New homeowners have purchased an apartment in Austin, Texas through a program that allows crypto holders to obtain traditional unsecured mortgages based on their credit score.
The USDC.homes Crypto Mortgage Platform issues the first crypto loan to Austin residents who have purchased a $ 680,000 condo with a $ 500,000 loan issued in USD Coin (USDC) Stablecoin via the Polygon (MATIC) network. bottom.
The new platform rebalances traditional lending market practices, such as leveraging borrower credit scores to determine eligibility, with new decentralized finance (DeFi) innovations, such as cryptocurrency staking. ..
Today, we are excited to debut https: //t.co/26BgeWPd0Z and announce the arrival of crypto mortgages in Texas! <1/6>
Read more https://t.co/I3wcbfZXRY
— Teller (@useteller) April 26, 2022
Loans from the platform are issued in US dollars, but borrowers can pay in Ethereum (ETH), Bitcoin (BTC), or US dollars. It is built using the Teller Lending Protocol and is underpinned by the TrueFi project, which issues unsecured crypto loans. USDC.homes can issue $ 5 million in 30-year mortgages at a 5.5% interest rate with a 20% down payment.
Each borrower’s down payment is bet without being sold and interest accrues over time that can be used to help the homeowner pay off the loan. According to a blog post from Teller on April 27, the traditional need to liquidate one’s crypto assets for fiat to secure a loan is “taxation, fees, and loss of status” for American borrowers. We are exposed to “compensation for damages”.
Actual loan issuance is becoming a more common use case in the crypto industry. According to a report from Mortgages on April 26, the LoanSnap platform will serve licensed mortgage brokers this year.
By using an artificial intelligence (AI) loan composition system, CEO Karl Jacob told HousingWire that LoanSnap issued “billions of dollars” in traditional mortgages. His company’s services have also been extended to crypto space by linking the value of mortgages to non-fungible tokens (NFTs) in collaboration with DeFi lender Bacon Protocol.
Related: Decentralized Credit Score: How can blockchain technology change the rating?
The Bacon Protocol has been issuing NFT mortgages since November last year, with a loan rate of 3.1%, well below the 5.55% of traditional 30-year mortgages, according to Investopedia.
