Once both you and your lender have gathered the information and documentation you need (see the Church Loan Pre-Flight Checklist), the application process will begin. Your lender will guide you through the process and verify that all the required items are accounted for so that your application can be submitted to underwriting for approval.
Gathering the information is often the most difficult task of the process, as there will be frequent clarifications, searches, and communication. This process can take anywhere from 2 to 6 months and lapses in the frequency of communication are common-place. Do not hesitate to proactively contact your lender for updates. However, constantly asking for status reports will most likely not make the process go any faster. A better way to communicate is to ask when you should be expecting your next call/appointment. If a day or two passes from your expectation, it’s more than reasonable to ask for an update.
Once approved, you will receive a letter detailing your loan amount, terms, and conditions. Once you sign and accept this letter your loan will be scheduled for closing.
Be advised, if your lender identifies “all” your income as a potential debt repayment source, they will most likely consider your financial commitments to ministries and missions a secondary priority. However, a reputable lender will discuss your wholistic financial picture to determine how much you should borrow, not just how much you can borrow. After all, you don’t just need a loan, you need an entire financial strategy. A solid strategy will include a capital campaign to help fund the project, seek to reduce the loan, and involve your congregation in the process.