A new owner has purchased an apartment in Austin, Texas through a program that allows cryptocurrency holders to obtain traditional unsecured mortgages based on their credit score..
The crypto mortgage platform USDC.homes issued its first crypto loan to an Austin resident who purchased a $680,000 condo with a $500,000 loan issued in stablecoin USD Coin (USDC) through the Polygon network..
This new platform combines the practices of traditional lending markets, such as leveraging a borrower’s credit score to determine eligibility, with new innovations in decentralized finance (DeFi).such as cryptocurrency staking to help pay off the balance.
Today, we’re excited to debut https://t.co/26BgeWPd0Z and announce the arrival of crypto mortgages to Texas!
Read morehttps://t.co/I3wcbfZXRY
— Teller (@useteller) April 26, 2022
Today we are pleased to launch https://t.co/26BgeWPd0Z and announce the arrival of crypto mortgages in Texas.
Read morehttps://t.co/I3wcbfZXRY
Platform loans are issued in USD, but borrowers can make payments in Ether (ETH), Bitcoin (BTC), or USDC. It has been built using the Teller lending protocol and backed by the TrueFi project which issues unsecured crypto loans. USDC.homes can issue 30-year mortgages up to $5 million at an interest rate of 5.5% requiring a 20% down payment.
Each borrower’s down payment is staked, not sold, and accumulates interest over time that can be used to help homeowners pay off their loans. According to a Wednesday blog post by Teller, the traditional need to liquidate one’s crypto assets for fiat to secure a loan exposes U.S. borrowers “to damage from taxes, fees, and loss of position.”
Issuing loans in the real world is becoming a more common use case in the cryptocurrency industry. The LoanSnap platform hopes to open its services to licensed mortgage brokers this year, according to a Tuesday report from Housing Wire.
Using an artificial intelligence (AI) loan origination system, CEO Karl Jacob told Housing Wire that LoanSnap has issued “billions of dollars” in traditional mortgages.. His company’s services have also extended into the cryptocurrency space by working with DeFi lender Bacon Protocol to peg mortgage securities to a non-fungible token (NFT).
Bacon Protocol has been issuing NFT mortgages since last November, with loan rates ranging as high as 3.1%.much less than the 5.55% rate on a traditional 30-year mortgage, according to Investopedia.
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