Borrowing From the Loan Fund

The Michigan Area Loan Fund provides Mortgage Loans and Promissory Notes to Michigan area United Methodist churches and Institutions at competitive rates. First Mortgage loans are available up to $1,500,000. and Promissory Notes are available for up to $100,000.

First Mortgage Loans

Require title insurance and warranty deed
Up to $ 1,500,000.00 as funds are available
All Mortgages are five year mortgages
Mortgages can be amoritized over ten or fifteen years
Large Loans over a million dollars may be amortized over twenty years
Current rate – 5.49%

Promissory Note Loan

Signature loan
up to $100,000.00
up to 90 months
current rate – 6.00%

Loan applications are approved by the Board of Trustees of the Fund. Approval is normally completed in ten working days after the receipt of a completed loan application and fee.

For the ten-year, fifteen-year and twenty-year amortized mortgage loans, at the end of each five year period the remaining principal balance is due or a loan application for the remaining principal balance is to be submitted by the church to the Board of Trustees of the Fund for consideration. Approval is not automatic.

Qualifying For A Loan

Successful loan application share these common factors:

There is a great variety in the projects and financial needs of borrowers. The loans issued by the MALF are high quality loans. Generally, the project has been reviewed and approved by the Pastor, the church Administrative Board, the District Superintendent, a church Charge Conference and the District Board on Church Location and Building. For large projects, there often is an architect and general contractor, and sometimes, a fund raising consultant.
For most loans, the borrower will demonstrate a history of planning the project and accumulating resources in anticipation of actual construction. Also, there is usually a current pledge program in process, which will support loan payments for the first three to five years.
In addition to the connectional approvals discussed above and an existing building fund, the church is generally required to have a minimum of 25% of the project cash in hand or prepaid expense, such as land preparation, architect fees, permits and the like. In addition, apportionments should be paid up-to-date, as well as current operating expense.
That being said, there are situations, which arise without planning and preparation. Such projects as heating plant repair, roof repair, unexpected availability of adjacent property, and handicap projects are some examples. The Fund is positioned to handle such loans on a case-by-case basis.
Other items helpful to considering the loan application are the growth history of the church, description of the church neighborhood and situation, and the current make-up of the congregation.
It is also valuable to have a single knowledgeable individual who is directing the project and maintaining liaisons between the builder, the Fund and the other functions associated with the project.
The church projects and loan applications which are usually most successful have a pattern of planning and preparation for the project and of strong lay leadership.

Getting Started

A commitment fee is required and will be refunded at the time of closing. To determine eligibility for a MALF First Mortgage Loan or Promissory Notes, we recommend that you first contact Denny Buwalda, Loan Officer, at (517)242-3777 or by using our online contact form.

Application Forms

First Mortgage Loan Application Form. This new form can be filled in on your computer and printed for mailing.

Promissory Note Application Form