sensitive deals like buying before selling or funding renovations — but expensive, so use only when speed genuinely outweighs the cost premium over conventional options.

Yes — short terms mean extensions cost extra fees, and if you can't repay or refinance at maturity, default risks foreclosure. High rates at 9–12% eat cash flow during extended holds. LTV caps limit borrowing power, and 1–3% origination fees add cost upfront before you've made anything. Bridge loans are great for flips or strategic upgrades, but overstay the term and costs compound fast.

When timing matters — moving up without a contingency clause, securing a competitive investment before someone else does, or avoiding dual payments during an uncertain sale timeline. But skip it if you can afford to wait; conventional financing or a HELOC is significantly cheaper long-term. Bridge buys flexibility at a premium — it's only worth it when speed or certainty of execution matters more than the cost.

Non-QM products lack Fannie Mae and Freddie Mac backing, so lenders price in higher risk — rates run 7–9%+ versus the conventional 6.76% average. Add stricter reserve requirements, origination fees, and limited secondary market liquidity, and costs climb further. But for the roughly 15 million underserved households rejected by traditional lending, these products unlock access that otherwise wouldn't exist. The premium is the price of inclusion.

Crypto-backed uses digital assets as collateral — high volatility risk with potential margin calls — for purchases at 6.5–8% rates, but keeps your HODL position intact and avoids taxable sales. DSCR relies on rental income with no personal documentation, rates 7–9%, prepayment penalties common, ideal for cash-flowing properties. Crypto suits asset-rich investors avoiding liquidation; DSCR is built for portfolio builders scaling on rental income. Both beat conventional rejections but cost more — choose based on whether your strength is crypto holdings or property cash flow.