If you’ve invested in a cryptocurrency such as Dogecoin, you might be wondering what you can do with it — and if it can help you buy your dream home.
The answer is yes…and no.
You could buy a home using Dogecoin if you find a seller who is willing to be paid in Dogecoin. And crypto home purchases have been cropping up around the world, including in Colombia, Chile, Venezuela, and Portugal. One Salt Lake City seller even listed his home at a 10% discount for anyone who could pay in Dogecoin.
But those stories are still the exception. The idea of paying for a house in Dogecoin is largely a novelty at this point, and most people in the U.S. need to take out a mortgage to buy their homes. And most mortgage lenders do not accept Dogecoin, or other cryptocurrencies, for down payments, closing costs, or monthly payments.
What they do accept is cash from the sale of Dogecoin and other crypto – and that’s what we’re going to talk about here.
What's in this Article?
Dogecoin is a type of cryptocurrency. Like other cryptocurrencies, it is created on the blockchain, an open electronic ledger that records transactions. By using their computers to support the blockchain and process transactions, “miners” earn Dogecoins.
You can also get Dogecoins by buying them on a cryptocurrency exchange such as Coinbase or through an investing app such as Robinhood.
Like other cryptocurrencies, Dogecoin is stored in a crypto wallet. Crypto wallets can be online, in a mobile app, stored on a physical drive, or even printed on a piece of paper. Vendors and stores that accept payment in cryptocurrency would scan the code created by your wallet to debit the correct amount from it.
Although cryptocurrency is an increasingly popular asset, most mortgage lenders don’t accept it as down payment or closing cost funds.
Cryptocurrency is not classified as currency by the IRS. Instead, it is treated as property, much like fine art or a comic book collection. No matter how valuable those things are, you need to sell them for lenders to see their value. So your best option is to convert your cryptocurrency to U.S. dollars before you begin the process of applying for a mortgage.
Then you can use the cash you receive from the sale toward your home purchase.
Here’s what you need to know about using Dogecoin to buy a house.
1. You need to plan ahead
If you plan to sell Dogecoin to buy a house, there are a couple of timeline considerations to make:
The first is that you must have owned the Dogecoin for at least 60 days prior to selling it.
The second is that the funds must be in your account in time for your closing. You can’t wait until the last minute to sell, since the sale needs to be recorded on whatever exchange you use, and the cash transferred to your bank account in time for you to wire it to your settlement agent.
2. Crypto must be converted to USD ahead of your closing date
Your mortgage lender will require that your closing funds be in USD, so make sure you can transfer the sale proceeds to a U.S. bank account.
3. Lenders will need records of the sale, so keep a paper trail
If you sell your Dogecoin within 60 days before your closing, your lender will need a record of the sale. Federal regulations require them to source all large deposits in your bank account within 60 days of your closing. Your lender may ask for proof of the sale from your exchange or crypto wallet, as well as documentation of the cash hitting your bank account.
There is a way around the paperwork, though. If you sell your Dogecoin more than 60 days prior to closing, and the large deposit doesn’t appear on any bank statements you give the lender, the funds will be considered “seasoned.” You will not have to provide documentation of the sale.
4. Be strategic about when you sell
It can be difficult to decide when exactly to sell your crypto. Your instinct might be to hold it as long as possible to get the maximum value. But if the value drops suddenly, you may not make as much in the sale as you expected. You could end up short on your funds needed to close.
It’s up to you when you decide to sell, and you may want to consult a financial advisor about the best strategy. But if you don’t make enough in the sale to cover your costs to close, you will need to make up the difference from your savings or other assets.
Each cryptocurrency has its benefits and drawbacks. But for the benefits of buying a house, they’re all functionally the same.
Dogecoin is widely known, especially after Elon Musk talked it up in the summer of 2021. It is easier to mine than Bitcoin and has low transaction costs, but its value per coin is not as high as the other Bitcoin and Ethereum.
Bitcoin is the oldest and most widely known cryptocurrency. But it is expensive to mine or to purchase, making it less useful for direct transactions. This might be the biggest portion of a cryptocurrency holding, especially for someone who has been involved in cryptocurrency since the early days.
Ethereum is the second most widely known cryptocurrency, so it is widely accepted for transactions and considered highly liquid. It can be more challenging than Bitcoin to mine because its ledger uses its own programming language.
Ultimately, if you plan to use any of these cryptocurrencies to buy a house with a mortgage, you will need to sell them first and use the cash toward the home. One might argue that the coin with the highest value is most advantageous for buying a property.
But functionally, they will all require the same process of converting them to cash and documenting the sale in order for the funds to be used toward a house.
Can you buy a house with Dogecoin? FAQs
If you are buying outright and your seller accepts Dogecoin, you can buy a house with Dogecoin or another cryptocurrency. However, if you are getting a loan to buy a home, you will need to convert Dogecoin into U.S. dollars to use for your down payment, closing costs, or mortgage payments.
If you are buying directly from the seller and the seller will take cryptocurrency payments, then you can use crypto to buy real estate. U.S. lenders do not currently accept payments in cryptocurrency, so you will need to convert your crypto USD before you can use it toward your down payment or closing costs.
Yes. There are two ways to do this.
First, you can use a third-party brokerage, such as Binance, Coinbase, or Kraken, to convert your coins to cash. These brokerages charge a fee for the conversion, which varies by brokerage and by transaction size.
Or you can sell your coins on a peer-to-peer network, receiving payment in cash. Local Bitcoins and Bybit are two peer-to-peer networks, although some brokers also allow peer-to-peer sales. Peer-to-peer sales may have lower fees, but they can take longer.
No matter which conversion method you choose, it will take at least a few days to receive the funds in your bank account, so allow time for this part of the process.
Although using cryptocurrency can be a little more complicated than using cash to buy a home, this valuable asset is making homeownership possible for many people. The key is to work with a lender that will guide you through the process of documenting your crypto sale and using the cash to buy your home.
- You can only use Dogecoin directly to buy a house if your seller accepts it
- If you plan to take out a mortgage, you’ll need to convert your Dogecoin to U.S. dollars for your down payment
- Be strategic in when you sell your Dogecoin, as it will affect the documentation requirements for your loan
The information in this article does not constitute financial planning advice. Please consult a financial planner regarding your specific situation.