Moon platform launches crypto-backed mortgage product

Minimum loan amount is $1M and investors should plan to post 100% collateral in crypto

Add Moon Mortgage to the list of fintechs offering crypto-backed mortgages.

Six months after raising $3.5 million in a seed round, the Miami-based cryptocurrency lending platform announced on Tuesday that it launched a product that allows investors in Bitcoin, Ethereum and USDC to use their assets to secure funding for real estate purchases. 

“The use case for crypto has to go beyond investment potential. It has to be about how an investor can use it for real-world gains,” Tristan Marino, who co-founded the company with Aaron Nevin in 2022 after their frustration with the lack of digital asset applications, said in a statement. 

Since 2021, other fintechs have launched crypto mortgage products, including Toronto-based Ledn and Miami-based Milo. Figure, led by former SoFi chief executive Mike Cagney, has placed big bets on crypto-backed mortgages and launched the company’s first crypto-based product earlier in 2022. 

Moon’s crypto mortgage product has a minimum loan amount of $1 million. The company said on its website that “for now, as a good rule of thumb, [investors should] plan to post 100% collateral. Future products may feature different collateral requirements.” 

Because Moon is not a bank, crypto assets are stored with Anchorage Digital, a crypto custodial firm that is also the first federally chartered crypto bank in the U.S. In light of the current bank crisis, Moon also clarifies on its website that crypto assets are not FDIC-insured products, meaning they may lose value.

Moon Mortgage does not liquidate the investors’ collateral when crypto loses value unless it drops to a pre-agreed value during the underwriting process. Clients maintain ownership of the crypto stored and total exposure to the markets, which allows them to capture appreciation of the asset.

The company said they can originate a loan in six steps, with a close time of as little as 14 days. The product is available for homebuyers in Florida, Texas and Colorado and will be open to investors in most states for investment properties. According to a Moon Mortgage representative, the term length and rate will vary depending on the size of the loan and collateral posted.

Moon also launched a product that allows investors to take out loans against their digital assets while still maintaining some control of these assets. Dubbed “Trade & Borrow,” the product is available with one-, three- and six-month terms but can be renewed. There are no prepayment penalties and origination fees, the company 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,” Nevin, co-founder and CEO of Moon Mortgage, said in a statement.

The global cryptocurrency market capitalization was at $1.2 trillion on Tuesday afternoon, down compared to $2.2 trillion the same day last year, according to the price-tracking website for cryptoassets CoinMarketCap.

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