Ministry Today – Serving and empowering church leaders

Three-quarters of the nation’s 335,000 churches are virtually or completely mortgage-free. But for many of those in the minority carrying a loan on their property, what were already tight times—due to decreased giving from financially stretched churchgoers—are quickly becoming tough times.

A recent report by First American CoreLogic discovered that hundreds of churches are facing foreclosure, almost all of which were affected by the mortgage boom in recent years that saw church-issued mortgages increase 50 percent from 2002 to 2005. According to the U.S. Census, spending on church construction rose from $3.8 billion in 1997 to $6.2 billion in 2007. A separate study found that church borrowing as a whole peaked at $28 billion nationwide in 2006, including mortgages, construction loans and church bonds.

“There have been too many churches with a ‘build it and they will come’ attitude,” says N. Michael Tangen, executive vice president at American Investors Group, a church lender in Minnetonka, Minn. “They had glory in their eyes that wasn’t backed up with adequate business plans and cash flow.”

Those loaning churches money can attest to the bubble bursting. In its 45-year history, the Evangelical Christian Credit Union in Brea, Calif., had foreclosed on only two churches. This year it has served foreclosure papers to seven of its 2,000 members, and its president says the company expects to add to that number in the coming months. Another church lender, Church Mortgage & Loan Corp. of Maitland, Fla., has already foreclosed on 10 church properties in the past two years and, as a result, had to file for Chapter 11 bankruptcy protection in March.

“Some of the mentality that you saw taking hold of the residential marketplace probably shifted into the church,” says Dan Mikes, executive vice president of the church banking division of Bank of the West. “Lenders loaned far too much, they loaned into lofty projections of future growth, and they just saddled the churches with far too much debt.” [, 12/23/08;, 12/26/08]

Ministry Today Subscription Special - Subscribe to Ministry Today magazine today and get 12 issues (2 full years) plus Amplified Leadership, a free leadership book for only $24.

Order Life in the Spirit to actively grow your ministry in the power of the Holy Spirit. Your congregation will stay saturated in God's Word, learn to hear His voice, understand their purpose and calling and move into an active role in your ministry.

Your Turn

Comment Guidelines
  • Jentezen Franklin encourages church leaders to encourage their flocks to vote their values.

    Why We Must Count the Cost—and Vote

    There is a propaganda war that is raging in this country, and it is full of manipulation, lies, ...

  • Graveyard

    An Autopsy of a Deceased Pastor

    There are eight common patterns to look for.

  • Why did you choose the church you attend?

    7 Key Reasons People Choose a Church

    The real issue is not the intrigue of this research; it is what you and your church will do about ...

  • Many of these issues are self-inflicted.

    10 Poisons That Will Kill Any Church

    Here is why the churches that die from them do so by their own hand.

  • The Key to True Power

    The Key to True Power

    Jesus overturned every worldly idea about power when He introduced the concept of servant leadership.

  • Have you ever had a cringe moment during your church announcements?

    The 7 Deadly Sins of Church Announcements

    Sometimes they just miss the mark, albeit unintentionally.

  • Some of these reasons for leaving the church are simply not plausible.

    7 Reasons People Leave Their Church During Crisis Times

    Some of the excuses are pretty extreme and, quite frankly, lazy.

  • Do yourself and her a favor. Take the target off your pastor's wife's back.

    Why Pastors' Wives Have a Target on Their Back

    Here are three instances of what we are doing to the wives of God's servants sent to ...

  • The heart of a leader is more important than any other characteristic.

    5 Qualities to Seek in the Heart of a Leader

    The hope here is that you would reflect on your own leadership and consider your own heart as a ...

Use Desktop Layout
Ministry Today Magazine — Serving and empowering church leaders