Church Loans - Private Lending for Religious Properties

Church Loans

Church loans + private money – a match made in heaven.

The limitations of traditional real estate finance are not just imposed on fix and flips and commercial bridge finance. Houses of religion can also face capital challenges that we are ready to solve.

Church Loans - Terms and Qualifications

At HM Capital, we treat places of worship as valid collateral. We love working with religious organization and happy to hear how we can assist you in overcoming your credit challenges. To qualify for a loan against a church, here is what we’ll need:

  • Recent bank statements
  • 501c3 non-profit statement of good standing
  • Current pictures of the property
  • Financial statements
Our terms and rates will depend on risk levels, income, and location of the property. Here are our general guidelines for church loans:
  • Minimum loan amount $100,000
  • Preferably suburban/urban locations
  • Collateral accepted – only real estate
  • LTV – up to 75% (will make exceptions for the right deal)
  • Rate – starting at 5%
  • Origination – 3-6 points

Church Loans for purchase vs. Refinance

Our experts can help you secure funding for a new church location, an expansion of an existing congregation, adding a new building to an existing structure, or refinance your current mortgage. Under all scenarios – we underwrite the asset first and foremost. The property offered as collateral is the most important part of the qualification process. Churches in excellent locations are more likely to get approved that properties in rural locations.

For refinances of existing loans – our unique program can save you multiple points of interest, depending on what kind of loan you have currently. Churches are tax-exempt organizations so naturally there is a large portion of ‘expenses’ that does not exist, but most of the time churches are not natural businesses where income is steady and driven by profits. This makes the underwriting process both unique and perfect for hard money lenders.

Real estate is expensive – in almost anywhere you look. Then why should churches spend large amounts of money to own the land and building when they can simply rent? 

The answer is simple – churches are forced to close and move out all time, more than you’d think. Tenants can be evicted – and churches have no special exceptions in the law that protects them from eviction. Speculators can decide to develop the property and not renew your lease agreement.

In short – the advantage in owning the land that you worship is the confidence that your congregation control the destiny of the church – not your landlord. There will be no one that tells you to leave, or raise the rent so high that you’ll now have to break the bank in order to stay.

Here are some tips to make sure you will get approved for the best rate when you apply:

Air-tight Financials and Budget

Work with your accountant to make sure your books show all expenses and income from donations – and that they match what your report in the application. Things to note – how high are your expenses? Are there large, unexplained balances?

Asset-to-debt ratio

We’ll likely to ask you about any outstanding debt you might have aside from a current mortgage – like unpaid invoices. Any substantial assets – like heavy equipment or cars could be considered an asset.



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