The Avalanche home loan tokenization protocol raises $10 million in Series A funding

“Homeowners effectively sell a portion of their home’s equity at today’s price and repay at tomorrow’s,” staff members wrote.

Homium, a home equity line of credit (HELOC) tokenization technology based on Avalanche, raised $10 million in a Series A investment led by Sorenson Impact Group and Blizzard. “Through shared appreciation home equity loans, Homium introduces a way for homeowners to borrow against their home equity without increasing their monthly debt burden,” stated Avalanche on April 15. 

Homium allows homeowners to pledge a portion of their home’s future appreciation as security for loans used for maintenance and repairs, debt consolidation, or inheritance. At the same time, investors receive a tokenized asset that tracks the price increase of a pool of shared dwellings on the system.

“Homium is building a valuable new asset class for institutional investors, providing a new source of uncorrelated, inflation-protected return in their core portfolios,” said Tommy Mercein, the company’s chief executive officer. The first house tokenization loans are now available in Colorado, the United States. Tokenized assets are secured by second mortgage loans provided to owner-occupied single-family houses. Investors in HELOC tokens are secured by the title, just like any other mortgage. 

Homium guarantees that each residence is “appraised by a third party, hybrid valuation service” with countrywide loan originators.  While the HELOC tokens use distributed ledger technology, they are not cryptocurrencies. Instead, the tokens are debt instruments that comply with US instruments and Exchange Commission (SEC) Rule 144A, which governs private placements to institutional investors. 

Homium’s patented system provides investors with real-time information on each loan in each pool, including origination value and current marked-to-market projected value. Because Homium loans are underwritten to a standardized standard that secures a percentage of the underlying home equity, the note can be securitized immediately upon its inception. Investors get pooled exposure to property price appreciation by state.” Since July 2023, Avalanche has committed $50 million in funding for on-chain tokenization protocols, with a particular emphasis on those focused on real estate and digital collectibles. Meanwhile, Citi, a financial services behemoth, has described the tokenization market as the next “killer use case” in cryptocurrency.

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