Bitcoin for Mortgages? Believe it...
A California charity hopes to harness the Bitcoin revolution and change the housing market in El Salvador
Josh Young has an infectious enthusiasm.
That’s the first thing that stood out to me as we chatted recently about New Story Charity, the California charity where he works as chief of staff.
Josh is motivated, exhilarated, and ready to change the world. Right now, that means working with the rest of the New Story staff to bring affordable home ownership to families in El Salvador.
“The timing was just perfect to explore what is possible,” he said during our recent conversation.
Back in 2014, an intrepid group came together to found New Story, which works to provide homes to people in Latin America who lack shelter. Most notably, the company pioneered 3-D printed homes in Mexico.
“Typically, innovation doesn’t reach those in need, if at all,” Josh told me about the philosophy of New Story. “That’s kind of our ethos. We are determined to bring all this tech to these people in need.”
And right now, that tech includes Bitcoin. It’s a departure for New Story, but Josh says the pivot to cryptocurrency and blockchain technology makes sense. Several of the staffers at New Story are devoted Bitcoiners.
Josh says Bitcoin can provide a roadmap to home ownership for many of the people New Story works with on a regular basis.
In El Salvador, as with much of Latin America, over 80% of families are unbanked. That means millions of people without reliable access to checking accounts, savings accounts, or ATMs. It also means the path to home or land ownership is basically opaque—a world of pen and paper transactions, 100% interest rates, scams, and hurdles.
New Story Charity hopes to change that reality by harnessing the power of Bitcoin, the lightening network, and the public ledger of the blockchain. Josh and the rest of the team hope this will create a digital solution to a generational problem.
“We’re not not using Bitcoin as collateral. We’re not forcing families to hold Bitcoin,” Josh told me about the program. “It’s denominated in USD, so the solution is the lightening payments. By doing it that way, we are able to move a lot faster. If we wanted to come up with a literal holding in sats (satoshis, or the fractions of a Bitcoin), or have it denominated in sats, we’d need to take a much longer period of time.”
Josh says the New Story Charity mortgages are halfway funded by charitable donations, and halfway by Bitcoin. Families who receive the mortgages will use the lightening network to make payments over five years. All payments will be denominated in US dollars.
“Right now, it’s simply cutting out the pen and paper transactions and making it one hundred percent transparent for families to be able to see where their money is going,” he added.
New Story started fundraising for these mortgages in August 2021 after the team spent the summer working out a plan of action. The group hopes to back two hundred homes in El Salvador over the next few years. Eight are almost finished as of this post, and were funded by Coinbase. Josh says unlike previous efforts, the residences will not be 3-D printed, but will instead use local materials and local labor. Homes will cost between $4,000 and $5,000. Interest rates will be less than 12%, and the mortgages will cost each family less than 25% of their annual income.
“It kind of all worked together, and we were able to make something happen really quickly,” Josh of the fast-moving efforts.
The team estimates the 200 homes will cost $2 million, and about $600,000 has been raised so far. Click here to donate or find out more about New Story Charity.
The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.