Blanket loan or individual loans for a rental portfolio?

THE NUMBERS

ILLUSTRATIVE — published program floors, not a quote or a commitment to lend. Subject to underwriting, appraisal and final credit approval.

What does cross-collateralisation actually mean?

Every property in the pool secures the whole debt. That is what allows aggregate underwriting and a single set of closing costs, and it is also the real cost of the structure: a default is a default across the pool, not on one address. It also means you cannot quietly sell one house and keep the loan intact — the release provision is the mechanism, and it needs to be in the note from day one rather than negotiated later.

How does a partial release work?

You pay the releasing property's allocated loan balance plus a premium — 115% of that allocated balance is the working figure — and the lien on that address is released. The remaining pool then has to pass its DSCR test on its own, and the note typically allows up to a quarter of the pool per year without re-underwriting. Substituting another property of comparable value and rent, rather than paying down, is usually allowed too. Release terms vary widely between lenders; read them before you sign, not when you have a buyer.

How is portfolio DSCR calculated?

In aggregate: total monthly rent across every door divided by the total PITIA of the pool. One vacant unit or one under-rented house does not fail the file if the others carry it, which is the structural advantage over financing each door separately. Silt's working threshold on a blanket is a blended 1.15. The corollary is that a portfolio can pass while an individual door inside it would not qualify on its own — and it can also fail as a whole because of one badly performing address.

What does the pricing difference look like?

The sheet takes 12.5 basis points off a five-plus property blanket. The larger saving is usually not the rate at all: one appraisal order, one title order, one set of lender fees and one closing table instead of six of each. Against that, appraisals on a blanket are still ordered per property, and legal work on the release provisions is more involved. Run both structures on total cost to close plus annual debt service, not on rate alone.

When do individual notes win?

When you intend to sell a property within a year or two, when the doors belong to different partnerships or entities, when one property is materially weaker and you would rather it stood alone, or when you want to refinance addresses on different schedules. Separate notes also keep a title problem on one house from holding up five others. If the portfolio is a long-term hold in one entity, the blanket is usually the cleaner instrument; if it is a trading book, it usually is not.

What is the minimum property count?

Five doors in one borrowing entity is the working minimum for a blanket. Below that a single-asset DSCR loan is normally faster and cheaper, and the desk will say so. There is no cap on the number of financed properties — agency lenders commonly stop at ten, but a private DSCR lender underwrites the rent roll and the sponsor instead of counting loans.

A worked example — six single-family rentals

At 1.15 the pool sits exactly on the blended threshold and inside the 1.00–1.19 band, which adds 25 bps — dropping to 65% LTV or holding one door out restores the margin. Illustrative only.

WHAT WE NEED FROM YOU

• Rent roll — every door. Address, units, in-place rent, lease end, occupancy.
• Trailing twelve on the pool. Taxes, insurance, HOA and any management fee.
• Entity documents, once. Articles, operating agreement and EIN for the holding LLC.
• Blanket insurance schedule. One policy across the schedule beats a stack of binders.
• Schedule of real estate owned. Everything held, financed or free and clear.
• Reserves. Twelve months of pool PITIA on a portfolio file.

FREQUENT QUESTIONS

How many properties do I need for a blanket loan?

Five doors in one borrowing entity. Below that a single-asset DSCR loan is usually cheaper and faster.

Can I sell one property out of a blanket?

Yes, through the partial-release provision — typically 115% of that door's allocated balance, with the remaining pool passing its DSCR test.

Does one vacant unit sink the file?

Not usually. The DSCR is blended across the pool, so strong doors can carry a weak one.

Is a blanket loan cheaper?

12.5 basis points on the sheet, plus one closing instead of several. Appraisals are still ordered per property.

Do all the properties have to be in the same state?

No, though a multi-state pool means several title orders and slightly longer timelines.

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