Lending
Use your property token as collateral to access liquidity without selling.
Fabrica property tokens can be used as collateral for loans, allowing owners to access liquidity without selling their property. This unlocks capital for landowners who would otherwise face significant barriers when seeking traditional bank financing.
How It Works
When you take a loan against your property token:
- Collateralization: Your property token is locked in a lending protocol's smart contract
- Funds Received: You receive loan funds (typically in stablecoins)
- Ownership Retained: You remain the beneficial owner of the property during the loan
- Repayment: Upon repayment, your token is returned
- Default: If you fail to repay, the lender can claim the property token
While your token is held as collateral, you retain full rights to use and access the property. The lending protocol holds the token as security, but you remain the owner in every practical sense.
Lending Options
Fabrica integrates with two lending protocols, each suited to different needs:
| Protocol | Model | Best For |
|---|---|---|
| NFTfi | Peer-to-peer | Borrowers seeking customized terms; lenders who want to evaluate specific properties |
| MetaStreet | Pool-based | Borrowers who need instant liquidity; lenders who want passive, diversified exposure |
For Borrowers
Benefits:
- Access capital without selling your property
- No traditional credit checks or bank approvals
- Funds available in minutes, not weeks
- Retain property rights during the loan
Considerations:
- Interest rates vary by protocol and property value
- Failure to repay results in loss of the property token
- Property taxes and obligations remain your responsibility during the loan
For Lenders
Benefits:
- Earn returns backed by real land
- Transparent collateral with verifiable ownership
- Legal protections under UCC Article 8 and Article 12
- Onchain transparency and settlement
Considerations:
- Property values can fluctuate
- Default may require managing or selling a property
- Due diligence on individual properties is recommended for peer-to-peer lending
Security
Fabrica's trust structure provides lenders with strong security:
- UCC Compliance: The trust agreement includes provisions under UCC Article 8 and Article 12, allowing lenders to perfect their security interest without additional filing
- Reliable Collateral: Upon default, the property token transfers to the lender or is auctioned to repay the loan
- Transparent Ownership: Ownership is verifiable both onchain and at the county recorder
See Lender Protections for details on the legal framework protecting lenders.
Updated 1 day ago