Church Articles

Lease to Purchase

Many times a fast growing church will find itself in a situation where it can not afford to purchase a large enough building to house its current congregation or the expected growth of its congregation in the near future but it finds itself in a location that is too small and stifling growth. Churches that find themselves in this situation often end up renting a larger facility and attempting to save money until they can purchase or build a facility of their own.

There is another solution that is often overlooked:

Leasing with the option to purchase a building is a great way to get the space you need and “save” your down payment towards the purchase of the property. Although there are many ways to structure a lease to purchase option a church should keep several things in mind:

You generally want to determine the purchase price of the property as a part of the lease purchase agreement.
You want to determine how much of each monthly payment is going towards the purchase price of the building.
You want to determine what happens when you make improvements or repairs to the building. Do those improvements and repairs go towards the purchase price?
What time frame you have to complete the lease purchase agreement, the longer the better.
Ask for partial seller held financing to be a part of the purchase when the time comes. Don’t get too aggressive here, ask them to hold a second trust of 10% or 15% when the time comes to complete the purchase.

You may not get everything you want in the lease to purchase agreement but understanding what can be done is a vital step in the negotiation process.

For more details on this or if you are looking to purchase or refinance a building please do not hesitate to call me.

Remember we have one of the most generous referral programs around. If you introduce us to someone that we provide a loan for we will pay you ½% of the loan amount, up to $10,000. If you are a mortgage broker you can of course charge points or earn the referral fee.