Mortgage financing for churches and other religious institutions is big business. According to a 2006 Lambert a course in miracles youtube channel, refinances, purchases and construction financing in the church-lending market will reach $40 billion annually by 2010.
Despite this, the church-lending business is extremely fragmented. Because national lenders’ underwriting criteria are rigid, local or regional banks often handle church loans. But banks are reluctant lenders at best. They generally don’t have staff trained to underwrite church loans, and they are understandably concerned with headline risk – it’s bad press to foreclose upon a local religious organization.
Thus, nontraditional, private-money lenders are a rapidly growing force in church financing. Understanding who they are and what they are looking for is the key to establishing yourself as a successful broker in this niche.
Finding the loans
Networking is the key to finding church-lending opportunities. Whether or not you are affiliated with religious institutions, you may have more access to them than you realize. In addition to the clergy, most churches have volunteer board members who also are professional service-providers. Here are some of the primary referral sources for church-loan requests.
- Certified public accountants
- Insurance agents
- Local banks
Get the word out that you arrange financing for religious institutions. You’ll be surprised how many of your neighbors, friends and others know a church needing to upgrade its facility or refinance a loan. Most churches are at a loss as to where to turn for financial help, so make sure your market knows about you – and how you can help.
Working with the ministry
Real estate is a relationship business. This is especially true when working with religious institutions.
Most often, church leaders focus on serving their congregation and their community – not on operating a business. Your primary client may be the lead clergy, professional staff member or volunteer board member. Regardless of your primary point of contact, you must view your role as an important adviser to the ministry and not just as a mortgage broker.
Be prepared to explain complex loan terms and their implications to people who have no financial or real estate backgrounds. Decision making often is much slower than with individual property-owners, and final decisions may be made by a governing board that meets infrequently.