A partial release clause is commonly found in which type of mortgage?

A partial release clause is typically associated with a blanket mortgage. This type of mortgage is used to cover multiple properties or lots under a single loan agreement. The partial release clause allows for the release of one or more properties from the mortgage after certain conditions are met, such as the borrower paying off a portion of the mortgage amount or reaching specific milestones in the development or sale of the properties.

This flexibility is particularly useful in real estate development where a developer may want to sell off individual lots or parcels while maintaining a mortgage on the remaining properties. By using a partial release clause, the developer can improve cash flow and move forward with sales without needing to refinance or pay off the entire mortgage.

The other types of mortgages mentioned do not typically incorporate this clause. A construction mortgage specifically funds the building of a project and doesn’t usually involve multiple lots under one loan. A package mortgage includes both real and personal property but doesn’t commonly feature a partial release clause. A wraparound mortgage allows a borrower to refinance existing debt without having to pay it off in full; while it might involve a second loan wrapping around an original loan, it doesn’t include partial releases related to other properties. Thus, the blanket mortgage is the clear match for a partial release clause.