Your ministry is expanding, and congregation members are swelling. That’s good news but also one that can easily overwhelm you. Many aspects demand your attention from the expansion to make room for new members and arrange for funds.

Church loans are institutional lending. Therefore, there are many dynamics involved that may be challenging to navigate. The presence of the right lending partner that identifies with your goals and understands your needs to suggest the right solution is critical.

Every church is different from its unique funding requirements, and therefore there are different types of church loans to cater to the distinct needs. Let’s dig in.

New Construction Loans

These are for new constructions or renovations wherein you make interest-only payments throughout the project. After that, convert to a real estate term loan, so there is no need to refinance.

Purchasing Land

There are land loans to get you the funds you need to purchase undeveloped land to build a church. The LTV will again depend on the land’s value and location and can be anywhere between 40-70%. It is similar to a real estate term loan.


Refinancing is a reasonable solution when churches are already in debt and find it challenging to manage it. However, ministries can choose to refinance their church mortgage loan when they have a mortgage with a balloon payment due shortly. When interest rates have decreased or shortened, the length of amortization lengthens the loan term.

Credit Lines

This is an ideal financial situation when your church needs loans for short-term expenses like repairs, to carry out small renovation tasks within the premises, etc. In this model of church loans, a bank or credit union agrees to lend you a set amount for a fixed period. You may draw funds from the line of credit when you need it until you reach the maximum limit. Here, you pay interest on the amount you borrow. It’s more commonly referred to as ‘money on demand.

Church Loan Application Process

As a borrower, you don’t have to worry much about the application process. You’ll have to get in touch or contact your lender, and they will take you through the rest of the process. It starts with the loan consultant asking you a couple of questions about the ministry like goal and purpose of the loan, description of the ministry, size of the congregation, weekly attendance, estimated value of the property, etc.

After they understand your requirements, they will recommend the best solution. They will explain the loan, lender, terms, etc. If your ministry has a strong financial record, you can negotiate terms with the lender to suit you.

Once the decision is reached, you will be required to fill in an application form with all documents and submit them for approval. Once the request is approved, youโ€™re given the final offer with terms and conditions. Thatโ€™s it then, all you have to do is sign on the dotted line and wait for funds to come through so you can get started with your project.

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