CHURCH LOAN FUND

CRITERIA

There are ten criteria for the EPC Church Loan Fund:

1. The requesting church must submit a Church Loan Fund Application and the church’s financial information, including statements of balance, expenses, and income in accordance with generally accepted accounting principles. Upon loan approval, the church and guarantor must sign the Loan Agreement.

2. The original fee rate will be established at the time of the loan. The rate is valid for one (1) year, renewed on each succeeding anniversary date, and will be the greater of 1% or the average of the five highest 2-year certificates of deposit as quoted at www.bankrate.com. The maximum term of the loan varies depending on how the funds will be used:

• Land: five (5) years.
• Capital Improvements: five (5) years.
• Equipment: five (5) years.
• Building: fifteen (15) years.

The loan repayment minimum also varies depending on how the funds are used:

• Land: 20% of original principal each year.
• Capital Improvements: 20% of original principal each year.
• Equipment: 20% of original principal each year.
• Building:  6.67% of original principal each year.

3. Loan repayments are scheduled for twelve monthly installments each year, including above-noted principal plus 1/12 of applicable annual fees each month.

4. Loans are restricted for church site acquisition and/or building construction or purchase, capital improvements, or equipment purchase.

5. The maximum loan limits to an individual church are:

• 10% of total Church Loan Fund or $150,000, whichever is less.
• 75% of the value of mortgaged property.
• An amount not to exceed 40% of a church’s previous year’s income (operating budget).

6. Concerning loan security, a presbytery is required to contractually guarantee timely monthly repayment of a church’s mortgage upon the recommendation of the Finance Committee of the EPC Board of Directors following its determination that the loan is a sound financial venture. The Church Loan Fund shall carry a first or second mortgage on property for which the loan is being made.

7. A church receiving funds from the Church Loan Fund must have adequate insurance, guaranteed title, and performance bonds from all involved contractors.

8. A church receiving funds from the Church Loan Fund must have its land and existing building(s) appraised by a qualified appraiser. New construction should be granted only following a competitive bidding process.

9. If a church that has received funds from the Church Loan Fund disaffiliates with the EPC for any reason or in the event of default, the loan principal balance becomes due immediately.

10. Community zoning laws must be adhered to by the church receiving funds. These requirements should be satisfied prior to loan approval.

THE PROCESS

Step 1: Each EPC church pastor and session seeking an EPC loan should study and follow the Church Loan Fund Criteria and comply with each item in order to properly complete the CLF Application. At this time, alert the respective Presbytery Church Development Committee of the church’s Application.

Step 2: Each church will submit the Loan Fund Application to the Finance Director of the Office of the General Assembly for review.

Step 3: Submit the reviewed CLF Application, with all required supporting documents, to the local church’s respective Presbytery Church Development Committee (CDC). The Office of the General Assembly will assist in coordination with the Presbytery CDC.

Step 4: Verification and reasonable documentation of expenditures covered by the loan will be provided to the Finance Committee.

Step 5: Approval by the Finance Committee will be given after all preceding steps have been completed and are satisfactory.

Step 6: The EPC church that has been approved for a loan from the CLF will complete, sign, and submit the Loan Agreement and receive a certified check from the CLF through the Office of the General Assembly.

Step 7: Repayment of the loan shall be made according to an agreed-upon schedule of payments as specified in the Loan Agreement. Loans on land, capital improvements, and equipment are to be paid within five (5) years. Loans on church facilities are to be paid within fifteen (15) years.

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