In the lending world, the terms “Portfolio” and “Blanket” are often used interchangeably. Typically speaking, a Portfolio Loan, or Blanket Loan, refers to a single Loan that covers two or more pieces of Property. For starters, Blanket Loans are not intended for Primary Residences, or Vacation Homes, or any other form of “Owner Occupied” Real Estate. Instead, Blanket Loans are designed for the Investor who Rents, or Flips, or Builds homes as a Business. And even though the Real Estate is all held together as collateral on the Loan, typically you can sell a single piece of Property without having to satisfy the entire Loan. You can use a Blanket Loan to Purchase multiple Properties, or Cash-Out on multiple Properties, or even to consolidate multiple Loans into one package. In theory, a Blanket Loan makes it easier to finance multiple Properties rather than having to take out multiple Loans for the same.
BENEFITS OF A BLANKET LOAN:
RENTAL PROPERTY INVESTORS:
Many investors encounter a shared challenge: the limitation on the number of Mortgages they can hold simultaneously. This restriction can significantly impede expansion. A Blanket Loan can consolidate Loans on existing Rental Properties into one Loan and/or allow you to buy multiple Properties at once without encountering any restrictions. Also, if you already own multiple Properties and would like to take advantage of your Equity position, a Cash-Out Refinance will allow you the opportunity to retrieve up to 75% of the accumulated value of your Portfolio.
HOUSE FLIPPERS:
A Blanket Loan allows House Flippers to streamline the acquisition process by enabling the purchase of multiple Properties at once. This is particularly beneficial when encountering a favorable deal involving a “Package” of properties. If you come across a good Package deal that you want to acquire and possibly Rehab, and then put back on the Market, a Blanket Loan would be much more suitable than any Traditional Loan Scenario would be. Also, as each property is sold, you only have to pay off the portion of the Loan that is associated with that Property without destabilizing the rest of the Portfolio. The Blanket Loan structure ensures that the repayment process is gradual and tied to individual Property sales, thereby maintaining stability across the entire Portfolio and allowing the Investor to continue pursuing additional opportunities.
BUILDERS AND DEVOLPERS
A Blanket Loan can also be used to purchase multiple Parcels of Land while capitalizing the Construction portion as well. Instead of obtaining separate loans for each individual Parcel, a Blanket Loan is used to consolidate the financing. Alongside financing the Land acquisition, the Blanket Loan also covers the Construction costs associated with developing the Land. This can include expenses such as site preparation, infrastructure development, and building construction. The Blanket Loan would allow the Developer to Purchase the Land, perform the Construction, and then pay off the Loan as the homes are sold.
PROGRAM HIGHLIGHTS:
• Min loan amount: $75,000 per Property for Portfolios under $500,000, and
• Min $50,000 per Property for Portfolios over $500,000
• Purchase: Up to 80% LTV
• Refinance (Rate and Term): Up to 80% LTV
• Refinance (Cash Out): Up to 75% LTV
• Min 660 FICO (<660 on a case by case basis)
• Choose 5-4-3-2-1 “Step Down” Pre Pay or No prepayment penalty
• No Income verification on DSCR Programs
• Interest Only option available
• Foreign National Programs available
• Interest Rate as Low as 6.49%
PORTFOLIO LOAN OPTIONS:
BRIDGE
PURCHASE
REFINANCE