# Blanket Loan Release Clauses Explained | KREC

*How release clauses work on blanket and portfolio loans, what it costs to sell one property out of the loan, and what to negotiate before you sign.*

## Release Clauses: Selling One Property Out of a Blanket Loan

A blanket loan ties several properties to one note. A release clause is how you get one out. Here's how release pricing works and what to negotiate.

Short answer

A release clause lets you sell or refinance one property out of a blanket loan by paying down a set amount, called the release price. Release prices are often set above that property's share of the loan, commonly 110 to 125% of its allocated balance, so the remaining properties stay well secured.

Key points

- Each property carries an allocated share of the loan.
- The release price is often 110 to 125% of that share.
- Negotiate release terms before you sign.

### How release pricing works

When the loan closes, each property gets an allocated share of the balance, often based on its value. To pull one out, you pay its release price, typically a percentage above its allocation. The extra paydown protects the lender on the properties that remain.

**Deal sheet: Blanket loan on five rentals, illustrative**

|  | Amount |
| --- | --- |
| Blanket loan balance | $1,000,000 |
| Allocated balance, one property | $200,000 |
| Release price, 115% of allocation | $230,000 |
| **Balance left on four properties** | **$770,000** |

Sell that property for $300,000 and $230,000 goes to the release; the rest, after selling costs, is yours.

### What to negotiate up front

- **The release percentage**, and whether it falls over time
- **Coverage or loan-to-value tests** on the remaining properties
- **Substitution rights**, to swap one property for another
- **Prepayment penalties** on the released amount; see [DSCR prepayment penalties](https://keyrealestatecapital.com/blog/dscr-prepayment-penalties)

> Growing a portfolio? Send your rent roll and we'll map the financing for your next few doors. [Review my portfolio](https://keyrealestatecapital.com/contact)

### When separate loans are simpler

If you expect to sell or refinance properties one at a time, individual DSCR loans avoid release math entirely; see [blanket loans vs one loan per door](https://keyrealestatecapital.com/blog/blanket-loan-vs-dscr-loans).

### Frequently asked questions

#### What is a release clause in a blanket loan?

It's a provision that lets you remove one property from the loan, by sale or refinance, after paying an agreed release price.

#### How is the release price calculated?

Usually as a percentage of the property's allocated loan balance, commonly 110 to 125%, though terms vary by lender.

#### Can I sell a property that's on a blanket loan?

Yes, if the loan has a release clause. You pay the release price at closing, and the loan continues on the remaining properties.

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## Article Metadata
- **Headline:** Release Clauses: Selling One Property Out of a Blanket Loan
- **Published:** 2026-10-27
- **Author:** Key Real Estate Capital

## Frequently Asked Questions

### What is a release clause in a blanket loan?

It's a provision that lets you remove one property from the loan, by sale or refinance, after paying an agreed release price.

### How is the release price calculated?

Usually as a percentage of the property's allocated loan balance, commonly 110 to 125%, though terms vary by lender.

### Can I sell a property that's on a blanket loan?

Yes, if the loan has a release clause. You pay the release price at closing, and the loan continues on the remaining properties.

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