Unsecured DeFi mortgage borrowed through Teller on an Austin condo

A new homeowner has bought an apartment in Austin, Texas through a program that allows crypto holders to take out traditional unsecured mortgages based on their credit history.

Crypto mortgage platform made its first crypto loan to an Austin resident who bought a $680,000 condo with a $500,000 loan in USD Coin (USDC) stablecoin through the Polygon (MATIC) network bought.

This new platform combines practices from traditional credit markets, such as B. using a borrower’s creditworthiness to determine eligibility, with new innovations in decentralized finance (DeFi) such as

Loans from the platform are issued in USD, but borrowers can make payments in Ether (ETH), Bitcoin (BTC) or USDC. It was built using the Teller Lending protocol and backed by the TrueFi project, which issues unsecured crypto loans. can issue up to $5 million in 30-year mortgages at 5.5% interest that require a 20% down payment.

The first mortgage issued by on the Polygon network.

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 by Teller, the traditional need to liquidate one’s crypto assets for fiat to secure a loan exposes American borrowers “to the harm of taxes, fees and a loss of position.”

Real world lending is becoming an increasingly common use case in the crypto industry. According to an April 26 report by Housing Wire, the LoanSnap platform expects to open its services to licensed mortgage brokers this year.

By using an artificial intelligence (AI) lending system, CEO Karl Jacob told Housing Wire that LoanSnap has spent “billions of dollars” in traditional mortgages. His company’s services have also expanded into the crypto space, working with DeFi lender Bacon Protocol to link mortgage assets to a non-fungible token (NFT).

Related: Decentralized Credit Scores: How Can Blockchain Technology Change Ratings?

Bacon Protocol has been lending NFT mortgages since last November with interest rates up to 3.1%, far below the 5.55% for a traditional 30-year mortgage, according to Investopedia.