What does a blanket loan cover?

A blanket loan is a type of financing that covers multiple parcels of real estate under a single mortgage. This arrangement allows a borrower to secure one loan that can encompass several properties, which is particularly beneficial for real estate developers or investors who are purchasing multiple properties for investment, development, or construction purposes.

The flexibility of a blanket loan enables the borrower to manage their investments more efficiently, as they can finance several properties under one agreement instead of securing separate loans for each parcel. This can also provide potential cost savings in terms of lower closing costs and simplified repayment terms.

In contrast, a single parcel of real estate would not require a blanket loan, as it only deals with one property. Additionally, the classification of commercial or residential properties is not relevant to the main feature of a blanket loan, which is its coverage of multiple real properties regardless of their type.