NIC Foundation launches new savings/loan fund

By Lynne DeMichele
Editor, Hoosier United Methodist News

A first for Indiana, the North Indiana Annual Conference Foundation is launching a new loan fund.

The fund, approved Dec. 10 by the Indiana Securities Dept., will have non-profit status and a limited market. Loans will be made only to United Methodist Churches and for capital improvements.

On savings side, the offering will be open to individual United Methodist members and family, along with "affiliated" members, including the churches, themselves and their staff.

According to the Foundation's Director of Development Phil Ford, two options are offered: Savings accounts are paying an introductory rate of 4 percent, to be reviewed quarterly. Savings interest rates will be indexed to the loan rates with a 2 percent differential.

The second option involves certificates of participation, much like a bank's Certificate of Deposit, with a $1,000 minimum and no maximum. The introductory rate is 5 percent for one-year terms. When asked how the Foundation can offer a savings rate higher that local bank CDs, Ford noted that the non-profit status of the fund makes this possible.

Loans to churches will be made at 7 percent interest. In addition to the low cost of the loans, another advantage to local churches is that there are "practically no closing costs," Ford said. "A church could save from $3,000 to $7,000."

He continued, saying, "These will be first mortgage loans; the trust factor is high and value factor is very high. Of all the [similar] loan funds [in other conferences] we've researched, not a single one has been defaulted." In other words, the foundation sees churches as solid loan candidates. He added, the NIC Foundation would also tend to be more receptive to "allowing some leeway during difficult times."

Rollout of the new conference savings & loan program will include sending out a direct mailer to all NIC churches early this year.

As to who may invest, Ford says, "We'll be concentrating on NIC, but others in Indiana would be allowed to invest," including retirees now living in other states.

"I truly see this as the Bailey Building & Loan," he said, a reference to Frank Capra's enduring Christmas film, "It's a Wonderful Life," he said.

"Investors know precisely where their money is," Ford added. "We just got confirmation that the bishop will be one of our first investors."

The NIC Foundation office phone number is 765/663-2327; e-mail -- pford@nicumc.org .

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