Church Lenders Directory

Church Renovations and Construction on the Rise

We are continuing to see heavy interest in renovation and construction loans throughout 2016.

When a church reaches 80% of its seating capacity, it is generally believed that more seats are needed or that additional service times need to be added so that the church will continue to grow. If the decision is made to expand the current facility or build a new sanctuary, then this is generally accomplished using a construction loan. A construction loan allows a church to make interest-only payments on the outstanding balance of the loan until completion. The outstanding balance on a construction loan is the amount of money the church has drawn down as a church does not take all of the money they have been approved for at loan closing, they only take what they need for the first draw and pay interest only on what they have received. When the construction is completed the loan turns into a permanent loan and the church makes regular principal and interest payments going forward.

For example, we closed a loan this month for a church in Houston, TX that was building an activity center and adding a parking lot to their current property. The church had funded most of their project through capital campaigns but had not raised enough money to complete the project. We were able to provide a 5 year fixed rate loan with a 20-year amortization at 4.45%.

We also had a church in Naples, FL seek us out for a construction loan to build a multi-purpose building to accommodate their rapid growth. They had been at their current location for more than 18 years, owned the property free and clear, and ultimately did not desire to move. The church leaders decided that adding the multi-purpose building would provide enough room for all of their members and give them room to grow. We were able to provide a 5 year fixed rate loan with a 20-year amortization at 4.35%.

The trend for construction/renovation loans is coming from both churches with older buildings and churches seeking to utilize their extra land. In both of the above-mentioned cases, the churches had extra land and rather than move to accommodate their growing congregations, the churches decided to utilize their additional land to expand. If your church is thinking about purchasing, refinancing, renovating or constructing a building, please call one of our loan officers at 800-710-6762 for a free consultation to find out more about our loan programs. You can also visit our website