The purchase of real estate by a church is one of the most common forms of church financing requests we receive. Although it is common for a church to purchase sanctuaries and multi-purpose buildings, we have seen a shift to churches looking to acquire apartment buildings and strip malls as long-term investments. While we do provide financing for these types of properties, it is important to understand the underwriting differences between traditional church property and real estate investments.
Investment properties generate an income stream by leasing space to tenants. Since these funds can help the church offset the proposed mortgage payment, the church may qualify to purchase a piece of property that they could not afford on their own.
When seeking to purchase an investment property, we recommend asking the seller for a current roll of the property, as well as operating statements for the past three years. By having these items on hand, our church financing analysts will be able to determine the strength of the transaction and the likelihood of the loan closing without issue.
When investments are held by non-profits, they are generally not exempt from paying real estate taxes on the property. However, any portion used directly by the church may qualify. We advise speaking with a qualified accountant to evaluate your church investment uses.
When evaluating an investment property, please call one of our church financing consultants to discuss the transaction. We will analyze the property at no cost and determine the prospective income your church can expect to generate. Additionally, we will discuss any concerns you may have as you move forward.