USDC homes, a new decentralized finance (DeFi) project, is now offering cryptocurrency mortgages to US homebuyers, allowing users to buy homes with crypto without first liquidating it.
The project is currently only available to Texas residents, but it intends to expand its offering to other states “soon.”
The project provides both unsecured and secured lending options, allowing users to secure crypto mortgages using bitcoin (BTC), Ethereum (ETH), USD coin (USDC) stablecoin, and other popular cryptoassets as collateral.
Homebuyers can borrow up to USD 5 million through USDC homes, with a 5.5 percent interest rate and a 20% down payment.
While all transactions are processed on-chain, borrowers can include off-chain data when applying, such as their credit score.
USDC homes are based on the Teller protocol, a DeFi project that enables blockchain asset lending and borrowing.
Teller’s founder and CEO, Ryan Barzun, argued that “USDC Homes empowers potential home buyers to leverage their digital asset holdings to access a mortgage, opening up the doors for crypto-natives that have historically been locked out of the traditional mortgage lending process.”
USDC homes have already made their first crypto loan to a Texas resident, who used the USD 500,000 loan to buy a USD 680,000 condo. The loan was unsecured and based on the borrower’s credit score.
Crypto mortgages provide a number of benefits to cryptocurrency users. For starters, they won’t have to liquidate their holdings, which saves them from potential losses due to taxation, fees, and a loss of position.
Furthermore, borrowers’ down payments are staked rather than sold, with the proceeds used to help homeowners pay off their loans.
“Borrowers can also earn interest on their down payment by putting their assets to work through staking or other yield-generating activities, and in turn utilize their passive crypto income to pay down the mortgage,” Teller said on Twitter.
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