Foundation Capital Resources

What types of loans are available?

Foundation Capital Resources offers a complete range of financing tools including permanent first mortgage loans (refinance, purchase, improvements), construction draw first mortgage loans (improvement/construction loan with guaranteed take-out to permanent), capital commitment/bridge loans and new church plant loans.

How long does it take to obtain a loan?

From the time a completed application and all supporting documentation are received, a loan can generally be approved within 10 to 20 business days, and funded within 30 to 45 days. This time frame can vary based upon committee schedules and how quickly the escrow company completes its work. The key is to provide all requested documentation with your loan application, and stay in touch with the escrow company to make sure that its work is progressing on schedule.

Is it possible to add to an already existing loan?

Generally, yes, but approval will depend on several factors including, most importantly, current loan rates and whether the loan documentation includes a Future Advances clause. Generally, an origination fee is charged and the interest rate will change on the entire loan. You do, however, save some costs.

What are financial ratios?

When evaluating a loan application, Foundation Capital Resources looks at a variety of factors including two key financial ratios. These ratios are designed to provide an accurate picture of the church’s ability to service its loan. The first and most important ratio is the debt service ratio. The annual debt service (all monthly payments x 12) is divided by the church’s annual operating income (regular tithes and offerings only, NOT designated income like missions, departmental, etc.). The second ratio is the collateral ratio, also known as loan to value (LTV), which is calculated by dividing the amount of the loan by the value of all buildings and land. 

Can we pay off our loan early?

Certainly, and we encourage churches to use stewardship campaigns to do so.

Are there any other costs?

All churches are charged a non-refundable application fee of $300. A loan origination fee equal to 1.0% of the total loan amount is charged when the loan is closed. Finally, all loans are closed through an escrow company and will require title insurance, etc. You are responsible for the costs for these items as well as miscellaneous recording fees, etc. 

What happens if I miss a monthly payment?

Delinquent Loan Notices are mailed on any account delinquent 30 days or more, with copy to co-maker (if any). A delinquency letter is sent on any account over 90 days delinquent. A late charge equal to 5% of the monthly payment will be assessed for payments not received within 30 days of due date.

Can we obtain a loan to purchase raw land? 

Foundation Capital Resources policy requires a first mortgage on buildings. So, if there are no buildings, we generally cannot approve a loan. If, however, a church already owns a building and is purchasing land for future expansion, a loan for raw land may be approved, provided that financial ratios are acceptable. 

What are your current interest rates?

Foundation Capital Resources is committed to offering competitive loan rates and flexible terms. Interest rates vary based upon loan terms and underwriting results. Please call us for a current rate quote. 

Do you offer a fixed rate loan?

No, they are difficult to find in today’s marketplace. Foundation Capital Resources offers a range of options in which the interest rate is fixed for quarterly, 1, 3, 5, and 7 year terms.  We have found that the average life of a church mortgage is only 7 years, thus the adjustable terms are a better option for this market.

At the interest rate review, do we have to “refinance” and pay all the fees again?

No. This is a distinct difference between loans with Foundation Capital Resources and many other commercial lenders. If you are shopping, be sure to read the fine print.

Can we obtain a loan with a payment schedule shorter than 20 years? 

Yes. Normally the loan documentation will still be prepared with a 20-year payment schedule, but you will be given a payment schedule to fit the shorter number of years that are requested. This way, payments can be easily lowered by stretching out to a longer term if necessary.

Can we obtain a loan for longer than 20 years?

Yes. Terms can be as long as 30 years.

Our church does not have much experience with construction projects. Can Foundation Capital Resources offer any assistance?

Yes. Thorough our Partners in Construction (PiC) program, Foundation Capital Resources can provide professional consultation in the planning, design, construction and funding of new or remodeled church facilities. In summary, this innovative program can assist churches in better estimating and managing construction costs and even provides on-site review and monitoring of the project from design through completion and occupancy.

How are construction loans handled?

With a construction loan, the total loan amount is approved at closing and all the documentation is prepared and signed at closing. The church can then borrow as much as is needed during the construction phase by requesting draws from our office.  At the end of each month, the church is billed only for the interest on the amount that has been drawn to date.  In some instances, it may be necessary for our Construction Consultant to periodically visit the site, to determine and advise if the project is on budget, and to keep abreast of the progress.  When construction is completed, the construction loan is converted to a permanent loan with regular monthly payments.

What kind of extra documentation is required for a construction loan?

Necessary information includes a completed Schedule of Values form (firm cost estimate with specific line items for cost overruns and contingencies), architectural drawings, a floor plan with elevations, and other documentation as requested.

What if additional funds are needed to complete subsequent building phases?

Foundation Capital Resources will be glad to assist with the next project, provided that all qualifications are met.

Will we have to refinance at that point and pay fees again?

If your next phase of construction begins within 12 months, no fee is charged on any refinance. You will have to pay fees only on the new money borrowed (plus escrow, title insurance, etc.).

Can we just take out a second loan?

That would depend on the specific situation, but a second loan may be possible as long as Foundation Capital Resources holds a first mortgage on the property.

How soon can we close?

The money is available upon approval by the committee, so it depends on how quickly the title agency can complete the necessary paperwork.

Title insurance costs so much. Do we have to obtain it?

Yes, title insurance is a great value, because it not only protects the lender but also safeguards the church from individuals who may attempt to place encumbrances on its property.