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Blanket Loans

 

Blanket Loans are a type of loan typically used to finance more than one piece of property. They can be used to finance construction, purchases or cash-out refinances.  The main feature of Blanket Loans is that they cover more than one piece of real estate.  They can also be referred to as Cross-Collateralization Loans.

 

Who Would Benefit from a Blanket Loan?

Development Blanket Loans

Real estate developers often choose Blanket Loans to purchase large plots of land that they can then divide up into multiple smaller parcels, develop and sell off individually. Instead of having to obtain a new mortgage or refinance the existing mortgage whenever a piece of the development sells, real estate developers can use a Blanket Loan to purchase a large development and then release a part of the mortgage as smaller parcels are sold, while the remaining mortgage remains intact.

 

Construction Blanket Loans

Builders tend to use Blanket Loans to build multiple homes in a single neighborhood. As each home sells, the proportionate part of the mortgage that was used to build that home is repaid to the lender. The balance is adjusted accordingly and continues one phase at a time until every home has been sold off and the balance is repaid in full.

 

Purchase Blanket Loans

Flippers and Investors acquiring new properties can use Blanket Loans to finance part or all of the cost of a new property purchase. This strategy allows an investor to access available equity in his or her existing portfolio and use that equity to make the down payment and pay closing costs on the new property.  Investors can use Blanket Loans to purchase a new piece of real estate without having to sell another property or use their cash.

 

Cash-Out Refinance Blanket Loans

Investors often use Blanket Loans to refinance individual property loans and consolidate them together into one loan, using the equity in their real estate portfolio to obtain cash for additional investing, to perform any needed repairs or other purposes.

 

How It Works

With a Blanket Loan, you can use the total value of your real estate portfolio as collateral for the loan. Blanket loans help you to purchase or take a cash-out refinance of the combined equity from multiple properties into one simple “blanket” loan.  You can use those funds to help grow and expand your business.

While a traditional mortgage comes with a due-on-sale clause, that isn’t the case with Blanket Loans. Due-on-sale clauses mean that the outstanding mortgage must be paid in full right away when the property sells. A Blanket Loan comes with a release clause that allows you to sell off part of the collateral and repay only the proportionate part of the loan. This feature helps to facilitate sales and purchases of several properties without having to obtain multiple mortgages.

 

Program Highlights

  • Quick closing
  • Low, interest-only monthly payments
  • Sell home on your schedule
  • Save money

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Products

Standard Investor Blanket Loan

  • Loan amounts ranging from $500,000 to $5 million
  • 75% loan-to-cost (LTC) ratio for purchase transactions
  • 75% loan-to-value (LTV) ratio for refinance transactions with 90 days of seasoning
  • Cash-out refinancing is acceptable
  • No tax returns – instead, loan qualification is based on portfolio value and income
  • 90-day seasoning – value based on appraisal after only 90 days of ownership
  • Streamlined documentation
  • 5 or 10-year fixed terms with amortization up to 30 years

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Apartment Investor Blanket Loan

  • Loan amounts ranging from $1 million to $50 million
  • 75% loan-to-cost (LTC) ratio for purchase transactions
  • 75% loan-to-value (LTV) ratio for refinance transactions with 90 days of seasoning
  • Cash-out refinancing is acceptable
  • No tax returns – instead, loan qualification is based on portfolio value and income
  • 90-day seasoning – value based on appraisal after only 90 days of ownership
  • Streamlined documentation
  • 5 or 10-year fixed terms with amortization up to 30 years

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Frequently Asked Questions

Question: Does a blanket loan give real estate investors more options and opportunities to grow their businesses?
Answer: Yes! A blanket loan is a much more effective way to finance groups of properties. Suppose you had ten properties you were trying to finance at once and dealing with ten separate loan files, ten underwrites and ten closings. That can be overwhelming. While the diligence is primarily the same for portfolio or single-asset rental (DSCR) loans, it can be much more efficient only to have to deal with one processor, one underwrite, and one closing versus many.

 

Question: What are some benefits of a rental blanket loan?
Answer:Westpark Loans combine your properties under one umbrella loan with only one payment to help make managing your growing rental business easier and more cost-effective. One payment, one servicer, one underwrite, and one closing—all of these efficiencies add up to you spending more time on real estate and less on financing.

 

Question: Is there a limitation on the number of individual properties financed into a blanket loan?
Answer: No, there is no limit to the maximum number of properties that can be financed in a blanket loan. Our minimum property requirement is five or more properties.

 

Question: Is there a cap on the number of assets, loans and dollar amounts that a blanket lender can lend to a single borrower?
Answer: We don’t have max exposure limits like you might find at a local bank for our blanket loans.

 

Question: Is a rental blanket loan a non-recourse loan?
Answer: We offer both full recourse as well as non-recourse in some instances.

 

Question: What are some cost benefits of a rental blanket loan?
Answer: A blanket loan will save you money on fees. Transactionally, the fees are slightly lower on a rental portfolio loan versus financing each individually. You may be asking why. Well, we get some economies of scale from our vendors due to the bulk nature of the transaction.

 

Question: How do I qualify for a rental blanket loan?
Answer: You must own five or more properties and have real estate investing experience.

 

Question: What if I have more questions about rental blanket loans?
Answer: Contact our rental blanket loan team with any questions. They’re here to answer your questions and help you navigate your options—so you can be set up for long-term success.

 

 

Apply Now

To get started, please complete our application, call us at 844-574-5626 or schedule a call with a loan officer below.

 

 

 

Schedule a Call

To determine the right loan program with you, schedule some time with a loan officer to discuss your options. Call us at 844-574-5626 now or schedule a time to meet with a loan officer.