How Do Blanket Loans Work?

Commercial borrowers acquiring multiple properties are the most common blanket loan customers.

Blanket loans or "blanket mortgages" require multiple pieces of real estate as collateral. They are considered a non-traditional or creative funding option for commercial borrowers looking to purchase multiple properties.

Requirements

Each lender will have different requirements for creating a blanket loan. Requirements may include a minimum loan amount, a minimum credit score and term length of the loan.

Benefits

Real estate investors looking to purchase multiple properties can benefit from the timeliness of blanket loans.

One main benefit of blanket loans is quickness in acquiring multiple properties, according to Susan Lassiter-Lyons, a real estate investor financing expert. This may be critical for real estate investors who need to acquire the funding and close the deals quickly. Blanket mortgages take less time than completing multiple mortgage applications.

Purpose

The purpose of blanket loans is to eliminate the process of acquiring multiple individual loans. A blanket mortgage facilitates the purchase of multiple properties with a single loan. As such, blanket loans can be a pathway to producing great wealth for savvy real estate investors. For this reason, blanket loans have enormous value in the real estate market.

References

• Avatar Financial Group: Blanket Loans
• Portfolio Loan Course for Real Estate Investors

Resources

• First Federal Bank of Kansas City: Blanket Loans
• American Hero Finance