Last week, a UMortgage originator took to LinkedIn to announce a unique loan he was working on — a $4 million non-QM loan for a borrower using cryptocurrency through an off-exchange XRP wallet to qualify. Industry observers say the deal highlights both the potential and the challenges of bringing digital assets into housing finance. The development comes after Federal Housing Finance Agency Director Bill Pulte issued a directive to Fannie Mae and Freddie Mac in June to begin preparing for the use of crypto in single-family mortgages. Tyler Hodgson, UMortgage’s executive vice president of growth and the man behind the deal, told HousingWire that this was the first crypto asset depletion loan he’s done. He arranged the loan through LendSure Mortgage after multiple lenders declined to consider the borrower’s crypto assets. The borrower lacked traditional income documentation but held significant cryptocurrency reserves. “We did an upfront preapproval on this loan. This guy is buying an $8 million house, so typically, they would go up to like 70% or 75% LTV on this product. But we hit the max loan amount, where they capped us out at $4 million. [We] got him approved using that cryptocurrency as an income source,” Hodgson said. “Obviously, he’s liquidating some of the cryptocurrency for the down payment,” he added.