Use crypto to pay for your house? Now you can.
USDC.homes has made it possible to pay off your home by taking a crypto mortgage loan.
It seems far-fetched when someone tells you that you can start paying for your house in crypto, especially when regulations for crypto are still very uncertain. However, this became a reality for a resident in Austin, Texas.
USDC.homes crypto mortgages platform issued its first crypto loan to an Austin resident who bought a $680,000 condo with a $500,000 loan issued in USDC stablecoin over the Polygon network.
The platform incorporated both traditional finance's way of reviewing the borrower's credit score to determine their loan eligibility, and new decentralized finance (DeFi) innovations such as staking to help pay off the loan. Loans are issued in USD, but borrowers can pay them back in ETH, BTC or USDC. The platform was built using the Teller lending protocol, backed by the TrueFi project that issues uncollateralized crypto loans
What is Teller Protocol?
Teller is a decentralized protocol that enables you to take up a risk-assessed loan, without the need for a collateral. Users can participate as liquidity providers by depositing assets, and borrowers by connecting their bank accounts or staking their Fortune Teller NFTs.
What does USDC.homes offer?
USDC.homes can issue 30-year mortgages as large as $5 million at a 5.5% interest rate which require a 20% down payment. More interestingly, the borrower's down payment is staked and accrues interest over time that can be used to pay off their loans, something you will not see with traditional finance. As stated below, USDC.homes believes that crypto is wealth and they should be valued no differently than fiat currency.
Who is this for?
If you have most of your funds in crypto, and you are earning a living with crypto (receiving payments in crypto)
You do not wish to liquidate large sums of your crypto into fiat, but still want to purchase a home
You live outside of the US and wish to own a house or invest in a property that can be financed with crypto
If you do not fulfill the credit requirement from the traditional mortgage programs
Implementation & Regulation
This concept is extremely innovative and game-changing, however it also begs the question, “Will regulators allow such financial instruments to exist?” Given that Texas has given a green light, it does seem like subsequent states or even countries will follow suit. However, I personally think that these decentralized finance solutions affect the bottomline of big banks, which are not allowed as far as regulators are concerned.
However, with that being said, every country has their own way of regulating crypto. There is no way to tell if there ever will be a day where we see a fundamental shift from traditional mortgages to crypto mortgages. For someone living in Singapore, I believe that such solutions will not be able to thrive well here due to regulations, but I sincerely hope that my belief can be refuted.
What do you think your country / state will do?
Looking to invest in cryptocurrencies? Here are some exchanges I personally use! Feel free to use my referral links for additional perks :)
Click here and get discounts for your trading fees!
Click here and get $25USD!
Click here and get 10% off your trading fees!
Click here to earn stars and unlock different prizes!
If you read till here, you’re an absolute OG. Don’t forget to follow my twitter here and subscribe to this newsletter for more related blockchain nuggets.