Often, the first step in the loan process is to purchase a new plot of land. Generally the church will need 20-30% of the cost of the land in cash or future pledges in order to obtain a loan for its purchase.
After the land is purchased, or if the church is building on their existing site, the next phase would then be to develop plans and facility studies.
Unless the church has a large amount of cash already saved, this is normally the time for the church to look into a capital campaign to raise the funds that will be necessary for construction.
After the church has done the necessary feasibility planning, the next step is to apply for a loan. Upon receipt of an application, Church Investors Fund presents the loan application to our Loan Committee which meets once each month. After approval from the Committee, a Commitment Letter is sent outlining the amount and terms that Church Investors Fund would commit to. Once the church has reviewed these terms and agreed to them by signing and returning the Commitment Letter, Church Investors Fund will initiate obtaining Title Insurance on the church property. Title Insurance is essential and must be in place before construction can begin. The process of obtaining title insurance normally takes 3 to 4 weeks, once the Commitment Letter is received back in our office.
Upon receiving Title Insurance, actual construction can begin, assuming all necessary permits are in place. Please be aware that permits can take considerable time to obtain. Talk to your local government to determine necessary time frames.
When the construction phase is done, the loan will be converted to a traditional mortgage, where principal and interest payments are due each month.