Using Bitcoin as down payment funds to purchase a new home with a mortgage...

[keithers]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?


Edit 2/19/2018:    With proper documentation (and sourcing), Bitcoin can now be used for down payment funds without having to sell the BTC and hold the USD in your bank account for 30-60 days.   

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[mindrust]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

[keithers]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

I am a mortgage bank, I have also been in the industry 15 years.  I don't think you are understanding how the bitcoin would be used.   The bitcoin would be sold via coinbase, and then those USD would be used for down payment.  Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."

We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.

[g27wr]

How is this any different than paying cash for a down payment?

[mindrust]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

I am a mortgage bank, I have also been in the industry 15 years.  I don't think you are understanding how the bitcoin would be used.   The bitcoin would be sold via coinbase, and then those USD would be used for down payment.  Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."

We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.

This is not a bitcoin issue then. It is a money laundering issue.   Coinbase/Tax guys are gonna question the customer to death and will make him mad with their questions. Bitcoin has a big reputation among cyber terrorists/drug dealers/tax evaders.

Whoever was trying to make a down payment for his mortgage via coianbase is going to hate to be alive and probably won't succeed.

Since you are talking about coinbase, i assume you live in USA right? If so, it will be just like i expected. Forget it.

[keithers]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

I am a mortgage bank, I have also been in the industry 15 years.  I don't think you are understanding how the bitcoin would be used.   The bitcoin would be sold via coinbase, and then those USD would be used for down payment.  Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."

We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.

This is not a bitcoin issue then. It is a money laundering issue.   Coinbase/Tax guys are gonna question the customer to death and will make him mad with their questions. Bitcoin has a big reputation among cyber terrorists/drug dealers/tax evaders.

Whoever was trying to make a down payment for his mortgage via coianbase is going to hate to be alive and probably won't succeed.

Since you are talking about coinbase, i assume you live in USA right? If so, it will be just like i expected. Forget it.

It's not money laundering when you are using your own coins/money.   Coinbase doesn't question why you are selling your bitcoin.  Down payment will come from their personal bank account.  Some of the funds in that bank account will come from Coinbase, the majority of the funds will have already been in the account.  

If you have purchased a home in the last 2-3 years and obtained financing, you would know what I'm talking about when it comes to sourcing down payment funds.  We are talking about the down payment, not monthly mortgage payments. 

[Nagadota]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

I am a mortgage bank, I have also been in the industry 15 years.  I don't think you are understanding how the bitcoin would be used.   The bitcoin would be sold via coinbase, and then those USD would be used for down payment.  Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."

We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.

This is not a bitcoin issue then. It is a money laundering issue.   Coinbase/Tax guys are gonna question the customer to death and will make him mad with their questions. Bitcoin has a big reputation among cyber terrorists/drug dealers/tax evaders.

Whoever was trying to make a down payment for his mortgage via coianbase is going to hate to be alive and probably won't succeed.

Since you are talking about coinbase, i assume you live in USA right? If so, it will be just like i expected. Forget it.

Your pessimism is unfounded.  Coinbase's situation with the IRS really has no relevance to down payments for mortgages.  I can see how people who can afford to buy a decent house might want to use Bitcoin for their mortgage and there's no real reason that it wouldn't work.

Will be following this thread.

[keithers]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

I am a mortgage bank, I have also been in the industry 15 years.  I don't think you are understanding how the bitcoin would be used.   The bitcoin would be sold via coinbase, and then those USD would be used for down payment.  Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."

We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.

This is not a bitcoin issue then. It is a money laundering issue.   Coinbase/Tax guys are gonna question the customer to death and will make him mad with their questions. Bitcoin has a big reputation among cyber terrorists/drug dealers/tax evaders.

Whoever was trying to make a down payment for his mortgage via coianbase is going to hate to be alive and probably won't succeed.

Since you are talking about coinbase, i assume you live in USA right? If so, it will be just like i expected. Forget it.

Your pessimism is unfounded.  Coinbase's situation with the IRS really has no relevance to down payments for mortgages.  I can see how people who can afford to buy a decent house might want to use Bitcoin for their mortgage and there's no real reason that it wouldn't work.

Will be following this thread.

Will keep it posted, as this progresses

[gentlemand]

Do any of you have experience with this, or would you like to hear how it works out?

I suggest you investigate Bitpay over Coinbase. They're possibly going to be less anal as they don't retail directly to the public, they just process, and they'll have lots of OTC buyers. They seem to moving towards B2B so they might be more receptive to larger sales.

[keithers]

Do any of you have experience with this, or would you like to hear how it works out?

I suggest you investigate Bitpay over Coinbase. They're possibly going to be less anal as they don't retail directly to the public, they just process, and they'll have lots of OTC buyers. They seem to moving towards B2B so they might be more receptive to larger sales.

Thanks.  our client already has funds in Coinbase...so moving it to Bitpay could muddy the waters just because the more transfers, the worse it looks to underwriting.   If it's as clean as showing the original bitcoin purchase in Coinbase, and then matching the deposit into their bank account with the sale of the same bitcoins from the same Coinbase account it paints a cleaner picture. 

[emezh10]

That was really a good strategy but we know that bitcoin doesnt get as a sure profit every month so you better have other source of income and not a full time trader or else but thats a good one if your having a good profit in bitcoin you can to that and i guess you can pay in time.

[GreenBits]

Do any of you have experience with this, or would you like to hear how it works out?

I suggest you investigate Bitpay over Coinbase. They're possibly going to be less anal as they don't retail directly to the public, they just process, and they'll have lots of OTC buyers. They seem to moving towards B2B so they might be more receptive to larger sales.

Thanks.  our client already has funds in Coinbase...so moving it to Bitpay could muddy the waters just because the more transfers, the worse it looks to underwriting.   If it's as clean as showing the original bitcoin purchase in Coinbase, and then matching the deposit into their bank account with the sale of the same bitcoins from the same Coinbase account it paints a cleaner picture. 

Coinbase should be able to produce proof/account records for this matter, I could be wrong but we would have at CEX, provided the requestor identified themself enough. The purchases should be tied to fiat account action, or if the coins are old and from off exchange,  coin age (balance info) on the account should demonstrate previous ownership.

Have to ask, where did this muddy up? It seems like the best way to buy big assets with Bitcoin is to convert to USD. This should have been straightforward if the source of the coins/income can be explained to the IRS, the coinbase account is verified enough (high account limit), and the bank accepts the wire (they are going to ask about it, since it's over 10k, but it's a legitimate asset sale). Seems like the IRS would be the bastard in this, interested in this.
Keep us posted

[keithers]

Do any of you have experience with this, or would you like to hear how it works out?

I suggest you investigate Bitpay over Coinbase. They're possibly going to be less anal as they don't retail directly to the public, they just process, and they'll have lots of OTC buyers. They seem to moving towards B2B so they might be more receptive to larger sales.

Thanks.  our client already has funds in Coinbase...so moving it to Bitpay could muddy the waters just because the more transfers, the worse it looks to underwriting.   If it's as clean as showing the original bitcoin purchase in Coinbase, and then matching the deposit into their bank account with the sale of the same bitcoins from the same Coinbase account it paints a cleaner picture. 

Coinbase should be able to produce proof/account records for this matter, I could be wrong but we would have at CEX, provided the requestor identified themself enough. The purchases should be tied to fiat account action, or if the coins are old and from off exchange,  coin age (balance info) on the account should demonstrate previous ownership.

Have to ask, where did this muddy up? It seems like the best way to buy big assets with Bitcoin is to convert to USD. This should have been straightforward if the source of the coins/income can be explained to the IRS, the coinbase account is verified enough (high account limit), and the bank accepts the wire (they are going to ask about it, since it's over 10k, but it's a legitimate asset sale). Seems like the IRS would be the bastard in this, interested in this.
Keep us posted

Basically this all started when I was asking client of mine to let me know where his down payment was coming from, because as a mortgage bank there are a lot of compliance and guidelines we have to follow to verify down payment funds. This is mainly due to the gov't and their anti-money laundering rules they want to hammer everyone with.

He told me that he had half already in the bank and wanted to sell crypto currency for the other half.   It was pretty cool because it's the first scenario I have tried to get through underwriting using bitcoin, and to my knowledge no other lender has successfully used bitcoin along side a new home loan as part of the funds.

My underwriter actually ran it by Fannie Mae, and so far it seems like it should work.   IRS would have no involvement, as claiming gains on tax returns is the responsibility of the bitcoin owner not the bank.  We don't communicate with the IRS, except to verify that the client does not owe an outstanding tax liability. We also just have to verify that the tax returns used to qualify for the loan match what was actually reported to the IRS as income.

[keithers]

Update: escrow is open and or loan is going in to processing tomorrow.  So far so good with everything. Using USD proceeds from the sale of BTC from coinbase for a portion of the down payment. It's probably about 10% savings and around 10% bitcoin proceeds to make up the 20% down payment.

[farharhadi]

If there is any difference in advances what is the difference

[biter66]

Using bitcoin to purchase a home does not sound too safe a thing to do to me. I would advise caution to anyone trying to do such a transaction.

[European Central Bank]

Using bitcoin to purchase a home does not sound too safe a thing to do to me. I would advise caution to anyone trying to do such a transaction.

http://www.pcadvisor.co.uk/how-to/security/how-avoid-solicitor-conveyancing-email-scam-that-costs-house-buyers-3653388/

you sure about that?

[DOGE12321]

Hey guys...I am in the mortgage banking industry.  I am currently working on a deal to incorporate bitcoin into the down payment funds for a new purchase home loan.

I haven't seen this done before.  Have any of you?   I have seen homes sell for 100% bitcoin, but that is the same as purchasing a home with cash.

We are in contact with Fannie Mae, and it looks like it can be done as long as the bitcoins are first converted into US dollars and then deposited into a US bank account.  If you know banking guidelines, then you know that most money has to be seasoned for 60 days before it can be used for down payment funds.  We may be able to get around this if you can clearly be able to source the ownership of the bitcoins and clearly document the sale of the bitcoins along with the deposit into your bank account (like with a coinbase transaction history).

Do any of you have experience with this, or would you like to hear how it works out?

You are talking about mortgages and you say you are in the mortgage banking business. You should know it better than us. It won't work. Because not a single bank in the world would accept a highly volatile asset as mortgage payments. We are talking about 10 to 30 years at least. If bitcoin becomes too valuable, the dude who owes money won't afford to buy them probably goes bust. If bitcoin loses value, bank gets fucked.

Nope. Won't work.

I am a mortgage bank, I have also been in the industry 15 years.  I don't think you are understanding how the bitcoin would be used.   The bitcoin would be sold via coinbase, and then those USD would be used for down payment.  Generally with down payment funds all non-payroll deposits into your bank account would have to be sourced, which is when the bitcoin deposit would be noticed and disqualified from "usable down payment funds."

We as the bank would not be holding bitcoin at all...we would be using proceeds from the sale of bitcoin.

Doesn't that just defeat the purpose of buying a house with Bitcoin? One would be basically buying the house and paying the mortgage using fiat.

[nathanghart]

So this a reality?
Without any issues then we can all do this.
Congratulations too bitcoin on becoming mature if this is in fact a reality as of now.

[MingLee]

Reading this thread it is actually pretty neat to see this progressing, I saw the OP in its infancy and I didn't think that it would really end up going anywhere, but hearing that the escrow will be happening soon is pretty neat.
Would you mind going into a bit more detail as to how the whole scheme is supposed to work? I get the part about it using Bitpay/Coinbase, but I'd like to see how the rest of the system is structured. Sounds interesting otherwise, good luck with the project. A 10% down payment is pretty significant if it all goes through Bitcoin.