A loan that encumbers multiple properties is called a ______ loan.

A loan that encumbers multiple properties is called a ______ loan.

• A. Blanket loan
• B. Construction loan
• C. Jumbo loan
• D. Mezzanine loan

Answer: (A)

A blanket loan is a single loan that encumbers multiple properties under one lien. It’s commonly used by real estate investors who hold a portfolio and want to finance several parcels with one instrument. Because the loan covers multiple properties, the lender has a secured claim on all of them, and there are often release provisions that let you remove individual properties from the loan as you sell them or as you pay down the balance. This differs from other types: a construction loan is usually for financing the development of one property and funds are drawn as work progresses; a jumbo loan simply refers to a loan amount that exceeds conventional limits; a mezzanine loan is a secondary financing layer that sits behind the primary mortgage and does not place a blanket lien on multiple properties.

A blanket loan is a single loan that encumbers multiple properties under one lien. It’s commonly used by real estate investors who hold a portfolio and want to finance several parcels with one instrument. Because the loan covers multiple properties, the lender has a secured claim on all of them, and there are often release provisions that let you remove individual properties from the loan as you sell them or as you pay down the balance.

This differs from other types: a construction loan is usually for financing the development of one property and funds are drawn as work progresses; a jumbo loan simply refers to a loan amount that exceeds conventional limits; a mezzanine loan is a secondary financing layer that sits behind the primary mortgage and does not place a blanket lien on multiple properties.