The Iowa United Methodist Foundation’s Loan and Accounting Specialist, Cassie Parks, answers nine frequently asked questions about our Iowa United Methodist Church Building Fund Trust loan program.
What types of loans, terms, and rates does the Foundation offer?
We offer construction loans with terms up to one year. Our current rate for construction loans is 6.50% but rates are set monthly on the first business day. We also offer permanent loans with an amortization of up to 15 years with a five year rate reset. Short-term, unsecured loans that are $50,000 or less are also offered upon board approval.
What types of projects can our church borrow money for?
We offer loans for a variety of projects ranging from small to big projects such as:
- Construction of a new building
- Purchase of a parsonage or an existing building
- Land acquisitions to expand a church’s ministry
- Renovations to the sanctuary, fellowship hall or another church-related building
- Ministry expansions such as a preschool
- Refinancing of an existing institution’s loan
- Large/small appliance or technology updates
Is there a penalty for prepaying or paying off the loan?
No, there is no penalty for prepayments or early payoff.
Is there a balloon payment at some point?
No, we don’t have balloon payments. We adjust the rate every five years to the current rate the Foundation offers at the time over the lifetime of the 15 year loan.
Does the Foundation charge points on the loan?
No we do not charge points. There are just standard closing costs, which are generally lower than those of a financial institute.
What sets the Foundation apart from other lending institutions?
- Our loans are generally less restrictive with lower costs than other lenders.
- We make loans only to churches and church-related entities.
- We are more flexible with terms.
- We understand church needs and finances better.
Does the Foundation offer support after a loan closes?
We are generally available to help with the needs within our realm. We have many years of experience between our staff to help you out.
Where does the Foundation get the money to lend to churches?
Our Building Fund Trust Certificate Program, which offers 1-, 3-, and 5-year fixed rate investments, provides funding for loans to churches. Check out our website at www.iumf.org/services-for-churches/building-fund-trust/ to learn more about our BFT certificates.
How do I learn more about the Foundation’s loan program?