Loan Qualifications:

  1. The congregation must be incorporated by the State in which it is located and a member of the Southern District of the Lutheran Church-Missouri Synod
  2. While not an absolute condition of a CEF loan, earmarked or supporting investments from congregation members in the Church Extension Fund are expected to reach   20% of the approved loan amount. Such investments ARE NOT held for security.
  3. All building fund dollars must be invested in a CEF account until such times as they are needed to fund the project.
  4. The following information is considered in reviewing loan requests:
    • A three-year review and a projection of parish activity, including membership and financial statistics
    • Indebtedness upon completion of the building project should not exceed up to the average worship attendance times   $4,000 (considering your area’s median wage)
    • The total long-term indebtedness should not exceed 2 1/2 times the total annual member-giving for all purposes
    • The total debt service payments (principal and interest) should not exceed 25% of the congregation’s annual budget(less day school expenses)
    • The percentage of project cost supported by building fund contributions and pledges should not exceed a three-year period (minimum of 25% suggested)

Application Procedures:

  1. All sections of the application must be completed. Incomplete applications may be returned for further information, delaying the approval process
  2. The following additional information must accompany the application:
    • Complete financial reports including all fund balances for the last three years, plus current budget, and most recent year-to-date financial report
    • A set of plans and specifications (preliminaries or working drawings) certified by a registered architect or licensed engineer of the State of Louisiana, Florida, Mississippi or Alabama
    • Certified copy of the borrowing resolution if available. Borrowing resolution will be required prior to closing (use form attached to application)                                To top of page

Conditions Required To Close Loan:

  1. Mortgage and Note, executed by authorized representatives of the congregation
  2. ALTA form of mortgagor’s title insurance policy in the amount of the loan
  3. A survey of the property to be mortgaged – a new mortgage inspection survey may be required
  4. Fire and extended coverage insurance policy with loss payable clause to Southern District Church Extension Fund
  5. Articles of Incorporation, Constitution, By-laws, and Resolution to Borrow and to Execute Note and Mortgage
    Additional Requirements for Construction Loans
  6. Performance Bond and Labor & Material Payment Bond for the general contractor in the amount of the contract. Bond  requirement may be waived under special circumstances, and at the discretion of Church Extension, if project is less than $500,000
  7. Copies of all signed construction contracts with firm pricing (bids) and fixed completion dates.
  8. Builders Risk Insurance with loss payable clause to “Southern District Church Extension Fund”

Fees/Costs:

All costs arising from the closing of the loan shall be paid by the congregation, including attorney fees if needed, title insurance policy premiums, recording fees, and survey fees if required.

Ministry Statement or Plan

Enclose a copy of your congregation’s Mission Statement and provide below a narrative statement that describes:

  1. Current programs that give evidence of carrying out your congregation’s Mission Statement
  2. Future ministry plans for outreach
  3. Ministry goals/objectives and how will they be measured
  4. Results/outcomes anticipated or made possible by this loan                                        To top of page

Borrowing Resolution

This resolution must be completed by the Voters Assembly, Church Council, or Board of Directors at a regular or special meeting as authorized by the congregations constitution. (see forms tab for format).