Building Loan Program
Building Loan Application
(in PDF
format) (Please email fundraisingassistant@uua.org
to request the application be emailed to you as a Microsoft Word
attachment.)
Statement of Purpose
The primary purpose of the UUA Building Loan Program is to facilitate
the continued growth, in the broadest sense of the term, of member societies.
The program is designed to provide affordable financing for congregations
engaged in acquiring ownership of a building. The program will also
encourage congregations to expand or renovate their existing facilities
as well as to assist congregations in making their facilities more accessible
to persons with physical disabilities. The program is not designed to
support deferred maintenance and repair efforts.
This program is not intended to replace local financing options. Congregations
are encouraged to meet with local bankers and seek the most competitive
financing for their project. For guidance on how to negotiate with bankers,
the UUA has a publication titled "Financing Your Spiritual Home," which
is available on the UUA website. Follow the prompts
to Programs and Services and then scroll down to Congregational Fundraising
Services. The publication can also be obtained from the Office of Congregational
Fundraising Services at (617) 948-4251.
Money for the building loan program is always subject to availability.
Please contact the Office of Congregational Fundraising Services for
details about the current status of loan availability.
Loan Rate
Subject to fund availability, the UUA will make commitments for market
rate loans from $50,000 to $750,000. The rate will be set at the time
of closing and will be based on the 7-year Treasuries plus 2%.
Congregations are required to be Annual Program Fund Fair Share members
at the time of application and to remain Fair Share throughout the life
of the loan. Fair Share records will be reviewed annually. If a congregation
fails to pay its full Fair Share the loan rate will be increased by
2% during the following fiscal year. This is not to be viewed as a payment
in lieu of APF dues. The rate will drop back down by 2% in the fiscal
year following their return to Fair Share status.
Loan Fees
There will be a $250 application fee, payable at the time of submission.
The congregation will be charged $2,900 (plus dispersements) for the legal fees incurred
by the UUA as part of creating and recording the mortgage. The congregation
will also be charged one point at the time of closing.
Loan Amortization
1. Congregations seeking to build or buy their first spiritual home
will be offered a 25-year amortization period.
2. Congregations conducting a repair or renovation project that does
not involve substantial construction of the new space or making their
facility more accessible will be offered a 15-year amortization period.
3. Congregations constructing new facilities or expanding their current
facilities will be offered a 20-year amortization period.
4. The UUA Loan Program does not offer financing during the construction
period.
Lending Guidelines
1. Application: The congregation must submit an application that will
include a detailed membership growth plan describing its commitment
to and capacity for growth, in the broadest sense of the term.
2. Capital Campaign: The congregation must complete a capital campaign.
This special fund drive raises money for a capital project, and is in
addition to money raised to support the annual operating budget. Most
capital campaign pledges are payable over 2 to 5 years. A letter is
required from the congregation's governing body stating that the amount
pledged is equivalent to at least three times the congregational pledges
to the most recent annual canvass.
3. Debt Service: The congregation's debt service on all its debt must
not exceed 25% of its annual operating budget in the financial projections
of all future years.
4. Annual Program Fund Fair Share Status: The congregation must be
a Fair Share member of the Annual Program Fund and must agree to remain
so, for the life of its loan.
5. Lien Position: The loan shall be secured by a lien in the first
position (i.e. a first mortgage). This will not be subordinated to any
other lien holder except in extraordinary circumstances and only with
the approval of the Congregational Properties and Loan Commission.
6. Reversionary Agreement: The congregation must provide in its bylaws
or certificate of incorporation a clause that calls for reversion of
all its property to the UUA in the event that the congregation shall
cease to legally exist.
7. Congregational Vote: The congregation must vote to approve receipt
of a loan from the UUA.
8. Phase I Environmental Study: A Phase I Environmental Study will
be required if the congregation seeks to purchase a building or to build
a new building on land it already owns. A Phase II Environmental Study
will be required if the Phase I Study is unsuccessful. In addition,
the congregation is urged to become familiar with any real or looming
environmental hazards on its property (e.g. buried oil storage tanks,
lead paint, asbestos, etc.).
9. Insurance Coverage: The congregation must adopt the minimum recommended
limits of property and liability insurance coverage that is required
of all applicants. These limits are defined on the last page of the
loan application. Congregations are required to get two insurance quotes,
one of which must be from Church Mutual Insurance Company. Please contact
Church Mutual at (800) 554-2642.
10. Closing: Following approval of a loan, the congregation must close
within six months or submit a new application.
11. Late Charge: The congregation will be charged a late payment and
interest surcharge fee equal to 5% of the total overdue amount. Furthermore,
interest will continue to accrue at 4% over its mortgage rate, if the
payment is received more than 30 days after the due date.
The Application Process
Each loan application requires a certain amount of time to review and
process. This time may vary, depending upon a number of factors, but
usually ranges from 1 to 2 months. Congregations may need to wait an
additional period for funds to become available.
A congregation may facilitate this process by taking the following
steps:
1. Complete all parts of the application form. The Administrator
of Congregational Fundraising Services is available to assist
you if you have any questions and he can be reached at (617) 948-4251
or at fundraisingassistant@uua.org
.
2. Include a copy of the congregation's by-laws or certificate of incorporation
with the application.
3. Use the Cash Flow Projection template (located on page 4 of the
application) to list all financial projections. These projections cannot
be accepted in any other format.
4. Indicate specific plans for an intentional, sustained program of
growth.
Steps in the Review Process
1. The completed loan application is received by the Congregational
Fundraising Services Administrator and reviewed for completeness. The
congregation is contacted if any information is missing or if further
documentation is needed.
2. The application is sent to the Director of Congregational Fundraising
Services. The application is evaluated using the lending guidelines.
The congregation is contacted if further information is needed. The
Director of Congregational Fundraising Services makes a recommendation
to the UUA Treasurer.
3. The Treasurer reviews the application and the recommendation of
the Director of Congregational Fundraising Services. The Treasurer,
in cooperation with the Director of Congregational Fundraising Services,
makes a decision for action. The decision may be to approve, approve
with contingencies, or decline the application.
4. The congregation is informed of the decision.
5. If approved, the application, including the name of the congregation's
attorney, is forwarded to the UUA attorney who then contacts the congregation's
attorney to work out the final legal documentation.
Reversionary Clause
Sample language for a reversionary clause:
"In the event of the dissolution of the congregation [or society/church/fellowship]
all outstanding debts shall be paid. The remaining assets, both real
and personal, and including all property heretofore and hereinafter
donated to said church, shall become the property of the Unitarian Universalist
Association, 25 Beacon Street, Boston, Massachusetts, or its successor,
subject to all applicable laws."
With the prior written approval of the UUA Board of Trustees, the congregation
has the option of naming a UUA affiliate organization (such as a district,
camp, conference center, or other congregation) as the recipient of
the congregation's assets.
The Unitarian Universalist Veatch Program at Shelter
Rock
The UUA Building Loan Program is made possible in part as a result of
generous grants from the Unitarian Universalist Veatch Program at Shelter
Rock and gifts from individual donors. The Veatch Program promotes the
growth of Unitarian Universalist congregations through its support of
this UUA program. Please join us in expressing gratitude for their commitment
and generosity. Please acknowledge them wherever appropriate in all printed
materials.
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