What type of mortgage is commonly used by developers to finance a subdivision?

The blanket mortgage is the correct answer because it is specifically designed for scenarios where multiple properties are financed under a single loan. This type of mortgage is particularly useful for developers who are financing a subdivision, as they often need to secure funding for multiple lots or buildings simultaneously. With a blanket mortgage, the developer can access the necessary capital for the entire project while retaining flexibility to sell individual parcels. As properties are sold, the developer can pay down the blanket mortgage in increments, which can enhance cash flow management.

In contrast, a fixed-rate mortgage provides a consistent interest rate over time and is typically utilized by individual homeowners rather than developers financing multiple properties. An adjustable-rate mortgage features a fluctuating interest rate, which can introduce uncertainty in monthly payments and is not ideal for developers looking for stable financing. A second mortgage often refers to additional borrowing secured against a property that already has a primary mortgage, but it does not suit the needs of developers financing several properties at once since it would be more restrictive.