Loan Guarantee Program
Loan Guarantee 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 Loan Guarantee Program is to facilitate
the continued growth, in the broadest sense of the term, of member societies.
The program is designed to encourage congregations engaged in acquiring
ownership of a piece of land and/or building. The program will also
encourage congregations to expand or renovate their existing facilities.
And finally, the program will assist congregations in making their facilities
more accessible to persons with physical disabilities. The loan guarantee
program is not designed to support deferred maintenance and repair efforts.
Loan Guarantee Guidelines
The UUA Loan Guarantee Program is designed to encourage local lenders
to make available larger mortgage loans by the participation of the
Unitarian Universalist Association as a guarantor of a portion of the
loan. Loan guarantees are available to individual congregations under
the following guidelines:
- The standard guarantee liability is 50% of the original amount
of the loan, up to a maximum guarantee of $375,000.
- The minimum loan on which a guarantee will be approved is $50,000.
- The guarantee will cease to be in effect once the unpaid principal
amount falls below 50% of the original amount of the loan or ten years
after the date of the loan, whichever comes first.
- There will be a $250 application fee plus a one-time fee of $700 (plus dispersements)
for the loan guarantee. There will be no additional costs throughout
the time the guarantee is in effect.
- The $250 application fee is due when the application is submitted.
The $700 fee (plus dispersements) will be payable upon approval.
- If a congregation finds it feasible to refinance their mortgage
in the future, the loan guarantee will be transferable to the new
loan, providing the loan amount is not increased and the congregation
has continued to contribute to the Annual Program Fund at the Fair
Share level.
Additional Requirements
Application: The congregation must submit a loan guarantee
application which will include a detailed membership growth plan describing
its commitment to and capacity for growth, in the broadest sense of
the term.
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.
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.
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.
Lien Position: The congregation's 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.
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.
Congregational Vote: The congregation must vote to approve receipt
of a UUA loan guarantee.
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.).
Insurance Coverage: The congregation must adopt the minimum
recommended limits of property and liability insurance coverage required
of all applicants. These limits are defined on the last page of the
loan guarantee application.
The Application Process
Each loan guarantee 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. A congregation may facilitate
this process by taking the following steps: Complete all parts of the application form. The Administrator of Congregational
Fundraising Services is available if you
have any questions and he can be reached at (617) 948-4251 or
at fundraisingassistant@uua.org
.
Include a copy of the congregation's by-laws or certificate of incorporation
with the application.
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.
Indicate specific plans for an intentional, sustained program of growth.
Include a copy of the mortgage commitment letter.
Steps in the Review Process
The Administrator of Congregational Fundraising Services receives the
completed loan guarantee application. The application is checked for
completeness and each section is reviewed for accuracy and consistency.
The congregation is contacted if any information is missing or if further
documentation is needed.
The application is sent to the Director of Congregational Fundraising
Services. The application is evaluated using the loan guarantee requirements.
The congregation is contacted if further information is needed. The
Director of Fundraising Services then makes a recommendation to the
UUA Treasurer.
The application and recommendation is sent to the Office of the UUA
Treasurer who reviews the application and considers 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.
The Administrator of Congregational Fundraising Services is notified
of the application decision and the congregation is contacted.
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 congregation, 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.
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