Newfi Lending Expands Dscr Program To Accept Crypto Reserves

Newfi Lending, a national mortgage lender focused on non-QM originations, announced Tuesday that it’s expanding its debt-service-coverage ratio (DSCR) loan program to allow larger loan amounts, financing for rural properties and the use of qualifying cryptocurrency assets to meet reserve requirements without liquidation.

The updates are aimed at real estate investors who hold digital assets as part of their broader financial portfolios, according to a Newfi press release.

“This expansion reflects how Newfi is helping meet the needs of today’s real estate investors as they build and manage wealth,” said Steve Abreu, founder and CEO of Newfi Lending. “Many sophisticated borrowers hold digital assets as part of a diversified financial strategy. By recognizing crypto reserves in a responsible way, we’re giving brokers and investors more options.”

Under the expanded guidelines, borrowers may use up to 25% of the current value of Bitcoin and Ethereum held in a Coinbase account, and up to 50% of the value of cryptocurrency mutual funds or exchange-traded funds (ETFs) held with traditional financial providers such as Fidelity Investments or Charles Schwab.

Crypto-based funds are capped at a combined maximum of 50% of the total reserve requirement, and account statements must be dated within 60 days.

John Wise, executive vice president of national production at Newfi, said the changes are designed to preserve liquidity for well-capitalized borrowers.

“This guideline enhancement gives brokers a practical solution for borrowers who are well-capitalized but want to preserve liquidity and avoid triggering taxable events,” Wise said. “Our recognition of cryptocurrency in the lending process is just another way we continue to innovate and invest in the non-QM lending space.”

Newfi has previously incorporated cryptocurrency into its underwriting guidelines. This includes allowing borrowers to convert digital assets to U.S. dollars for use in a transaction, and by recognizing crypto-based mutual funds or ETFs offered by traditional financial institutions in certain asset utilization and depletion loan programs.

The move to incorporate crypto comes at a time when more lenders are becoming open to the idea of digital assets.

This sentiment has only accelerated following Federal Housing Finance Agency (FHFA) Director Bill Pulte’s announcement in June that Fannie Mae and Freddie Mac will begin preparing for the use of crypto in single-family mortgages.

Last week, Newrez announced that it plans to start recognizing cryptocurrency assets in the mortgage qualification process without requiring borrowers to liquidate their holdings.

Newrez and Newfi join other lenders operating in the crypto mortgage space, which include Milo, Ledn, Figure and Moon Mortgage.

The new updates apply to Newfi’s Sequoia DSCR program and are available to mortgage brokers through the company’s wholesale channel, as well as to investor clients through its direct channel.