The World Church is the only authorized lender for any congregation
seeking a loan as part of the financing plan for a building program.
Outside loans from a bank or church member or any other source are not
permitted. By keeping all loans "in-house" we avoid any possibility of a
loan being called or foreclosed by others. Rates and terms for HWRF
loans are kept favorable to the congregation due to the ability of the
World Church to secure debt at favorable terms.
1. LOAN TERMS AND INCENTIVES
Houses of Worship Revolving Fund are made to campgrounds, congregations,
emerging congregations and Mission Centers for the purchase,
construction, expansion or major repairs and remodeling of their church
facilities. Although emerging congregations may accept responsibility
for repaying HWRF loans, it is understood that the sponsoring Mission
Center must accept contingent liability for the loan should the
congregation be unable to repay on schedule. In effect, the sponsoring
jurisdiction must “co-sign” a HWRF loan to an emerging congregation.
The maximum loan available for projects is up to two-thirds (2/3) of the
total project cost. Loans $200,000 and over require further review and
approval by the Presiding Bishopric. Approval of each loan is based on
the following criteria:
1.1 Availability of Houses of Worship Revolving Funds.
1.2 Demonstrated ability to repay the loan, including the completion
of a Capital Campaign, if necessary.
1.3 Availability of proceeds from the sale of existing property
(where applicable) to the borrowing entity's equity.
1.4 Disclosure of congregational planning, financial and growth
performance, and compliance with the procedures outlined in this
document.
1.5 Satisfaction of the World Church Insurance and Bonding
Requirements by all contractors involved in the project.
1.6 Placement and maintenance of the congregational insurance
program within the World Church Insurance Program.
1.7 Full compliance with the approval process designated by the
Presiding Bishopric.
The repayment period on new loans is:
loans under $15,000.00 - 5 years
loans $15,000.00 and over - 15 years
loan terms over 15 years MUST be approved by the Presiding
Bishopric.
Interest rates for loans will be set by the Presiding Bishopric as of
January 1st of each year. The new rate will reflect the average cost of
funds in the previous twelve months, rounded up to the next highest
multiple of 25 basis points. Interest rates for all outstanding loans
will be adjusted at that time, with the new rate affecting the February
payment (interest is paid in arrears). Regular loans will have a maximum
rate of:
6% for the first five years,
7% for the second five years,
8% for the final five years.
To allow for congregational budget planning, the payments for regular
loans will be set as if the loan were made at the maximum level of
interest, i.e. 6%, 7% and 8% for each five-year interval that applies.
Interest will be charged and calculated as explained above, and the
allocation of principal and interest for each payment can be viewed on
the following month's statement. In this way, congregations will enjoy
the benefit of interest rates lower than the maximum through a faster
amortization and quicker repayment period.
In projects where a HWRF loan is part of the financing plan, local funds
will be utilized first to meet project expenses. An Interim Note will be
used to secure loans while the approved amount is being drawn by the
local branch. When all draws have been taken, this note will be replaced
by a permanent Promissory Note. Each Interim Note must be signed and
returned to Legal Services before to the next draw is issued.
Interest on HWRF loan proceeds, released during construction, will
accrue at the prevailing rate set by the Presiding Bishopric in
accordance with the procedure outlined above. The maximum rates
referenced in that section will not apply until all draws are taken and
a permanent Promissory Note is signed. Interest-only payments will be
due 30 days after the first draw, and monthly thereafter until the final
note is signed.
Once approved, a loan commitment shall be effective for one year. If
construction or remodeling does not begin within that time frame, a loan
commitment extension for an additional year must be requested by the
Congregation or Mission Center seeking the loan. It is possible that
financial conditions and/or administrative personnel may have changed
and a new application will be required.
2. REQUESTS FOR DRAWS
Requests for draws shall be in writing, and may be faxed (816/521-3099)
or e-mailed with supporting
documentation to accompany each request. When requesting draws by fax or
e-mail the original request must follow by regular mail. Requests for
draws may come from either the Pastor or Congregational Financial
Officer.
NOTE: Allow 7 to 10 business days for processing requests for
draws.
3. PAYMENT OF INVOICES
Checks will be made payable to the vendor/contractor and can be mailed
to the Pastor or Congregational Financial Officer for delivery, or
directly to the vendor/contractor. Another option for payment is
electronic transfer of funds to the vendor/contractor’s bank account. In
order to have funds electronically transferred the vendor/contractor the
following information is needed from the vendor/contractor:
Name of Bank
Address of bank
Account name
Account number
ABA/Routing number
With each draw a duplicate Interim Note will be sent which must be
initialed and signed by the Pastor and Congregational Financial Officer
acknowledging receipt of the check. Once signed one original Interim
Note is to be returned to Legal Services and the second original is to
be held for the Congregation’s records. No additional draws will be made
until the Interim Note for the previous draw has been initialed, signed
and returned to Legal Services.
Invoices received for payment of services on a contract that has not
been reviewed and approved by Legal Services will be held until approval
for payment of such invoice has been received by the Mission Center
officers. |
