Today’s real estate market is experiencing drastic changes ranging from an increase in foreclosures, decreasing property values, tightening of institutional requirements and reduced capital. However, there are financing resources available for churches that can provide stability.
It is important that churches, as borrowers, research the history of the institution with which they are dealing. Has their product line been consistent, or have they shown a pattern of chasing the latest fad? As new markets develop it is important for a company to keep their finger on the pulse and adjust accordingly, but it is entirely different to stray completely from what a company understands and does best.
Lenders have a fiduciary responsibility to their clients, so it is imperative that they remain solvent. In order to manage risk, it is important to assess each client’s financial strength and anticipated future performance. This helps achieve the ultimate goal of a successful venture.
Church loans are very unique because as the economy fluctuates, so does the church’s revenue. In part this is because if a church member loses their job, it becomes more difficult for them to tithe, and the tithes and offerings are what allow a church to function and perform their ministries. Different lenders have different lending guidelines to qualify a church, but ultimately the tithes and offerings are often evaluated to determine a church’s credit qualification and the revenue by which a church is able to borrow funds.