Based on Avalanche, Homium is a home equity line of credit (HELOC) tokenization technology that has raised $10 million in a Series A funding round led by Blizzard and Sorenson Impact Group.
“Through shared appreciation home equity loans, Homium introduces a way for homeowners to borrow against their home equity without increasing their monthly debt burden,” wrote Avalanche in an April 15 announcement.
Homeowners that use Homium pledge a percentage of the future appreciation of their property as security for loans used for debt consolidation, upkeep and repairs, or inheritance.Simultaneously, investors obtain a tokenized asset that tracks the protocol’s pool of shared dwellings’ price appreciation.
“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 CEO
Tommy Mercein issued a declaration.Colorado, in the United States, is now offering the first house tokenization loans.
Second mortgage loans given to single-family owner-occupied residences serve as the collateral for the tokenized assets.Like with a regular mortgage, the HELOC token investors are tethered to the title.With national loan originators, Homium guarantees that each house is “appraised by a third party, hybrid valuation service.”The HELOC tokens are not cryptocurrencies even if they are based on distributed ledger technology.Rather, in accordance with US Securities and Exchange Commission (SEC) Rule 144A concerning private placement to institutional investors, the tokens are debt securities.Homium clarified its technology as follows.
“Patented technology gives Homium investors a real time window into every loan in each pool including its origination value and current marked-to-market estimated value. Because Homium loans are underwritten to a uniform standard that secures a % of the underlying home equity, this allows instant securitization of the note from inception. Investors receive pooled exposure to home price appreciation by state.”
Avalanche has committed to investing $50 million in on-chain tokenization methods since July 2023, primarily in real estate and digital collectibles.Meanwhile, tokenization has been dubbed the next “killer use case” in cryptocurrency by financial services behemoth Citi.