Who are blanket mortgages for?
Blanket mortgages are most often used by real estate developers, investors or house flippers who purchase multiple residential or commercial properties, like multifamily homes or apartment buildings.
If you intend to finance or invest in the purchase of more than one property, a blanket mortgage could be a good loan choice. Also known as blanket loans, these mortgages help investors cover the expenses of buying and developing land that borrowers want to divide into many individual lots. If you’re a house flipper, you might seek a blanket mortgage to benefit from the flexibility so you have more buying and selling options.
Blanket mortgages allow owners to sell one of the properties that’s a part of the blanket and trigger a release clause, which releases the lien from that particular property as the bank is paid back.
How do blanket mortgages work?
Blanket mortgages work similarly to regular mortgages, except unlike regular mortgages, they’re for one or more properties. For real estate investors or house flippers, they can help to streamline the loan process since there’s only one loan to cover all of their investment properties instead of several separate loans with different lenders.
Still, it may be harder to find a lender that offers blanket mortgages, and they may be harder to qualify for than traditional mortgages. You may also need to put down a larger down payment, and you may be required to make a balloon payment. A balloon payment is a single, large payment that’s due at the end of the loan.
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Blanket mortgage pros and cons
Blanket mortgages, like other types of home loans, have advantages and disadvantages.
Advantages of a blanket mortgage
One of the primary advantages of a blanket mortgage is that it lets investors and borrowers put multiple properties under one loan. Property owners can save a significant amount of money, time and energy by taking on one blanket mortgage rather than a different loan for each property.
A blanket mortgage might also let a borrower keep more cash on hand. Instead of paying fees associated with multiple loans, the borrower only pays fees for a single loan. This potentially frees up capital for a real estate investor to put toward other uses.
» MORE: Is buying a house a good investment?
Disadvantages of a blanket mortgage
Blanket mortgages have some downsides. First, you may have to put more money down than with a regular mortgage because of the higher loan amount. Also, you may need to pay a balloon payment at the end of the loan. The loan terms can also be different from traditional mortgages, and defaulting on the loan may result in the loss of all the secured properties.
FAQ
Is a blanket mortgage right for me?
A blanket mortgage may be right for you if you’re looking to invest in multiple properties at once in order to flip them. It may also be the right choice for you if you have good to excellent credit and enough money for a down payment.
What is the difference between a blanket mortgage and a package mortgage?
While a blanket mortgage is a type of loan that covers the financing for multiple investment properties, a package mortgage covers both a property and property’s assets, such as furniture and appliances.
Can you refinance a blanket mortgage?
Yes, you can refinance a blanket mortgage, just like you can with other types of mortgages. Refinancing a mortgage may help you to get lower interest rates or streamlined payments.
Bottom line
A blanket mortgage is a type of loan that lets a real estate investor or developer combine multiple mortgages into just one loan. This can make it easier to manage the finances of several properties. However, just because you plan on purchasing multiple properties doesn’t mean a blanket mortgage is the best option for you. If you’re just getting started in real estate, it could be less risky to go with another type of loan.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Consumer Financial Protection Bureau, “What Is a Balloon Payment? When Is One Allowed?” Accessed on Nov. 7, 2025.
