Blanket Loans for Commercial Real Estate: Guide

What Is a Blanket Loan for Commercial Real Estate?

A blanket loan for commercial real estate is a single mortgage that covers two or more properties under one set of loan documents, one interest rate, and one monthly payment. Instead of managing separate loans for each property in your portfolio, a blanket loan consolidates everything into a unified financing structure that reduces closing costs and simplifies administration. For anyone researching blanket loan commercial real estate options, this guide covers rates, terms, qualifications, and release clauses.

For commercial investors who own or plan to acquire several properties, a blanket loan for commercial real estate offers a practical alternative to juggling individual mortgages with different lenders, rates, maturity dates, and payment schedules. Blanket mortgages are commonly used by portfolio investors, developers, and business owners with real estate holdings across several locations.

The defining feature of a blanket loan is cross-collateralization. All properties included in the loan serve as collateral for the total debt. This means the lender has a lien on every property in the portfolio, not just one. While this increases the lender's security and can result in more favorable terms, it also means a default could put every property at risk.

Blanket loans typically range from $500,000 to $50 million or more, with interest rates between 6.75% and 9.50% depending on lender type, borrower qualifications, and portfolio strength. Terms span 5 to 30 years with loan-to-value ratios of 65% to 75%. Whether you are looking at acquisition loans for new purchases or refinancing an existing portfolio, a blanket structure can streamline the entire process.

How Does Cross-Collateralization Work in Blanket Loans?

Cross-collateralization works by pledging multiple properties as combined security for a single loan obligation. Every property in the blanket mortgage secures the full loan balance, giving the lender recourse to the entire portfolio if the borrower defaults.

Suppose you own five commercial properties collectively worth $5 million and take out a blanket loan for $3.5 million (70% LTV). Each of those five properties has a lien against it for the full $3.5 million loan, not just its proportional share. If one property drops in value, the lender can look to the equity in the remaining properties to maintain their collateral position.

From the lender's perspective, cross-collateralization reduces risk because the loan is backed by a diversified pool of assets. This diversification often translates into lower interest rates (typically 0.125% to 0.50% below individual loans), higher total leverage, and more flexible underwriting on properties that might not qualify on their own.

The key protection borrowers need is a release clause, which allows you to remove individual properties from the blanket mortgage by paying down a specified portion of the loan balance. Without one, you cannot sell or refinance any single property until the entire loan is paid off.

Cross-collateralization also creates portfolio-level underwriting advantages. A strong property generating a 1.50x DSCR can offset a weaker property at 1.10x DSCR, bringing the blended portfolio DSCR to a level that satisfies lender requirements. Use our DSCR calculator to model how your individual properties combine into a portfolio-level coverage ratio.

How Much Can You Save With a Blanket Loan vs. Individual Mortgages?

Blanket loans can save commercial investors $20,000 to $60,000 or more in upfront closing costs compared to financing each property separately, plus ongoing savings in administrative time and complexity.

The most significant savings come from reduced closing costs. When you finance five properties individually, you pay five sets of origination fees, five appraisals, five legal reviews, and five sets of recording fees. A blanket loan consolidates all of this into a single transaction with substantially lower combined costs.

Rate savings represent another major advantage. A 0.25% rate reduction on a $5 million loan saves $12,500 per year in interest, or $125,000 over a 10-year term. For larger portfolios, rate discounts can reach 0.50% or more.

There is also the leverage advantage. Properties that might not qualify for individual financing due to lower DSCR or higher vacancy can be included in a blanket loan when stronger properties offset those weaknesses. Run your numbers through our commercial mortgage calculator to compare blanket versus individual loan payments.

What Are Current Blanket Loan Rates and Terms in 2026?

Blanket loan rates in 2026 range from 6.75% to 10.50% depending on lender type, borrower profile, property quality, and portfolio size. Credit unions and community banks offer the most competitive rates for well-qualified borrowers with stabilized portfolios.

Credit Unions offer rates at 6.75% to 7.50%, though they typically serve smaller portfolios with geographic restrictions. Community and Regional Banks price blanket loans at 7.00% to 8.25%, well-suited for portfolios of 3 to 15 properties valued between $2 million and $20 million. CMBS and Conduit Lenders offer rates from 6.75% to 8.00% on larger stabilized portfolios with non-recourse structures. Private and Bridge Lenders charge 8.50% to 10.50% but provide closings in 14 to 30 days with flexible underwriting. Explore our permanent loan programs for long-term refinance options after stabilization.

Most commercial blanket loans carry 5 to 10 year fixed-rate periods with 25 to 30 year amortization, resulting in a balloon payment at maturity. Prepayment penalties vary but typically include yield maintenance, defeasance, or step-down structures.

What Qualifications Do You Need for a Blanket Loan?

Blanket loan qualification requires meeting threshold requirements for credit, income, experience, and net worth, with standards that vary by lender type. Blanket loans carry slightly higher qualification bars than individual commercial mortgages because the lender is underwriting a portfolio rather than a single property.

Credit Score: Banks and credit unions require 680 minimum (700 or higher preferred). CMBS lenders require 660 or above. Private lenders accept scores as low as 620 for borrowers with strong portfolios.

Debt Service Coverage Ratio: Banks and CMBS lenders require a blended DSCR of 1.25x or higher across all properties. Private lenders may accept 1.00x to 1.10x for transitional portfolios. Calculate your portfolio DSCR using our DSCR calculator.

Loan-to-Value Ratio: Maximum LTV ranges from 60% to 75%. Banks cap at 70% to 75%, CMBS allows 65% to 75%, and private lenders max out at 60% to 70%.

Net Worth and Liquidity: Most lenders require net worth equal to or exceeding the loan amount and liquid reserves covering 6 to 12 months of debt service post-closing.

Experience: Two or more years of commercial real estate experience is standard for banks, while CMBS lenders prefer three or more years. Review our guide on commercial loan down payment requirements for additional qualification details.

What Types of Properties Can You Include in a Blanket Loan?

Blanket loans can include virtually any type of commercial or investment property, and many borrowers combine different property types within a single loan. All properties must be acceptable to the lender as commercial collateral and collectively meet portfolio-level underwriting standards.

Multifamily properties are the most commonly included asset type, representing approximately 35% of blanket mortgage portfolios. Mixed-use properties account for roughly 20%, followed by retail strip centers at 18%, office buildings at 12%, industrial properties at 10%, and self-storage facilities at 5%.

Mixed Property Type Portfolios are generally acceptable to lenders, though the underwriting process is more involved. The blended analysis typically works in the borrower's favor when the portfolio includes a mix of stabilized and higher-yielding properties.

Geographic Diversification can be both an advantage and a limitation. Some lenders prefer all properties within a single state, while national lenders accept properties across multiple states. For multi-state portfolios, contact our team to identify lenders who accommodate cross-border blanket loans.

Why Are Release Clauses Critical in Blanket Loans?

Release clauses are critical because they preserve your ability to sell, refinance, or exchange individual properties without paying off the entire blanket loan. Without a release clause, your portfolio is effectively locked together for the full loan term.

A release clause requires the borrower to pay down a predetermined percentage of the allocated loan balance for the property being released. This release price typically ranges from 110% to 125% of the property's proportional allocation. For example, on a $4 million blanket loan with $1 million allocated per property, a 115% release clause means paying $1,150,000 to release one property.

Key release clause terms to negotiate:

• Release price percentage: Aim for 110% to 115% rather than the 120% to 125% that some lenders initially propose.
• Release order restrictions: Push for flexibility to release any property at your discretion, not just the weakest assets first.
• Partial release fees: Negotiate to minimize administrative fees of $1,000 to $5,000 per release.
• 1031 exchange compatibility: Ensure release timing aligns with IRS 1031 exchange deadlines if you plan to defer capital gains.

Always prioritize negotiating favorable release terms before signing a blanket mortgage.

What Is the Step-by-Step Process to Get a Blanket Loan?

The blanket loan process follows a structured path from portfolio assessment through closing, typically taking 60 to 120 days depending on lender type and portfolio complexity.

Step 1: Portfolio Assessment (Week 1-2) Calculate combined appraised value, total net operating income, and overall equity position. Determine which properties to include and identify any potential complications.

Step 2: Lender Identification (Week 2-3) Approach 3 to 5 lenders with a preliminary portfolio summary to gauge interest and compare terms. Not all commercial lenders offer blanket loans.

Step 3: Loan Package Preparation (Week 3-5) Compile trailing 12-month operating statements, rent rolls, lease abstracts, tax returns, and personal financial statements for every property.

Step 4: Application and Underwriting (Week 5-10) The underwriter evaluates portfolio-level DSCR, combined LTV, individual property performance, and borrower strength.

Step 5: Appraisal and Due Diligence (Week 8-14) The lender orders appraisals, Phase I environmental assessments, title searches, and surveys on all properties.

Step 6: Loan Commitment and Closing (Week 12-16) Execute a single mortgage covering all properties after final document review.

Contact Clearhouse Lending to start your blanket loan process with a free portfolio assessment and preliminary term sheet.

How Do Blanket Loans Compare to Portfolio Loans?

Blanket loans and portfolio loans are related but distinct structures. A blanket loan is defined by its collateral structure (multiple properties securing one loan), while a portfolio loan is defined by how the lender holds it (retained on their own books rather than sold to the secondary market).

A blanket loan's primary advantage is collateral consolidation with simplified management, reduced closing costs, and portfolio diversification benefits. A portfolio loan's primary advantage is underwriting flexibility, since the lender can customize terms, accept non-conforming properties, and make exceptions to standard guidelines.

The overlap occurs when a bank originates a blanket loan and retains it in their portfolio. This combination offers the best of both worlds. Community banks are the most common source of these hybrid structures.

For many commercial investors, the optimal strategy is a blanket loan from a portfolio lender, capturing both the collateral efficiency and underwriting flexibility. Explore our permanent loan options and refinance programs to find the right long-term structure.

What Are the Biggest Risks of Blanket Loans?

The biggest risk of a blanket loan is cross-default exposure, meaning a problem with one property can jeopardize your entire portfolio. Understanding and mitigating this risk is essential before consolidating your properties under a single mortgage.

Cross-Default Risk is the most significant concern. If you default on the blanket loan, the lender can foreclose on any or all properties in the portfolio, not just the property causing the problem. Stress-test your portfolio by modeling scenarios where 1 to 2 properties experience simultaneous vacancy spikes of 30% or more.

Reduced Flexibility compared to individual loans can limit strategic options. Selling or refinancing individual properties requires navigating release clause provisions and paying release premiums.

Lender Concentration Risk arises from having your entire portfolio with a single lender. If that lender changes their appetite or is acquired, your entire portfolio faces refinancing risk simultaneously.

Valuation Interdependence means a decline in one property's value affects the overall portfolio LTV, potentially triggering covenant violations even if remaining properties perform well.

To mitigate these risks, maintain strong cash reserves (12 or more months of debt service), negotiate favorable release clauses, and diversify properties across locations and tenant bases. Learn more about our SBA loan options for lower-leverage alternatives or reach out to our lending team for a personalized risk assessment.

When Does a Blanket Loan Make Sense for Your Portfolio?

A blanket loan makes the most sense when you own 3 or more commercial properties, plan to hold them for a similar time horizon, and want to reduce costs and complexity while accessing better terms.

Ideal candidates for blanket loans include:

• Portfolio investors who own 3 to 20 or more properties and want to consolidate multiple existing loans into a single mortgage.
• Acquisition-focused investors who plan to purchase several properties in a short timeframe with a built-in acquisition line.
• Developers building multiple projects simultaneously who need cross-collateral support to increase total leverage.
• Business owners with multiple locations who want to consolidate real estate debt under one structure.

A blanket loan may not be the best fit when:

• Your properties are in significantly different stages and need separate tailored loan structures.
• You plan to sell individual properties on different timelines and want maximum flexibility.
• You prefer to diversify lender relationships to reduce concentration risk.

If you are unsure whether a blanket loan fits your strategy, schedule a free consultation with Clearhouse Lending. Our commercial lending team can analyze your portfolio and recommend the most efficient financing structure for your goals.

Frequently Asked Questions About Blanket Loans for Commercial Real Estate?

What is the minimum number of properties required for a blanket loan? Most lenders require a minimum of 2 to 3 properties. Some accept as few as 2, while others prefer 3 to 5 to justify the additional underwriting complexity. There is no maximum limit, and some blanket loans cover 50 or more properties.

Can I add new properties to an existing blanket loan? Yes, many blanket loans include provisions for adding properties after closing, sometimes called an accordion feature or future advance clause. Negotiate this during initial loan structuring if you plan to grow your portfolio.

Do blanket loans require personal guarantees? Most bank and credit union blanket loans require full personal recourse guarantees. CMBS blanket loans are typically non-recourse with standard carve-out guarantees for fraud, environmental liability, and bankruptcy. Private lenders vary but generally require recourse.

What happens if one property in my blanket loan is destroyed or condemned? Insurance proceeds from a destroyed property are typically applied to reduce the blanket loan balance by the allocated amount for that property, effectively releasing it from the mortgage. Condemnation proceeds follow a similar path.

Can I use a blanket loan to finance properties in different states? Yes, though it adds complexity. National banks, CMBS lenders, and some private lenders regularly originate multi-state blanket loans. The loan requires separate mortgage recordings in each state, but overall savings still outweigh individual loans in most cases.

How do blanket loan rates compare to individual commercial mortgage rates? Blanket loan rates are generally comparable to or slightly lower than individual commercial mortgage rates. Cross-collateralization reduces lender risk, translating to rate discounts of 0.125% to 0.50% on well-structured portfolios.

What is the typical loan-to-value ratio for a blanket loan? Blanket loan LTV ratios typically range from 65% to 75% based on combined appraised value. Banks offer up to 70% to 75%, CMBS lenders cap at 65% to 75%, and private lenders limit LTV to 60% to 70%.

Can I refinance individual properties out of a blanket loan? Yes, if your blanket loan includes a release clause. You refinance the individual property with a new lender, pay the release price (typically 110% to 125% of the allocated balance), and the blanket lender removes their lien. Visit our refinance programs page for current options.

Sources: Federal Reserve Economic Data (FRED), Mortgage Bankers Association Commercial/Multifamily Lending Reports, American Bankers Association Portfolio Lending Survey, National Association of Realtors Commercial Real Estate Market Insights, CBRE U.S. Capital Markets Reports, Fannie Mae and Freddie Mac Multifamily Lending Guidelines, U.S. Small Business Administration Lending Statistics.