So days back I did a little post on crypto mortgages and how they offered a bit a flexible atmosphere for home buyers, and now, the latest news carries that a new homeowner has bought an apartment in Austin, Texas, through a program that allows crypto holders to take out traditional uncollateralized mortgages based on their credit scores.
The 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 USD Coin (USDC) stablecoin over the Polygon (MATIC) network.
This new platform combines practices from traditional lending markets such as leveraging a borrower’s credit score to determine eligibility with new decentralized finance (DeFi) innovations such as cryptocurrency staking to help pay off the balance.source
Now the benefits of this are numerous, one of which includes "tax avoidance". Going full fiat may incur taxes on home purchases, but utilizing crypto helps invade it. Another benefit is that it empowers crypto earners, giving them the tools to be homeowners without having to exchange their crypto for fiat and go through all those processes.
The details as per this loan states that there's a down payment of 20% which isn't sold off, rather staked and can be used to help pay off this loan! I did my calculations and considered the figures above, on a 30 year term, that down payment would yield close to 68% of the loan amount, that's if pooled in a protocol yielding 8% a year!
This is really an empowerment because rather than waiting that long to be able to afford a home, this platform helps people spend just 20% of the amount to acquire a home, it's really a BIG deal, imagine if these networks chose to utilize HBD instead for the loans? That also leveraging the savings yields to cover loan amounts? At 20% Apr, the amount would be met even before this time, regardless if it drops as time goes on!
It's All About Scaling!
The interesting part of this isn't limited to the empowerment of home buyers, because this also creates room for investors to dive into real estate investments via "lending". Borrowers get a home, lenders get paid, this is how it goes and everyone benefits!
We're seeing lots of similar companies hitting the markets and it's just amazing how this will change the operations of the housing markets. Aside from taxes and empowering crypto earners, the underlying benefits of these protocols is its ability to meet a wider public!
With these platforms, people worldwide are gaining access to investment tools, while others are gaining access to properties. The distribution curve of crypto products is often wide, giving the community, it makes it more accessible from anywhere around the world!
It would be awesome to see more of these services gain exposure and meet the demands worldwide, this space is really about to explode as businesses change models and embrace crypto as a means of operation. Big things are coming and all this will shape the world economy, bring in a new system of government and finance management…