Sustaining the United Methodist Witness
 

Church Loans FAQ

Church Loans

How does a church apply for a loan?

You can download a loan application or contact our Foundation office at 888-453-8405.

You will need to contact your District Superintendent, to make him or her aware of your plans and to schedule a charge conference at your church. In addition to completing the application, you will need to supply three-years of financial records to complete the process.

What fees apply?

There are no fees from the Foundation, but there will be a cost for documentation to record the loan. It is similar to recording a mortgage loan.

What is the average life of a loan?

Typically, the average life of a loan is seven or eight years. We write them for 15 to 20 years, but on average, most churches pay them off in seven to eight years. There is no pre-payment penalty.

How are interest rates set?

The Church Development Loan Fund Committee reviews our loan and deposit rates every quarter and makes a recommendation to the Board at its quarterly meeting. We try to keep our loan rate below the prevailing market rates. We also work to maintain a two percent spread on what we charge our borrowers and what we pay our depositors. Currently, what we are paying on deposits is significantly higher than the market.

Why choose the Foundation over banks or other commercial lenders?

We are competitive with interest rates and we are connectional. When you invest in the Certificate of Participation program you are assisting churches conference-wide to keep up with their expansion, maintenance and renovation needs, or you may be helping to build a new church in an area that is not currently being served. Because we charge less for our church loans and pay a higher rate of return on our Certificate of Participation accounts, your Certificate of Participation investment enables you to do well while expanding the kingdom of God.

What types of loans do you offer?

For the most part, our loans are related to capital issues. Churches tend to borrow for new construction, renovations, repairs and maintenance and to refinance existing loans.

What's the advantage of using your cash-flow model?

Using our cash-flow model, our staff can better help you determine a safe project limit for your church, based on your specific operating budget and other factors. We can also help with a capital campaign required to support your desired project.