Loans are made from the Brotherhood Loan Fund to credentialed Brethren in Christ U.S. pastors for the purchase, construction, remodeling, or expansion of their primary residence.
The Lending Process
Prior to completing an application, we recommend contacting the Foundation’s loan officer to discuss your plans. The loan officer will discuss the Foundation’s lending process with you and will also be able to answer any questions you may have prior to applying.
If you choose to apply, you should complete and submit an application and family budget. It is important to note that the combination of equity and down payment must total at least 5% of appraised value. Additionally, payments toward mortgages, taxes, and homeowner’s insurance should not exceed 35% of your take-home pay.
A qualified appraisal is usually required to support the purchase price, construction, or remodeling costs of the proposed project.
The Foundation staff will review all of these documents, as well as any other requested information that may be necessary to determine eligibility. If the staff recommends approval, the loan application is then sent to the Foundation’s loan committee for final consideration.
Rates and Fees
The Foundation, unlike most banking institutions, does not charge any fees or points at closing. There are also no fees charged nor a premium interest rate used during the construction phase of a project.
Our interest rate is variable, and the Foundation may adjust rates up or down at the beginning of any month. A 30-day written notice of the change is required prior to the effective date. Increases or decreases in interest rates may not be made retroactively.
Rates for both our loans and the investments that fund those loans are variable in order to react to changes in economic conditions. The intention of the Foundation is to keep loan rates and investment rates as stable as possible.
The Foundation prepares the promissory note and the mortgage documents (also known as a deed of trust in some states) and sends them to the closing agent.
The applicant is responsible for all costs incurred, including but not necessarily limited to an appraisal, title insurance, mortgage recording, and any other legal expenses associated with the closing.
When your loan closes, an amortization schedule, if desired, is provided showing the principal and interest due monthly. Payments begin the month following closing and are taken automatically by Automated Clearing House (ACH) from your account on the last business day of each month.
If there is a construction phase, interest is billed monthly on the amount of the total draws to date and is taken from your account by ACH. Once construction is complete or the loan funds have been fully disbursed, the loan is amortized and automatic payments of principal and interest begin the following month and are taken on the last business day.
Additional principal payments may be made at any time by check or by ACH at the request of you, the borrower.