Church Growth Fund Loan InformationThe following are some of the most frequently asked questions about the loan programs of the RCA's Church Growth Fund (RCACGF): 1. Who may borrow from the RCACGF?
Church Growth Fund Loans are available to (a) churches that are incorporated, "organized" (as that term is defined in the RCA's Book of Church Order), and have been worshipping in the RCA for at least three years, and (b) classes to buy or improve facilities for classis supervised ministries (including congregations or churches that do not meet the criteria outlined above), and in such instances the classis and supervised ministry must be co-borrowers. 2. For what purposes may money be borrowed?
Money may be borrowed to pay the cost of purchasing, constructing, or renovating church buildings. 3. What types of loans are made?
The RCACGF makes short term unsecured loans and longer term secured loans called Church Growth Fund Loans (CGF Loans). The maximum amount for short term unsecured loans is $25,000. The maximum amount for CGF Loans is $2,000,000. 4. How soon must the money be repaid?
Secured loans must be repaid in twenty years or less. Short term unsecured loans must be repaid in five years or less. All loans are fully amortized and repaid in equal monthly installments. 5. What are the interest rates?
The rate for short term unsecured loans is 6 percent. The rate for CGF Loans is currently 6.25 percent for the first three years, and thereafter are reviewed and established periodically by the RCACGF rate committee. Typically they are comparable to or slightly lower than commercial loan interest rates generally available in the open market. Under certain limited circumstances, a church may apply for a discounted rate for the first three years of the loan term. For additional details, contact the RCACGF loan officer (Pam Goslinga) at 888-722-4958 or pgoslinga@rca.org. 6. How are the loans documented?
The church signs a promissory note and the loan is secured by a lien against the borrower's property. Typically a corporate resolution from the borrower, title insurance (for loans over $100,000), casualty and liability insurance, an opinion letter from the borrower's attorney (for loans over $500,000), a survey or similar document depicting the boundaries of the borrower's property (for loans over $100,000), and similar items customary in a loan closing must be provided as well. For short term unsecured loans only a promissory note and corporate resolution are required. 7. Must the borrower pay points and fees?
The borrower does not pay any points or origination fees, or any of the costs of the RCACGF's staff or consulting architect. Generally, the borrower's expenses are limited to premiums for title insurance and casualty insurance, the cost of a routine search of public records (to satisfy certain environmental requirements), the cost of the borrower's attorney, and the cost of recording the lien against the borrower's property. For short term unsecured loans the only cost would be the cost (if any) of the borrower's attorney. 8. How long does it take for a loan to be approved, and what is the loan approval process?
Short term unsecured loans can be approved within seven days after the application is approved by the classis and forwarded to the RCACGF's loan officer. For all other loans approval can take from two to six weeks after the application is approved by your classis and forwarded to the RCACGF's loan officer (depending upon when it is received). To ensure that your application is considered in a timely manner, be sure to coordinate it through your Regional Synod Executive.
The loan approval process for churches is as follows: STEP ONE -- The loan application is completed by the consistory (with any necessary assistance by the classis and regional synod representative) and submitted (with proof of consistory and/or congregational approval) to the RCACGF loan officer. At the same time copies must also be sent to the applicant's classis for recommendation of approval or disapproval by its applicable committees, and to the applicant's regional synod executive for his or her review and comment. STEP TWO -- If approval of the application is recommended by the classis and the regional synod executive, then they note their respective recommendations on their copy of the application and forward it to the RCACGF loan officer. STEP THREE -- The application is submitted to the RCACGF board of directors for final approval or disapproval at one of its regularly scheduled meetings. The board's current practice is to meet in person at least two times a year and periodically by conference call between "in person" meetings. If the application is for $100,000 or less, the application may be submitted to a sub-committee of the RCACGF board for consideration between regularly scheduled board meetings.
The approval process for a classis loan application is essentially the same, except that the process starts at the classis (rather than local church) level. The approval process is much shorter for short term unsecured loans -- approval must be recommended by the borrower's classis and granted by a three-person sub-committee of the RCACGF. 9. What would be the required monthly payment amount for a loan from the RCACGF?
That would depend upon the interest rate in effect and the amount borrowed. Currently the interest rate is 6.25% per annum. If the loan is for $100,000, and assuming no prepayments are made, the required monthly payment amount would be $730.93. If the loan amount you seek is more or less than $100,000, adjust the required monthly payment amount in proportion to the difference. For example, if you seek a $300,000 loan, triple the required monthly payment amount. If you seek a $75,000 loan, reduce the required monthly payment amount by 25%. As noted in paragraph 5 above, the interest rate is adjusted periodically. Currently this happens on each anniversary of the loan (after its first three years). Although the current interest rate for secured loans is 6.25% per annum, the rate may be higher or lower when it is adjusted for your loan, and as a result the required monthly payment amount may increase or decrease. (The required monthly payment amount may also be influenced by any prepayments that are made on the loan.) The interest rate cannot increase by more than 2% per rate adjustment and cannot increase by more than 4% over the life of the loan. Churches that qualify for a discounted rate for the first three years of the loan would have a lower required payment amount. For additional details, contact the RCACGF loan officer (Pam Goslinga) at 888-722-4958 or pgoslinga@rca.org.
For other examples, feel free to contact the RCACGF's loan officer. 10. Are funds available?
The availability of loan funds varies frequently, depending upon the rate at which new loans are approved and funded and existing loans are repaid. Contact RCACGF staff to learn whether any funds are currently available, and if so whether your project may qualify for them. 11. Does the RCA have additional resources (other than loan funds) that might be useful to us as we consider whether--and if so, what--to build?
Absolutely! The RCA offers a number of resources to congregations contemplating building projects. Loans from the RCACGF are only one of them. Other resources include: - the general church development expertise of your regional synod staff and the RCA's director of development;
- the fundraising expertise of the RCA's development staff;
- Work in Progress, a comprehensive workbook published by the RCA ($7.95), which outlines the basic principles, guidelines, and procedures a congregation can follow as it contemplates a building project, and includes helpful tools such as a checklist for project development, an architect questionnaire, a building program checklist, an organization survey form, and information regarding handicapped accessibility and architectural barriers; and
- numerous other print resources available through Faith Alive Christian Resources.
 You can learn more about these services by contacting the following people: For church development expertise, contact your regional synod executive or the RCA's director of development, Laura De Vries, by phone (616-541-0886) or email (ldevries@rca.org). For fundraising expertise, contact the RCA's development staff, Laura De Vries or Scott Engelsman, by phone (616-541-0886 or 616-541-0892) or email (ldevries@rca.org or sengelsman@rca.org). For Work in Progress or any other materials from Faith Alive Christian Resources, either consult the resource catalog your church receives each year or contact, Jane Schuyler, congregational support specialist, by phone (1-800-968-6065) or email (jschuyler@rca.org). 12. How can I support the work of the RCACGF?
You can pray for the board and staff of the RCACGF, as well as for all of the churches participating in its loan programs. Additionally, you can invest in RCACGF investment notes or make a donation to the RCACGF. More information about these opportunities is available from Paul Karssen, RCACGF director, by calling him at (888) 722-4958. To receive information about investment opportunities, email the RCACGF investment note administrator (Noreen Fargione) at nfargione@rca.org. If you have questions about the Church Growth Fund's loan programs that have not been answered here, you may call the loan officer (Pam Goslinga) at 888-722-4958 or send her your question by email: pgoslinga@rca.org. If you would like to receive a Church Growth Fund loan application, you may either request one by calling the RCACGF loan officer (Pam Goslinga) at 888-722-4958 or send her your question by email: pgoslinga@rca.org.
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