The House of Worship Revolving Fund Loan (HWRFL) program is available to assist local jurisdictions such as congregations, mission centers and campgrounds in the purchase of buildings and property as well as building projects including major repairs, renovations, and improvements. Jurisdictions who wish to apply will need to complete a loan application and send it to their mission center officers for approval. Once the mission center officers have approved, the application should be sent to the Office of General Counsel, along with conference or board minutes approving the loan and the necessary mission center officer approvals. World Church is the only authorized lender for any jurisdiction seeking a loan as part of the financing plan for a building program. Outside loans from a bank, church member, or any other source are not permitted. By keeping all loans “in-house,” we can set reasonable rates and terms for HWRF loans to jurisdictions, as well as avoid the possibility of a loan being called due or a property being foreclosed on by others. The availability of HWRF loans is subject to the amount of funds available to World Church.
1. Building Project Guidelines and HWRF Loans
Jurisdictions should be aware that there are additional requirements and guidelines related to building projects regardless of whether or not a jurisdiction will be requesting a HWRF loan or already has sufficient resources to fund the proposed building project. These requirements and guidelines may mean the jurisdiction needs to complete other steps or receive other approvals before requesting a HWRF loan.
For example, there is currently a church-wide “pause” on capital projects, which allows time to assess financial needs and have intentional conversations about missional priorities. To receive an exception for a proposed building project or purchase of property, jurisdictions must comply with the capital project pause approval process. To request an exception to the capital projects pause, please contact your Field Support Minister, Field Bishop or Field Apostle.
Jurisdictions must also comply with the Church’s general guidelines for building projects, including the following:
- Review of any construction contracts or other contracts involved in the project by the Office of General Counsel
- Compliance with the World Church Insurance and Bonding Requirements by all contractors involved in the project
- Participation by the jurisdiction in the World Church Risk Program
- Full compliance with the approval process as required by the Presiding Bishopric
2. Loan Terms
Houses of Worship Revolving Fund loans are available to congregations, mission centers, and campgrounds to assist in the purchase, construction, expansion, or major repairs and renovation of their facilities. Although congregations accept responsibility for repaying HWRF loans, it is understood that the mission center accepts contingent liability for the loan should the congregation be unable to repay on schedule. In effect, the mission center “co-signs” on HWRF loans to its congregations.
The congregation is responsible for paying the first one-third (1/3) of the total project cost. The maximum amount of World Church funds available is up to two-thirds (2/3) of the total project cost. The congregation must use their one-third (1/3) prior to making draws against the loan.
HWRF loans are subject to the approval of the Presiding Bishopric. Loans over $100,000 may require a more in-depth review by the Office of General Counsel and Presiding Bishopric. Approval of each loan is based on the following criteria:
- Availability of Houses of Worship Revolving Loan Funds
- Demonstrated financial ability by the jurisdiction to repay the loan and ongoing increased operating costs (higher utilities, maintenance, and insurance costs, for example), including the completion of a capital campaign for fundraising, if necessary
- Disclosure of congregational planning, financial and growth history and projections
- A commitment by the jurisdiction to comply with the Church’s building project guidelines
The repayment period on new loans is:
- Loans under $15,000.00—5 years
- Loans $15,000.00 and over—15 years
Interest rates for loans are set by the Presiding Bishopric as of January 1 of each year. The rate reflects the cost of funds over the previous 12 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.
To allow for congregational budget planning, the payments for HWRF loans will be calculated using an interest rate of 6.5%. Interest will be calculated and charged based on the annual HWRFL rate as described above, and the allocation of principal and interest for each payment can be viewed on the following month’s statement. In this way, congregations enjoy the benefit of the lowest possible interest rate which may result in a shorter repayment period. Monthly loan payments are withdrawn monthly on or around the first day of the month via electronic funds transfer (EFT) initiated by Fiscal Services.
Interest on HWRF loan proceeds released during construction will accrue at the annual rate set by the Presiding Bishopric in accordance with the procedure outlined above. 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 purchase, construction, or remodeling does not begin within that time frame, the jurisdiction must request a loan commitment extension for an additional year. It is possible that financial conditions and/or administrative personnel will have changed during that time and a new application will be required.
3. Requests for Draws
Requests for draws must be in writing and emailed to the Office of General Counsel at legalservices@CofChrist.org or faxed to (816) 521-3099 with supporting documentation accompanying each request. Requests for draws may come from either the pastor or congregational financial officer.
With each draw requested an Interim Note will be sent to the congregation for signature by the pastor and congregational financial officer acknowledging receipt of the funds. Once signed, one original Interim Note is to be returned to the Office of General Counsel and the second original is to be maintained in the congregation’s records. No additional draws can be made until the Interim Note for the previous draw has been initialed, signed and returned to the Office of General Counsel. Once all funds have been drawn or the project is complete, the Interim Notes will be replaced by a Promissory Note.
4. Payment of Construction Invoices
To be approved, draw requests must include appropriate supporting documentation, such as an invoice or billing from the vendor or contractor.
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 funds transfer (EFT) to the vendor/contractor’s bank account. To have funds electronically transferred to 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
If construction invoices are submitted for a contract that has not been reviewed and approved by the Office of General Counsel, there will be a delay in payment and the invoice will be held until the Office of General Counsel can review the contract and payment of the draw request and communicates approval to the mission center officers.