All-Inclusive Trust Deed (AITD)
The deed-of-trust version of a wraparound loan — a single instrument that 'wraps' an existing underlying loan that stays in place.
An all-inclusive trust deed (AITD) is the deed-of-trust form of a wraparound mortgage. It is a single security instrument securing a note whose balance "includes" — wraps around — an existing underlying loan that remains in place. AITD is the term used in deed-of-trust states (notably California and other Western states); in mortgage states the same structure is simply called a wraparound. The mechanics, benefits, and risks are the same as a wrap, and they matter to note buyers for the same reasons.
How an AITD works
In an AITD sale, the seller carries financing on top of their existing loan rather than paying it off:
- The seller still owes, say, $120,000 at 4% on the original loan.
- They sell the property for $200,000 and finance $180,000 at 8% via an AITD.
- The buyer pays the seller on the all-inclusive note (the $180,000 at 8%).
- The seller keeps paying the underlying $120,000 loan at 4% out of what they collect, pocketing the spread plus the gain on the wrapped balance.
The underlying loan is not satisfied — it stays in first position, and the seller's AITD sits behind it but "wraps" it into one payment for the buyer.
The due-on-sale risk
Like any wrap, the defining risk of an AITD is the underlying lender's due-on-sale clause. Transferring the property can give that senior lender the right to call its loan due. Many AITDs run for years while payments continue, but the right exists and never disappears — and it is the first thing a note buyer examines on an all-inclusive structure.
Why AITDs are harder to sell
Because the all-inclusive note sits behind an underlying loan rather than in clean first position, it carries layered risk:
- Due-on-sale exposure on the senior loan
- Performance risk that the seller fails to forward payments to the underlying lender
- Complexity of two loans secured by one property
As a result, many retail buyers will not purchase AITDs/wraps, and those who do apply a deeper discount or require strong seasoning and clean documentation. An AITD on a property that is actually free and clear is not really an AITD at all — with no underlying loan, it is simply a clean first-lien note worth more.
What it means when you sell
If you hold an AITD (or any wraparound) note and want to sell it, full disclosure is essential: provide the underlying loan's terms, balance, and payment status, plus the all-inclusive note and a verifiable payment history. Some sellers improve marketability by paying off or refinancing the underlying loan first, converting the AITD into a clean first-lien note. Mortgage Note Capital reviews AITD and wraparound notes case by case — disclosing the full structure up front is the only way to get an accurate answer.
This is general information, not legal advice; wraparound/AITD legality and disclosure rules vary by state.