Conventional loans from Fannie and Freddie have strict limits: a maximum of 10 financed properties per borrower, strict income documentation requirements, and property condition standards that exclude distressed properties. When you hit the 10-property limit or cannot meet income documentation standards, portfolio lenders become essential. They write their own rules and can accommodate investors that conventional lending cannot serve.
A type of portfolio loan, blanket loans finance multiple properties under a single mortgage. Rather than maintaining 10 separate loan payments, you have one payment covering your entire portfolio. Blanket loans simplify management, often offer better aggregate rates, and allow you to add and release properties from the blanket as your portfolio evolves.
Community banks and credit unions are the most common sources of portfolio loans — they hold their loans locally and have more discretion in underwriting. DSCR lenders like Kiavi, New Silver, and Lima One offer portfolio products for investors with qualifying rental income. Hard money lenders who transition to longer-term products sometimes offer portfolio solutions as well.
Portfolio loans typically carry rates 0.5–1.5% above conventional. Terms may be shorter — 15 or 20 years rather than 30 — or may have balloon payments. Lenders may require cross-collateralization where all properties serve as security for the blanket loan. Understand every term before signing — portfolio loan structures are more variable than conventional products.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.