Homium, a protocol specializing in the tokenization of home equity lines of credit (HELOC) on the Avalanche blockchain, has secured $10 million in a Series A funding round. The round was led by Sorenson Impact Group and Blizzard.

Avalanche announced on April 15 that Homium offers homeowners a novel form of borrowing through shared appreciation home equity loans. This method allows homeowners to leverage their home equity without adding to their monthly debt obligations.

Homeowners using Homium agree to allocate a portion of their home's future value increase as security for loans, which can be used for purposes like property maintenance, debt consolidation, or managing inheritance issues. In return, investors gain access to a tokenized asset that reflects the value appreciation of a collection of homes participating in the program.

Homium is aimed at creating a unique asset class for institutional investors, offering a fresh source of returns that are protected against inflation and uncorrelated to traditional market movements, as noted by Homium CEO Tommy Mercein. These innovative home tokenization loans are now available in Colorado.

The assets behind these tokens are secured by second mortgages on owner-occupied single-family homes. Investors in these HELOC tokens have security interests anchored to property titles, similar to traditional mortgages. Homium ensures reliability with each property being independently appraised by a third-party, hybrid valuation service, supported by national loan originators.

Although these HELOC tokens utilize blockchain technology, they are distinct from cryptocurrencies. They are structured as debt securities and adhere to the U.S. Securities and Exchange Commission’s (SEC) Rule 144A, which governs private placements for institutional investors. Homium leverages patented technology to provide investors with real-time insights into every loan within each pool, including original and current estimated values. The standardized underwriting across these loans facilitates instant securitization, offering investors pooled exposure to regional home price appreciations.

Since July 2023, Avalanche has committed $50 million to support on-chain tokenization initiatives, with a significant emphasis on real estate and digital collectibles. Meanwhile, Citi, a global financial services leader, has recently highlighted the tokenization market as the forthcoming breakthrough application in the cryptocurrency domain.