USDC.homes, a new decentralized finance (DeFi) project, is offering US homebuyers DeFi mortgages, allowing users to mortgage crypto to buy a home.
The project currently allows Texas residents to secure crypto mortgages and is planning to expand the service offering to other states in the near future.
The project offers both unsecured and secured lending options, allowing users to secure crypto mortgages using Bitcoin (BTC), Ethereum (ETH), USD coin (USDC) and other popular coins as collateral.
Homebuyers can borrow up to $5M through USDC.homes, with 5.5% interest and 20% down payment.
While all transactions are processed on-chain, borrowers can include off-chain data like their credit score when signing up.
USDC.homes is built on the Teller protocol, a DeFi project designed to enable lending and borrowing of blockchain assets.
Ryan Berkun, founder and CEO of Teller, argues that:
“USDC.HOMES EMPOWERS INTENDED HOME BUYERS TO LEAVE THEIR HOLDING OF DIGITAL ASSETS TO ACCESS A mortgage, OPENING A WAY TO USE CRYPTO CURRENCY TO FIND AN ANNOUNCEMENT. FROM TRADITIONAL mortgage Lending Process.”
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USDC.homes has issued its first loan to a Texas resident who used a $500K loan to purchase a $680K condo. The loan is unsecured and is granted based on the borrower’s credit score.
Using crypto collateral offers several advantages for crypto investors. In the first place, they won’t have to liquidate their holdings to avoid tax, fee and position losses.
Furthermore, the borrower’s prepayments are not sold, instead they are staking, and the proceeds can be used to help homeowners pay their loans.
“BORDERS CAN ALSO MAKE PROFIT FROM THEIR PAYMENTS BY PERSONALIZING THEIR ASSETS THROUGH STAKING OR OTHER PROFIT GENERATING ACTIVITIES AND CHARGES, CHARGES, CHARGES, THEY HAVE PAYED THE mortgage,” TELLER said on Twitter.