Blanket Loans

Blanket Loan Fundamentals

Blanket mortgages are useful to you either if you already own multiple properties, or if you are considering multiple-property deals. In either case, with multiple properties, and multiple individual mortgages you face a lot of administrative and possibly financial issues. 


Who Are Blanket Loans Right For

 Blanket loans are useful for either long-term investors or builders and developers, and each can benefit in a unique way. Investors gain from the efficiency inherent in reduced loan administration while builders/developers can overcome a very typical financing challenge unique to them. 


Multi Property Investors

 As an investor’s portfolio grows, blanket mortgages become more valuable. The greater the number of units, the more cumbersome it is to coordinate paying all the mortgages and to stay on top of lenders’ requirements. Since blanket mortgages consolidate many into few, it reduces the volume of lending-related paperwork and both monthly and annual tasks an investor needs to handle.


Blanket mortgages also offer a way to overcome the roadblock that most private investors face – that is, the limit on the number of mortgages a person can carry at one time. Because a blanket mortgage reduces the number of loans outstanding, it opens the investor to pursue additional deal financing.


Builders and Developers

Builders and developers have a specific need for blanket loans related to releasing liens on developer’s land. Developers face a dilemma; they acquire land to build on, but typically, banks will not provide a construction loan unless the lot is free and clear of mortgages. Lenders’ rationale is, if the developer defaults on the lot loan, then the lender who’s fronted the money for the construction is at risk. 


Benefits of Blanket Loans

  • Reduced Costs
  • Reduced Bookkeeping
  • No limitation on the number of properties, etc.

image370

Commercial Loan Quick App

AGL- Quick App + Authorization (pdf)

Download