USDC.homes is a borrower and lender-focused marketplace that facilitates real estate lending collateralized by cryptocurrency. Homebuyers can borrow up to 100% LTV, capped at $5M, with average interest rates of 5-8%.
In addition, cryptocurrency can be used for the initial down payment, collateral and monthly installments. Lenders can provide capital to fund markets and earn interest on highly securitized loans.
While there have been significant strides made in implementing traditional financial services with DeFi and blockchain, unlocking the crypto-mortgage use case for consumers will be one of the next essential steps towards adoption in the Real Estates finance context.
What We Do:
We are partnered with real estate brokerages and mortgage lenders, who believe that mortgage underwriting should include cryptocurrencies and NFT’s as portfolio assets. The platform launched this April and the first mortgage was approved shortly after. To accomplish this goal, our focus is dedicated to both borrowers and lenders already active in DeFi.
The USDC.homes target borrower is a crypto-savvy professional who is looking to use their ETH, BTC, USDC, and other blue chip tokens and NFT’s to provide greater access to mortgages for those in the crypto community. Aside from the pioneering use case of activating cryptocurrencies to the homebuying process, additional user benefits include avoiding the taxation on crypto gains, staking the down payment and additional collateral to offset monthly payments with yield earnings, and interest rates as low as 5.5%.
Lenders (liquidity providers) can expect a highly secure, stable return. Our initial product will be a one year term note with all principal due at the end of the term. Initial borrowers will be required to escrow 100% of the purchase price in USDC during the loan term. Additional consideration may be made for ETH and BTC, if used inplace of USDC. Borrowers will be able to utilize the yield streams from their capital to apply toward their monthly installments.
The Beta Pool for USDC.homes has 36 borrowers where each of the borrowers is requesting a loan in the range of 500K - 1.5M. Based on the underwriter’s feedback on the user, the interest rate will vary between 5% - 8%. The current product is a 1 year, interest-only loan, where borrowers will have to repay the loan at the end of term, or refinance into another loan product.
The Portfolio Manager (PM) is Patrick Tighe, an attorney, licensed real estate broker, and real estate developer in Austin, TX. Over the past decade, Patrick has advised clients working on commercial and residential development. In addition, Patrick’s law firm, The Tighe Law Firm, actively innovates at the intersection of Real Estate Finance, Crypto Currencies, and Web3 Technologies.
The portfolio will have an initial life of one year and an initial maximum size of 5,000,000 USDC. Loans from TrueFi lenders will be drawn bi-weekly or monthly in amounts to be determined by the manager until the maximum pool size is reached and the pool is closed to new lenders. Each loan will feature a 1 term and coupon payment of 5-8%, payable monthly.
The mortgage process includes the following:
- Borrower selects home with broker - either us or your broker
- Put in offer, make contract assignable
- Proceed to underwriting
- Final approval
- Closing - lock up funds on chain; sign paperwork IRL, the borrower now owns their home
In the event of Default, Assets that are kept as collateral for the loan that have not been paid for would transfer to Lender.
- Lender becomes the owner of the crypto collateral with a lien on home equal to any difference in the value of the crypto and the property
- If the assets held are equal to the value of the home, the borrower retains full ownership of the property.
- Buyer can reinstate Loan by getting current on payments, fees and penalties in Default within 60 days of the initial default.
Loan flow process: USDC.Homes transaction structure