Lease/Purchase Financial Solutions

Churches with a vision of moving out of temporary facilities and moving to their own building.

Churches with land and/or cash to put in the project (minimum10%)

Growing Churches needing wisdom as to how to accommodate their growth and expanding ministry.

Churches seeking a building but do not qualify for traditional financing.

Program Overview

The program is a turnkey, build to suit program, in which Church Development Services (CDS) will build a new church building at their cost and risk.

This program is designed for churches with 25 families that are renting space from another church, meeting in a hotel, storefront/warehouse, or school, and need to get into their own building, where they can grow and have more effective ministries.

Many of these ministries have a need to relocate, but are unable to secure the loan they need. Even though they could make the mortgage payment, traditional lenders often consider them too small or too new of a ministry to provide them financing.

Church Development Services will obtain the necessary funding and build the church based on the needs and financial ability. Once the church building is complete, the church will move into it under a lease agreement with an option to purchase at today’s price any time within 3 years.

CDS anticipates the church will only need to lease for 12 to 18 months; until such time as they can finance the purchase with a regular loan.

How It Works

Church facilities will be built using funds provided by:

1. 10% minimum cash and/or land value by church
2. 90% loan obtained by CDS

 

Church Development Services will take the risk and responsibility for building the church facility. The church invests 10% of the project cost. This payment applies to the purchase price at the time of the buyout. The purchase price is set at the beginning of the project.

When the building is complete, the church will lease the facility from CDS until such time as the church can procure conventional financing (up to three years).

The purpose of the lease is threefold:

1. To demonstrate to the bank that the church can make a mortgage payment.
2. To get the church into a building now, rather than later, to grow their ministry.
3. To allow the church to lock the price in at today’s appraised value and take up to 3 years to buy the building.

 

The Process

Inquiry:

It all begins with an inquiry from the church.

Pre-Qualification:

The screening process will entail reviewing several factors including attendance and current financial information. The church will complete a preliminary survey. CDS will review the information collected and provide a preliminary opinion, typically in two to three working days.

Meeting:

For the churches that appear to meet minimum prequalification criteria, a meeting will be arranged for the church to meet with staff to better understand the program and for the church to ask any questions.

Letter of Intent and Engagement:

In the meeting between church and Church Development Services the church will also receive a copy of a letter of intent. Should the church desire to proceed forward with the program, they will indicate that intent in an engagement letter to CDS. There is no money due from the church at this time.

Due Diligence:

1. Insure the viability of the project, both tactically and financially.
2. Determine the scope and budget for the project.
3. Design a solution and balances church needs and wants against financial ability.
4. Determine lease amount and purchase amount.
5. Present final lease/purchase agreement to church.

Commitment Letter:

At the conclusion of the due diligence, CDS will present the church with a commitment letter detailing the size and layout of the building, monthly lease payments, and buyout price. At the execution of the commitment letter a significant portion of the 10% equity will need to be made along with mutually agreed upon payment plan to invest the remaining 10% before the commencement of construction.

Lease/Purchase Agreement:

When all the paperwork is in order the church will execute a lease purchase agreement and commit their equity to the project.

Move In:

Upon receipt of certificate of occupancy, the church will take immediate possession of their new facilities and begin paying monthly lease payments until such time as they can produce their financing

Cost:

Pre-Qualification Application Fee - $250

Meeting: Cost of travel or you may travel to our office