A blanket loan, also known as a portfolio loan or a blanket mortgage, is a mortgage that finances more than one property. Blanket loans enable real estate investors to grow their rental portfolios by including multiple properties on one loan with only one lender, one monthly payment, and one fee. Here’s what investors interested in blanket loans should look for:
Lenders who are investor-friendly and have blanket loan experience.
- Lenders who actively look to fund single-family residential property portfolios understand the needs of investors and have loan programs tailored to meet their needs.
Lenders who will loan to LLCs or business entities.
- Many real estate investors with growing rental portfolios hold title through business entities to reduce liability. If you hold title through LLCs, then you need a blanket lender who will finance to LLCs.
Lenders who offer longer loan terms with lots of flexibility.
- Investors should always look for flexible loan programs with opportunities to optimize their monthly cash flow.
Other considerations investors should consider when evaluating blanket lenders include:
- If the lender has prepayment penalties, and if so, how much they are and how much they affect you
- If the lender has balloon payments, or if long-term loans are fully amortized
- What the lender’s release clauses are if you choose to sell individual units in the future
Learn more about blanket loans and our Rental360 Portfolio+ Program.
Related: The Best Blanket Loan for Rental Investors, What is a Blanket Mortgage?