Blanket Loan – Cross Collateralizing Commercial Mortgages

By |3 min read|Published On: October 3rd, 2020|

What is it and when should an investor use it to their advantage?

The Blanket Loan is a single loan that is collateralized by multiple individual properties. This is different from any traditional mortgage loan in several ways.  Blanket loans are typically used for financing residential rental properties, investment properties and commercial real estate and also for the real-estate developments like subdivisions.

The blanket loan will offer the real estate investor with a myriad of flexible opportunities in managing their portfolio. Along with that in a blanket loan, you can avoid the requirement to apply for multiple mortgages.

Blanket loans offer numerous advantages for investors. They are as follows:

  • The blanket loans will help in consolidating the properties for refinancing purposes.
  • The blanket loans offer access to more equity. If you have equity in one property that you already own that you want to use to purchase another property, pooling the properties under one blanket or cross collateralized mortgage will get you to access to use the equity in the property you already own in place of a cash down payment.
  • Another major advantage of the blanket loans is there is no limit to the number of properties that can be covered within this type of loan. This means you will be able to include as many properties in the deal as you want to. This facility is extremely valuable to real estate investors, where with some financing there is a limit to the number of mortgages that an entity can obtain.
  • Typical the commercial or investment properties that make up the blanket loan or cross collateralized loan don’t have to be in the same location, city or state.
  • One payment- Instead of making numerous payments with a blanket loan you make one monthly payments.

The phenomenon of cross-collateralization happens in blanket loans. Cross-collateralization is when one asset acts as collateral for more than one single loan.   Blanket mortgage lenders and banks use cross-collateralization for reducing the risk and lending more.

A very simple example: Let’s say you own property A and it has a value of $500,000.00 with a mortgage of $100,000.00. You have $400,000.00 equity in that property. If you want to buy property B for $500,000.00. If you blanket both properties into one loan and a lender will lend you 50% of the values you can buy property B with no out of pocket cash and only using your equity in property A.

Even though cross-collateralization is common in commercial real estate lending or large transactions, it typically doesn’t exist with residential owner occupied mortgages. A blanket loan is a term closely associated with cross-collateralization because blanket loan refers to using multiple assets for securing a single loan. A real-estate developer might take out one loan for funding several buildings and pieces of land. The properties and land will collectively secure a single loan.

Gelt Financial as a direct private lender closes blanket loans all of the time. If your bank won’t provide the financing you need due to credit, income or some other reason speak to Gelt Financial, LLC who focuses on non-bank commercial and investment mortgages. A blanket or cross collateralized mortgage is a great tool that we use.

If your bank is not providing you the financing that meets your needs. Talk to us contact us at

When your bank says No we say Yes!


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