Frequently Asked Questions
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Do we need an appraisal to apply for a church loan?
You may not. We attempt to establish property values through tax records, insured values, real estate market analysis, and other methods. However, on new construction loans over $1 million or when the collateral ratio appears to be outside our policy levels, we often need an appraisal. In most cases, a summary appraisal is enough. If an appraisal is needed, the church is responsible for the cost.
What terms (length of loan) and amortizations (payment schedule) do you offer?
We offer a range of options based on the needs of your church. To learn more about loan options, read How to Shop for a Church Loan.
What additional documents are needed for a construction loan?
We will need a Schedule of Values form (firm cost estimate with specific line items for cost overruns and contingencies), architectural drawings, a floor plan with elevations, and other documents as needed.
We are a district-supervised church and do not have Articles of Incorporation.
In this case, a copy of the District’s Articles and Bylaws will be used.
Do you offer a fixed-rate loan?
In the world of commercial lending, a long-term, fixed-rate mortgage loan generally does not exist. Lenders often use the term “fixed-rate” to draw potential borrowers to short-term loans. However, even though the rate is fixed, it is only for that short term. At the end of the term, the full loan amount must be paid. This is called a balloon payment. In contrast, we offer long-term permanent loans, which provide stability to churches and ministries. Our mortgage terms are up to 20 years, with rate adjustment periods of 1, 3, 5, or 7 years. We also provide interest rate caps on how high your rate can go – a guarantee you will not find with short-term mortgage loans.
What kinds of loans do you offer?
We offer a full range of loans:
- permanent first mortgage loans (refinance, purchase, improvements)
- construction draw first mortgage loans (improvement/construction loan with guaranteed take-out to permanent)
- new church plant loans
See Types of Loans for details.
How long does it take to get a loan?
As a rule, with complete information and documentation, a loan can be approved within 30 days and funded within 30 days following approval. This timeframe varies based on committee schedules and how quickly third-parties such as title companies and appraisers complete their work. Turning in all documentation with your application and staying in touch with the escrow company helps prevent delays.
Do you offer loans for more than a 20-year term?
Terms can be as long as 25 years. However, we often advise against such long terms because of their higher interest cost to the church over the life of the loan.
How are construction loans handled?
With a construction loan, the total loan amount is approved at closing and all documents are prepared and signed at closing. The church can then borrow as much as is needed during construction by drawing funds from our office. At the end of each month, the church is billed only for the interest on the amount that has been drawn up to that point. In some cases, our construction consultant may need to visit the site to help keep the project on schedule and on budget. This is a free service. When construction is done, the loan is changed over to a permanent loan with regular monthly payments.