Top 4 Tips for Getting a Church Building Loan

Building projects are often a thrilling endeavor for churches, representing growth and the promise of a future where the congregation can thrive and reach their community in a new or renovated space. However, the financial reality of these projects typically requires securing a church building loan to cover the substantial costs. 

While dreaming about the new possibilities is exciting for pastors and church leaders, the preparation for obtaining a church building loan is a meticulous and sometimes lengthy process. 

We sat down with David Lee, from Thrivent Church Financing, and discussed valuable insights into the steps churches can take to increase their chances of securing a loan when needed.

(BTW – this process is basically the same when refinancing existing loans.)

1. Preparing for a Church Building Loan

Proactive Financial Management

To position your church as a viable candidate for a building loan, proactive financial management is crucial. This means getting your financial house in order well before you need the loan. According to Lee, reputable lenders heavily analyze the church’s leadership and governance. Independence, accountability, and transparency are critical. A governance structure where the entire board is related or composed of paid staff members can raise red flags for lenders.

Behaving Like a Borrower

Churches often operate on a budget where every dollar is spent as it comes in, but this isn’t conducive to borrowing, and can be cause for concern to lenders. Preparing for a loan requires time and intentionality in saving money and planning for future expenses. Engaging with a lender well in advance—ideally 18 months before a loan is needed for general purposes, 2 years for construction projects, and 12 months for refinancing—can help your church get ready. Lenders want to understand the church’s vision and how it plans to achieve its goals.

2. Determining How Much to Borrow

Factors to Consider

While the ideal scenario would be to have no debt, the reality is that most churches need to borrow. When determining how much your church building loan should be, consider the following:

Leverage (Debt to Income): Multiply your unrestricted tithes and offerings by three to gauge a safe borrowing limit.

Loan to Value: Aim for a down payment that covers around 25-35% of the appraised property value.

Cash Flow: Ensure your church can manage the monthly mortgage payments without compromising ministry expenses.

3. Demonstrating Financial Stewardship

Managing Expenses

When it comes to a church building loan, lenders look for churches that manage their expenses well. Since expenses are within the church’s control, demonstrating the ability to cash flow the loan is essential. Providing three years of fiscal statements and year-over-year comparisons shows consistency and reliability in financial management. The most recent fiscal year should reflect the church’s ability to cover the anticipated debt.

4. Avoiding Common Mistakes

Construction Projects

One of the biggest mistakes churches make is spending money on construction before understanding what they can afford. It’s vital to determine the borrowing capacity before making any significant financial commitments. Starting construction projects before you finalize your loan  can lead to complications, such as title issues, that make it harder for lenders to navigate mid-project.

Choosing the Right Lender for Churches

Scripture cautions that borrowing can lead to servitude to the lender, making it imperative to choose a trustworthy lender. Thrivent, for example, emphasizes community involvement and generosity, aligning their values with those of many churches.

Current Lending Environment

Not surprisingly, the lending landscape for churches is subject to macroeconomic factors and volatility. Interest rates fluctuate, making it essential to base decisions on current information while also considering the potential impact of the changes in the future. You don’t want to plan for just the best case scenario, or assume things will get better in 6 months.


Securing a church building loan involves careful preparation, financial stewardship, and choosing the right partners. By taking proactive steps and demonstrating solid financial management, your church can successfully fund your vision and build for the future. We highly recommend watching our conversation with David Lee

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