Definition
A blanket mortgage secures multiple properties under one loan with a release clause allowing individual property sales without refinancing the entire loan. It's ideal for developers and investors owning several properties—one loan consolidates multiple assets.
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Blanket mortgages secure multiple properties under one loan, useful when an investor owns several properties and wants to refinance them together. Blanket mortgages can be refinanced as properties are sold (with partial lien release clauses allowing individual property sales without refinancing the entire loan). Blanket mortgages simplify management by consolidating multiple properties into one loan. However, they increase risk: if the borrower defaults, all properties are at risk of foreclosure. Blanket mortgages are common in investment and development contexts.
Pro Tip
Blanket mortgages simplify management but increase default risk; ensure release clauses protect you if you need to sell individual properties.
Example
A developer owns 5 rental properties and obtains one blanket mortgage for $2 million secured by all 5 properties, with a release clause allowing sale of individual properties.