Purpose. Blanket, open-end, and package mortgages are
the three most common mortgages made in relation to their
purpose. A “blanket mortgage11 may be issued against a subdivision
with individual mortgages granted on specific projects
and released from the blanket mortgage as sales are
m a d e . ^ An "open-end mortgage” is one which permits the readvance
of amortized principal on an existing mortgage.
Additional advances during the life of the loan may be made
for the purpose of improvement and- maintanence of mortgaged
property. In practice, the sum of the improvement, floor
covering, for example, is added to the unpaid balance of the
6Weimer and Hoyt, op. cit., p. 228.
5
mortgage and payment on the principal and interest of the
additional sum are added to the amortized payments scheduled
originally,? A "package mortgage*1 includes financing for
equipment such as plumbing and air conditioning to be incorporated
in the mortgage agreement. Such equipment must be
designated exactly and made part of the mortgage agreement.
The Federal Housing Administration insures mortgages of this
type and has developed an extensive list of equipment which
is considered eligible -in mortgage agreements.