How a blanket loan for multiple rental properties works

A blanket loan for multiple rental properties is a single mortgage secured by more than one property at once. Instead of five loans, five payments and five closings there is one of each, and all five properties stand behind the same debt.

It also gets called a portfolio loan or a blanket mortgage. The mechanic that matters is cross-collateralisation: the lender holds a lien on every property in the pool, so the properties stop being independent of each other.

The question to ask before any other is what happens when you sell one property. A blanket loan that cannot release an individual property locks the whole pool until the loan is paid off, which is a serious constraint on a portfolio you intend to trade rather than hold indefinitely.

Most blanket loans handle this with a partial release provision: pay down an agreed amount of the balance and the lender releases that property from the lien so it can be sold clean. The terms of that provision live in the loan documents, they differ by lender, and they are far easier to negotiate before closing than after it.

Blanket lending on rentals is business purpose, available in any state, so the state the properties sit in affects the detail rather than whether the financing exists. A pool spread across several states is normal.

Send the address, the current rent and the current loan on each property, plus what you intend to do with the portfolio over the next few years. That last part decides whether a blanket loan or separate loans is the right structure, and it is the part most people leave out. Eligibility and terms vary by scenario and by lender guidelines; nothing here is a commitment to lend.