Church Financing – Real Estate

One of the most common types of church financing we receive is for the purchase of real estate to be used by the church. Although it is common for a church to purchases a sanctuary, fellowship hall, gymnasium and multipurpose building we are seeing more and more instances of church financing requests for the purchase of investment property like apartment buildings and strip malls. Although we provide financing for these property types also, it is important that the church understand how the underwriting of this type of church financing request differs from that of a traditional church property.

An investment property has an income stream generated by leasing space to tenants; this income stream can help the church offset the proposed mortgage payment on the new property. This can help the church to qualify for the loan to purchase the property as opposed to when they are purchasing an owner occupied building which requires that the entire burden of the mortgage payment be born by the church.

When applying for church financing to purchase an investment property, you want to make sure that you ask the seller for a current rent roll of the property and the last 3 years operating statements from the property. With these items, our church financing analysts can determine the strength of the transaction and the likelihood of the loan closing.

It is important to remember that investment properties owned by churches are not generally exempt from paying real estate taxes, except any portion of the property that is directly used by the church. Consult your accountant for full details.

If you are looking for church financing to purchase an investment property, please call one of our church financing consultants to discuss the transaction. We can analyze the property and tell you how much income the church should generate from the property as well as the likelihood of the loan being approved by an underwriter.