Prospective borrowers must possess a minimum of 50% equity in their homes, establishing a robust foundation of personal investment in the property. This requirement ensures a strong protective equity cushion, reflecting a responsible borrowing ethos and supporting the stability of the collateralized asset.

Loan amounts are capped at less than 50% LTV, reinforcing a prudent borrowing strategy. This cap not only aligns with conservative financial practices but also fortifies the protocol against market volatility and enhances the security of the loan.

Eligible properties must be located in states where the foreclosure process does not require court intervention, thus streamlining potential recovery proceedings. The selected states are recognized for their efficiency and expediency in resolving such matters, which is advantageous for all parties involved.

To ensure the DeFi loan retains primacy and to discourage excessive leveraging, borrowers are restricted from obtaining additional lines of credit against the property, including secondary mortgages or HELOCs. This measure protects the value of the collateral and provides additional reassurance to MakerDAO governance participants that the risk is well-contained.