Loan Policy

We members of the Investment Fund Committee serve two constituencies in the Diocese: 1) The Diocese, congregations and diocesan entities that invest their funds in the Investment Fund, and 2) Congregations and diocesan entities which want to borrow from the Investment Fund to make capital improvements. We have also made three loans to clergy.

Our obligation to the first group is to make sure the investment portfolio is diversified so that risk is not concentrated in a few investments. Funding loans for capital improvements supports our Diocesan Vision, which says in part, “Healthy congregations will be well-organized, well-administered, adequately resourced, and appropriately housed.”

We on the Investment Fund Committee are concerned that because loans are becoming an increasing portion of the total portfolio, a policy is needed. Therefore in June 2012 we agreed to the following guidelines:

• Loans may be as much as $1 million provided they finance construction for new congregations. For example, such a large loan would be possible for a mission currently in rented space desiring to build a new facility. Loans of this magnitude would be secured by a first deed of trust.

• Smaller loans are available for additions and renovations to existing plant. We prefer first deeds, but we may accept second mortgages in this category.

• We may approve new loans to existing borrowers, those who have a current loan and an excellent payment record, and wish to take on a new project.

• We will not consider loans to congregations and diocesan entities which have an existing loan elsewhere, and want to borrow from the Investment Fund instead, in order to get a lower rate.

• We will now require that a potential borrower invest its reserve funds with the Investment Fund, provided of course that it has reserve funds.

• Of course all the past criteria still apply. We will lend to financially healthy congregations and those with a history of paying their debts on time. We will only consider projects funded by not only the loan but also existing reserves and pledges.

© 2013 The Episcopal Diocese of Northern California.

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