BEB Policies

PURPOSE

 To assist any group of missionary Baptists in Virginia or any congregation of a church (Borrower) cooperating with the Baptist General Association of Virginia needing help in erecting, preparing, improving or otherwise acquiring and maintaining suitable sites and buildings to be used exclusively for benevolent, educational and religious purposes.

To lend any part of all of its funds to Borrowers and to receive in evidence of such loans any notes, bonds, or other obligations of debt, payment of which may be secured in such manner as the Extension Board may determine.

 

QUALIFYING

It is the mission of the Extension Board to assist any group of missionary Baptists in Virginia or any congregation of a church cooperating with the Baptist General Association of Virginia in site preparation, construction, acquisition, and/or renovation of church facilities.  It is the Extension Board’s intent to use its resources primarily to assist those congregations that are unable to obtain financing at reasonable market rates and terms.  However, because of limited resources, the Extension Board may be unable to be a primary lender.  Then the Extension Board’s mission becomes one of assisting those churches that are unable to otherwise obtain the required financing through traditional commercial sources with an appropriate rate and terms.  In such cases the Extension Board, in its discretion, may accept a second mortgage in order to encourage commercial lenders to make the primary first mortgage loan.

All churches that apply for loans shall be active supporters of the Baptist General Association of Virginia’s missions and work and must be a Participating Church contributing financially to the Virginia portion of the Cooperative Missions budget as defined in the BGAV Constitution Article III, Section C: “A church shall be deemed to have contributed financially when it has given either (a) at least $500, or (b) at least two percent (2%) of its total annual receipts, during the previous fiscal year to the Virginia portion of the Cooperative Missions Budget. First and second mortgage loans may be made and secured and documented in such a manner as the Extension Board may deem necessary.

In the event that a church later withdraws from the General Association, any loan balance shall be due immediately and in full at the time of withdrawal.  This wording will be included in both the deed of trust and the note.

 

APPLICATION PROCESS

Loan applicants must complete a loan application provided by the Baptist Extension Board.  Such application must be signed by the trustees who have been authorized to do so by the group, church, or association in business meeting or by its directors.   The Extension Board’s loan application will require accompanying information to assist Extension Board members in making a proper decision in their stewardship of Extension Board funds.  This information may include current and past financial reports, membership totals and additions, and a general description of the project and the use of the funds.

The Baptist Extension Board meets regularly at least during the first and second quarters each year.  The deadline for first quarter loan applications is February 1 and the deadline for second quarter loan applications is June 1.  If the Baptist Extension Board meets in the third quarter, the deadline for third quarter loan applications is September 1.

The Extension Board is open to receive applications at any time, and called meetings of the Executive Committee of the Extension Board may be held when loan requests cannot be deferred until one of the regularly scheduled meetings.

To expedite the granting of loan modifications to qualifying Borrowers, and to avoid unnecessary called Executive Committee meetings, the Treasurer is authorized to evaluate modification requests and recommend to the Executive Committee the approval of those loan modifications which meet all the criteria for granting such loan modifications.  Further, the Treasurer is authorized to submit recommendations electronically to the Executive Committee for approval of such loan modifications via electronic vote.

Between the times a loan application is submitted and an Extension Board meeting is held several activities should take place:

  1. One or more members of the Extension Board may initiate a personal consultation with the applicant.
  2. Churches applying for loans on church buildings are encouraged to submit their plans to the church building and site consultant of the Extension Board for recommendations.Group or church officers and/or leaders should be present when the Extension Board considers its loan application.  Leaders who have knowledge of church buildings and properties, the construction industry, or finance are very helpful.  Once a loan request has been approved by the Extension Board, the loan commitment expires after twelve months if the loan is not activated or not extended by the Extension Board.

 

INTEREST RATE

The interest rate(s) for loans is set by the Extension Board at each regularly scheduled meeting and remains in effect until the next regularly scheduled meeting.  Normally, the loan rate is established by averaging the 30-year home mortgage rate for the Northeast during January and June and then subtracting one-half percent, rounding up to the nearest one-quarter percent.  It is the intention of the Extension Board to offer loans below the market rate.

TERMS

Normally, the maximum amount that will be loaned to a group or church for a specific project is $500,000.00 (five hundred thousand dollars).  A group or church may have more than one loan, and, normally, the outstanding balance(s), in the aggregate, shall not exceed $500,000.00 (five hundred thousand dollars).  The normal maximum term for a loan for a group or church is fifteen (15) years.  A group or church may be granted up to three (3) years of “interest only” payments.

Repayments are to be made on a monthly basis beginning the month following the first disbursement of the loan.  There is no penalty for early payments; in fact, early payment is encouraged.  If disbursement is made mid-month, the interest will be prorated for the portion of the month that the Borrower has the loan funds.

For all deed of trust loans, Borrowers must provide evidence of an acceptable hazard insurance policy with the Baptist Extension Board, Inc., listed as a loss payee.  The Extension Board will require satisfactory evidence of good and marketable title, which usually will require the Borrower to furnish an acceptable mortgage policy of title insurance.

DOCUMENTS

Notes, Deeds of Trust, and other documents required by the Extension Board shall be on forms prepared by or approved by the Extension Board.  Between meetings of the Board, the Executive Committee is authorized to approve the form of documents.

 

DELINQUENCIES

Any loan thirty (30) days or more in arrears will be considered late.  Any loan ninety (90) days or more in arrears will be considered delinquent.  Telephone contact with the church’s pastor and treasurer or other Borrower’s representative(s) will be made by the Extension Board or designee after ninety (90) days to determine the reason(s) for delinquency and to inquire about how the situation might be resolved.

Borrowers that face continued stress in making loan payments can apply for a temporary reduction in the original interest rate to a current, lower interest rate.  All interest in arrears at the time of reduction continues to be payable and terms may be arranged for the repayment of back interest (including at the conclusion of the loan).  Such reductions in interest rate are subject to periodic review by the Extension Board.

Leslie Straw : [staff-title] Leslie Straw
Team Leader, Support Ministries; Baptist Extension Board
800.255.2428 or 804.915.500, ext. 1296
leslie.straw@bgav.org
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