Blanket Loan: One Mortgage Across Multiple Properties

One loan, one payment, one set of terms — secured by a lien on every property in the package. Blanket loans are usually portfolio products held by the originating bank (rather than sold to Fannie or Freddie), so the lender sets its own guidelines on property count, credit, and structure. That flexibility is the point: you can finance a portfolio that no single conforming loan would cover.

The feature that makes a blanket loan practical for investors is the release clause. It lets you sell an individual property out of the package and release the lien on just that property — paying down the loan by an agreed amount — without having to refinance or pay off the entire blanket. Without a release clause, selling one property could require retiring the whole loan.

Because every property secures the same loan, they are cross-collateralized — a default doesn’t threaten just one property, it can put the entire package at risk. That concentration of risk is the main downside, and it is why blanket loans suit investors who are confident in the portfolio’s combined cash flow.

Blanket loans also commonly carry balloon terms (for example, a 5–10 year term on a 30-year amortization) and prepayment penalties, like other portfolio products. Weigh the convenience of one consolidated loan against those structural trade-offs and the cross-collateral risk.