Using Cryptocurrency To Buy A Home
Crypto can pay for your closing and count toward reserves. It cannot do either while it is still crypto. Converting it is the easy part. Documenting where it came from is the work.
Crypto Is Not Funds Until It Is Dollars
And it is not usable until the trail is documented
- Cryptocurrency must be exchanged into U.S. dollars before it can be used
- The dollars must be held at a United States or state regulated financial institution
- Documentation from the exchange must verify you as the legal owner of the account
- A nickname or handle on the exchange account does not establish ownership
- A prior bank statement showing funds moving into that same exchange account satisfies the source requirement
- A 1099-B or 1099-MISC from that same exchange, with tax returns reflecting the gain or loss, also satisfies it
Before any of it can be used, it has to be converted into U.S. dollars
It Has To Be Converted First
It Has To Land Somewhere Regulated
The Account Has To Be Yours On Paper
The Deposit Has To Be Traced
Reserves Are Held To The Same Standard
What The File Has To Show
Two things: that the exchange account is yours, and that the money came out of it.
Cryptocurrency and other virtual currency can be used as funds for closing and as reserves, but only once it has been exchanged into U.S. dollars and the dollars are held at a financial institution regulated by the United States or by a state. Crypto sitting in a wallet or on an unregulated platform does not count, regardless of what it is worth.
Two things decide whether crypto proceeds can be used on your loan. The first is form, because the asset has to be dollars sitting at a regulated institution rather than a balance on an exchange. The second is provenance, because a large deposit with no history behind it is a problem no matter where it came from. Both are solvable, and both are far easier to solve before you are under contract than after.
Beyond conversion, the file has to establish where the money came from. That means documentation from the exchange verifying you as the legal owner of the account rather than a nickname on it, paired with either a prior bank statement showing funds moving into that same exchange account, or a 1099-B or 1099-MISC from that exchange together with the tax returns reflecting the gain or loss.
Where This Trips People Up
Six things worth sorting out before you are under contract.
You Converted Early
Selling and moving the proceeds well before you write an offer gives the funds time to sit in your bank account and keeps the paperwork straightforward.
The Account Shows A Handle
Exchange accounts often display a username rather than a legal name. The documentation has to verify you as the legal owner, so a screenshot of a handle will not carry it.
You Have The Bank Side
A prior bank statement showing money moving into the same exchange account the deposit came from closes the loop on where the funds originated.
You Have The Tax Side
A 1099-B or 1099-MISC from that same exchange, paired with the tax returns reflecting the gain or loss, does the same job from the other direction.
It Is Still In A Wallet
Funds held in crypto, in self-custody, or at a platform that is not a United States or state regulated institution cannot be counted. Conversion has to come first.
You Need It For Reserves
The same rules apply. Reserves are held to the same standard as funds for closing, so the conversion and the documentation are required either way.
Hear From Homeowners Like You
Frequently Asked Questions
The questions that come up when part of the money started out as crypto.
You can use the proceeds, yes. Cryptocurrency and other virtual currency are acceptable as funds for closing and as reserves once they have been exchanged into U.S. dollars and the dollars are held at a regulated institution. The asset itself is never what closes the loan.
Yes. The conversion into U.S. dollars is not optional and there is no version of this where crypto is transferred at the closing table. Sell, move the dollars into your bank, and the documentation follows from there.
At a financial institution regulated by the United States or by a state. That is the standard. Dollars parked on an exchange, in a payments app, or at an offshore platform do not meet it, so the transfer into a normal bank account is part of the process.
Documentation from the exchange verifying you as the legal owner of the account. Underwriting is looking for your legal name tied to the account, which is a different thing from the account being logged in on your phone.
It can be, if that is all you provide. A handle does not establish legal ownership. The exchange can usually produce account documentation in your legal name, and that is what the file needs alongside the record of the funds moving.
Yes, and the requirements do not soften. Reserves are held to the same standard as funds for closing, so the same conversion and the same source documentation apply.
As early as you comfortably can. There is no set waiting period, but every week the dollars sit in your bank account is a week of ordinary statements rather than a large deposit that has to be explained. Converting before you start shopping is the least painful version of this.
Find out what you qualify for
Whether you have already converted or you are working out the order of operations, it is worth knowing what documentation your file will need. Start a pre-qualification today.
Get Pre-Qualified*Loan amounts, rates, terms, and down payment requirements are subject to credit approval, income and asset verification, and program eligibility. Use of cryptocurrency or other virtual currency as funds for closing or as reserves is subject to agency, FHA and VA guidelines, including conversion into U.S. dollars, deposit at a United States or state regulated financial institution, verification of legal ownership of the exchange account, and documentation of the source of funds. Eligibility depends on the program and on the file. This is not a commitment to lend. All loans are subject to credit approval, underwriting, and property qualification. Saxton Mortgage, LLC, NMLS #1717191. Equal Housing Lender.