Bond Financing is sometimes
misunderstood by borrowers, so we have briefly
explained the program below. General Terms, which
are subject to change at any time without notice,
are as follows:
LOANS
OVER $5 MILLION
Rate: Contact
us for latest rates
Term: 15 to 30 years
Bond Fee and Other Closing Costs: About
10% which is financed for the term of the loan.
Church Operating: At least 3 years
Church Membership: Case by Case
Basis
LOANS UNDER $5 MILLION
(MINIMUM LOAN $3,000,000)
Rate: Contact
us for latest rates
Term: 15-20 Years
Bond Fee and Other Closing Costs: About
10% which is financed for the term of the loan.
Church Operating: At least 3 years
Church Membership: Case by Case
Basis
Let's say the total cost including Bond Fee and
other closing costs on a 20-year 6.95% fixed rate
loan is 10%. The
fee and closing costs (except for appraisal
& underwriting deposit) are financed and
amortized over the term of the loan (20 years),
that's the equivalent of only about half a point
(.50%) or an APR of 7.45%.
So the church is getting a twenty year fixed
rate loan at the equivalent of 7.45%, with NO
origination. The loan payments are still based at
a rate of 6.95% with an APR of 7.45%.
Compared to bank financing, our Bond offer is a
good deal. Bank rates in most cases are fixed
for only five years, with terms of 5 to 10 years
with a balloon. Plus out of pocket of 2 to 3
points, plus all other expenses, which in most
cases are not financed by the bank loan. And when that balloon
comes due, there's no guarantee of the rate and
fees at that time.
That is why we consider the Bond product
a more attractive and better offer than Bank
Financing, because in addition to the low fixed
rate, you will get a loan of up to 20 years fully amortized
- no balloon!
ADDITIONAL
INFORMATION BOND FINANCING PROGRAM:
There are many advantages to using a Bond issue to
finance your Church:
FIXED RATE FINANCING: Interest rates
are fixed throughout the twenty or twenty-five
year amortization period of your loan. Thus, your
interest rate will not fluctuate with the prime
rate, nor will we require a "balloon
payment" at the end of three, five, or seven
years. This is particularly attractive given the
current interest rate environment. Additionally,
you will know at funding, each payment scheduled
throughout the loan term, which is crucial to a
budget based organization.
FLEXIBILITY: There will be no
pre-payment penalties on your loan. This gives you
the flexibility to retire bonds early, without
locking the Church into a more ambitious payment
schedule, which could become burdensome if your
revenue situation should change.
STABILITY: The legacy that you will
leave to succeeding trustees is one of stability
and prudent fiscal management. Other sources
of financing may or may not continue to have a
presence in the Church Mortgage Business three,
five, or seven years down the road. Banks have a
tendency to move in and out of different market
segments depending upon factors that the Church
has no ability to influence. Loan officers may
come and go and banks may be bought, sold, or
merged.
There is never a guarantee that the new owners of
the bank will be interested in financing Churches.
We will give you stability and permanence.
Origination fees may be higher than that of a
depositor's bank or institutional investor, but
you will only incur those fees once and they are
incorporated into your loan. As opposed to
incurring points and closing costs each time a
balloon payment comes due. Additionally, there are
no burdensome "restrictive covenants" in
our loans, which tend to place your lender in your
boardroom for years to come. We will only require
proof of insurance and an updated financial
statement each year, so that we have a file of
information that is relevant to investors who are
trading your bonds in the secondary market.
FUTURE FUNDING: Many congregations
elect Bond Financing because Bonds enable
borrowing Churches to issue subsequent offerings
to fund future phases of expansion. Since our
business is Church lending, you can be assured
that we will be available for your future Bond
issues to fund later stages of development. This
flexibility may be will be crucial if future
phases of construction are anticipated.
MEMBER SALE: While it is not a
requirement, we can make bonds available to
members of the congregation at a significantly
reduced underwriting cost. If the Church elects to
have bonds offered to it's members, the Church
saves on the cost of issuing the bonds, while the
members are able to participate to an even greater
extent in the funding process. Matured bonds could
also become an additional source of future
donations for the Church.
REQUIRED ITEMS FOR BOTH BOND & BANK
FINANCING:
1. Church Finance Online Application located @ http://www.cfgbusiness.net/servappchurch.htm
2.YTD Statement of Revenues and Expenses and
Balance Sheet
3. 2005 Statement of Revenues and Expenses and
Balance Sheet
4. 2004 Statement of Revenues and Expenses and
Balance Sheet
5. Attendance and Giving reports for 2003, 2004
and 2005
6. List if Individual Pledges
7. Pictures of the church (via email if possible)
8. Copy of sales contract, down payment and source
of down payment (if applicable)
The information can be fax to 212-480-8098 or
email to underwriting@churchlenders.com.
For information, please contact us via email at Info@churchlenders.com.
Thank you!
THIS IS NOT AN OFFER TO MAKE A LOAN. PROGRAMS,
RATES, TERMS FEES ARE SUBJECT TO CHANGE AT ANY
TIME WITHOUT PRIOR NOTICE.
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