Can you buy a house with Crypto? Some lenders say “yes”
Homebuyers who have dabbled in cryptocurrency should be aware that some lenders will allow you to use these assets – conditionally – as part of your down payment when applying for financing.
Under rules promulgated by Fannie Mae and Freddie Mac, who purchase mortgages from lenders on the secondary market, bitcoin and similar currencies must be converted into cash, which must be parked in a bank account for at least two months to be considered as fungible funds.
Fannie Mae “has no specific cryptocurrency policy,” according to a company spokesperson, other than requiring all assets to be converted to US currency and sourced from an eligible asset account. . Freddie Mac, however, is a bit more specific. It will not allow income paid to crypto borrowers to be used to qualify for funding. Assets such as retirement accounts, trust income, and dividend and interest income also cannot be counted if they occur in these forms. You have to exchange them for good old American greenbacks.
The mortgage giant also said that cryptocurrency cannot be included in the calculation of assets used as the basis for asset redemption. But monthly payments on crypto-backed debt should be included as part of your debt payment to income ratio.
The crypto market went off the rails in mid-January. Yet, according to real estate brokerage Redfin, nearly one in eight first-time buyers sold cryptocurrency in the fourth quarter of last year to help pay down payments — almost as many as those who used cash gifts from their family.
Real estate broker Ryan Serhant of “Million Dollar Listing New York” on the Bravo Network has told clients and colleagues that he expects half of all future transactions to be in crypto. In his annual letter, he said his agents were already working on “many crypto transactions.”
Indeed, several companies are getting into the cryptocurrency mortgage arena:
- Milo, a Miami-based lender, is coming to market with a crypto-based mortgage that allows borrowers to pledge their digital assets to purchase property. With the Milo Loan, borrowers can finance 100% of the cost without using dollars for a down payment.
- United Wholesale Mortgage has tested its version of a digital mortgage and said it is ready to move forward once “regulatory uncertainties” are resolved.
- Ledn, a Toronto-based digital asset platform, has announced plans to offer a bitcoin-backed home loan.
- Harbor Custom Development has started accepting “digital currencies as payment” for land, houses, condos and apartments. Calling the move “a logical step,” the company said it accepts bitcoin and more than a dozen other cryptocurrencies.
More crime statistics
Afraid of breaking anti-discrimination laws, some real estate companies remove crime data from their listings.
Realtor.com, the official listing site of the politically powerful National Association of Realtors, did just that, as did Zillow-owned site Trulia. And Redfin, which has never released crime information, is leading the charge for others to drop the statistics as well.
All are concerned that the numbers not only promote racial bias, but are also unreliable.
“We know that one of the issues [buyers have] is whether they will feel safe in a particular home or neighborhood,” said Christian Taubman of Redfin. “But the available data does not allow us to accurately answer this question, and given the long history of redlining and racist housing conventions in the United States, there is too great a risk that this inaccuracy reinforces racial prejudice.”
Calling on others to follow Redfin’s lead, Taubman says crime data is flawed because many crimes go unreported. “The fact that most crimes are missing creates a real possibility that the crimes that appear in the dataset are biased in some way,” he said.
How much do you want?
In search of affordable housing, some people have found the answer to their quest in mobile homes. And the good news is that not only are they more affordable, but they tend to appreciate faster than site-built single-family homes.
There can be a stigma attached to houses built in a factory and towed to their eventual resting places. (Unlike manufactured homes, which are placed on a foundation and become permanent installations, mobile homes can be moved from location to location.) But according to LendingTree, the median value for a mobile home is 53,300 $, nearly $190,000 less than a site-built home. Better, the median value increased by 39% between 2014 and 2019, or 6 percentage points more than that of conventional houses over the same period.
But compare that to another sign of the housing apocalypse: A 120-year-old abandoned townhouse in San Francisco’s trendy Noe Valley neighborhood recently sold in a conservatorship sale for $600,000 above of the starting bid – even if the location has closed windows. , peeling paint, mismatched floors and not a single room.
Lew Sichelman has been covering real estate for over 50 years. He is a regular contributor to numerous shelter magazines and housing and housing finance industry publications. Readers can contact him at [email protected]