Uncollateralized DeFi mortgage taken out on Austin condo via Teller

cointelegraph.com:

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.

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Loans from the platform 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 that issues uncollateralized crypto loans. USDC.homes can issue 30-year mortgages as large as $5 million at a 5.5% interest rate which require a 20% down payment.

Each borrower’s down payment is staked, not sold, and accrues interest over time that can be used to help homeowners pay off their loan. According to an April 27 blog post from Teller, the traditional need to liquidate one’s crypto assets for fiat to secure a loan exposes American borrowers “to the damages of taxation, fees, and a loss of position.”

Real-world loan issuing is becoming a more common use case in the crypto industry. The LoanSnap platform expects to open its services to licensed mortgage brokers this year, according to an April 26 report from Housing Wire.

By using an artificial