Which term refers to the gradual discharge of a mortgage as condo units sell?

The term that refers to the gradual discharge of a mortgage as condo units sell is "Blanket Mortgage." A blanket mortgage is a single loan that covers multiple properties or units within a development, such as a condominium complex. As individual condo units are sold, a portion of the loan is paid down from the proceeds of those sales. This allows the developer or property owner to finance a larger project, using the sales of the individual units to gradually reduce the overall debt associated with the blanket mortgage.

This method is particularly beneficial in real estate developments, as it provides flexibility and helps to manage cash flow effectively while the project is being sold. The other options listed do not apply to this scenario: Take-out loans involve refinancing a construction loan once the property is completed; wraparound mortgages are a form of seller financing that essentially wraps an existing mortgage with a new loan; and collateralized loans refer to loans secured by an asset, which does not specifically address the discharge of a mortgage in relation to unit sales.