{"id":7616,"date":"2006-10-21T19:38:49","date_gmt":"2006-10-22T00:38:49","guid":{"rendered":"https:\/\/www.lavistachurchofchrist.org\/cms\/?p=7616"},"modified":"2019-08-17T19:44:59","modified_gmt":"2019-08-18T00:44:59","slug":"should-i-co-sign-a-loan-for-a-church-building","status":"publish","type":"post","link":"https:\/\/www.lavistachurchofchrist.org\/cms\/should-i-co-sign-a-loan-for-a-church-building\/","title":{"rendered":"Should I co-sign a loan for a church building?"},"content":{"rendered":"\n\t

Question:<\/h2>\n

I am a member of a fundamental Bible-teaching church and firmly believe in the “literal” Word of the Bible. But I find myself in a difficult situation.\u00a0\u00a0We are building a new Church building.\u00a0\u00a0The building project was kicked off using traditional construction bank financing. We had enough assets and membership support at the time to commence the project.\u00a0\u00a0Halfway thru the construction, the bank got nervous because we were behind on the construction schedule and requested guarantors on the interim financing to help mitigate their risk.\u00a0\u00a0I and another member deposited $150,000 in designated accounts with the bank as collateral.\u00a0\u00a0Keep in mind we have always been able to make our interim construction finance payments.\u00a0\u00a0We discussed this move as “co-signing” and not wise; however, the equity position of the building swayed us to put up the collateral.\u00a0\u00a0The building was just appraised for $1.8 million with a debt of $900,000. Our logic was that even if we had to liquidate we could clear our bank debts and save the collateral of the church supporters.\u00a0\u00a0Our plan all along was for the asset itself to stand-alone and not require any co-signers or guarantors for any financial shortfalls.\u00a0\u00a0Therefore, final financing would not require co-signers. We have just learned that the bank is requiring co-signers or guarantors for the permanent financing for the church building.\u00a0\u00a0I now find myself in a box and would like your advice based on scripture.\u00a0\u00a0I believe I made a grave error by cosigning the construction loan earlier.\u00a0\u00a0Perhaps God had another plan.\u00a0\u00a0I’m leaning toward not cosigning which may potentially put me at odds with some of my Christian brothers and leaders.<\/p>\n

If possible, reply as soon as possible. I have to make a final decision soon.<\/p>\n\t

Answer:<\/h2>\n

God has consistently stated that co-signing loans is not a wise choice. See the lesson “Avoiding Debt<\/a>” for a number of passages regarding this issue. It is not that co-signing is a sin per se, but that it places the co-signer in a very poor situation. You incur full obligation for the payment of the loan and yet you have no control over what was purchased.<\/p>\n

Let us suppose that ten years from now the area you live in suffers a heavy economic downturn which forces half your members to leave to other places seeking jobs (such has happened in many areas). The church no longer has the income from contributions to make its payments. The bank will seek payment from all sources available to it. It will foreclose on the property, sell it at a distressed value, and seek anything remaining from the co-signers. Are you willing to accept the risk? Are you financially able to handle the risk?<\/p>\n

The bank is seeking to minimize its risks in gaining repayment of its loan. Co-signers are not required for any loan. The request for co-signers means the loan officers (or the underwriters of the loan) are nervous about the long-term financial stability of the congregation. Your choices are:<\/p>\n

    \n
  1. Prove to them that even if the congregation folded, they could regain the full amount of the loan by selling the building. Also, give evidence from the congregation or similar congregations of the long-term stability of the group.<\/li>\n
  2. Shop for a loan with another lender, preferably one more used to dealing with churches and corporations.<\/li>\n
  3. Agree to co-sign, and set the guaranteeing funds aside until the obligation is retired. Basically, you need to be in the position to treat the money as spent and “lost” to you. If nothing happens, then great, you have found funds again. But if the worse happens and the funds are used to cover the church’s obligations, well, it was already spent in your mind. “And if you lend to those from whom you hope to receive back, what credit is that to you? For even sinners lend to sinners to receive as much back. But love your enemies, do good, and lend, hoping for nothing in return; and your reward will be great, and you will be sons of the Most High. For He is kind to the unthankful and evil<\/em>” (Luke 6:34-35).<\/li>\n<\/ol>\n

    Since I don’t know your financial situation, I can’t say what is the best choice for you and your family. Your first obligation is to provide for your own (I Timothy 5:8). If you are able to do this and have funds available to aid others, then you can freely give aid (I Timothy 6:17-19).<\/p>\n","protected":false},"excerpt":{"rendered":"

    Question: I am a member of a fundamental Bible-teaching church and firmly believe in the “literal” Word of the Bible. But I find myself in a difficult situation.\u00a0\u00a0We are building a new Church building.\u00a0\u00a0The building project was kicked off using traditional construction bank financing. We had enough assets and membership support at the time to…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[20],"tags":[257,258],"class_list":["post-7616","post","type-post","status-publish","format-standard","hentry","category-answer","tag-finances","tag-money-management"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":33269,"url":"https:\/\/www.lavistachurchofchrist.org\/cms\/because-of-road-construction-our-church-is-split-into-two-groups-are-they-still-one-church-or-are-they-two\/","url_meta":{"origin":7616,"position":0},"title":"Because of road construction, our church is split into two groups. 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I have a matter that needs your advice on dealing with conflict resolution. I have these two brethren who had a misunderstanding over a report on the church building project. They belong to the team overseeing the project. One is\u2026","rel":"","context":"In "Answer"","block_context":{"text":"Answer","link":"https:\/\/www.lavistachurchofchrist.org\/cms\/category\/answer\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":49869,"url":"https:\/\/www.lavistachurchofchrist.org\/cms\/is-it-scriptural-for-a-church-to-use-committees-to-make-decisions-for-the-church\/","url_meta":{"origin":7616,"position":2},"title":"Is it scriptural for a church to use committees to make decisions for the church?","author":"Jeffrey Hamilton","date":"February 9, 2017","format":false,"excerpt":"Question: Good day brother, I'm a member of the church of Christ. Is it scriptural for congregations of the Lord's church to have committees? I mean committees like evangelism committee, building committee, edification committee, visitation committee, benevolence committee, counseling, and disciplinary committee, etc. Thanks in anticipation. Answer: In the Bible,\u2026","rel":"","context":"In "Answer"","block_context":{"text":"Answer","link":"https:\/\/www.lavistachurchofchrist.org\/cms\/category\/answer\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":53984,"url":"https:\/\/www.lavistachurchofchrist.org\/cms\/should-the-church-ask-its-members-to-borrow-money-for-its-building-project\/","url_meta":{"origin":7616,"position":3},"title":"Should the church ask its members to borrow money for its building project?","author":"Jeffrey Hamilton","date":"August 25, 2018","format":false,"excerpt":"Question: Hi Jeff, Is right to borrow money for the sake of contributing to building a worship hall for the church? We are encouraged by our minister, as individual brethren, to do so since it is an important project of the church. Answer: The Bible teaches that being in debt\u2026","rel":"","context":"In "Answer"","block_context":{"text":"Answer","link":"https:\/\/www.lavistachurchofchrist.org\/cms\/category\/answer\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5718,"url":"https:\/\/www.lavistachurchofchrist.org\/cms\/does-i-corinthian-1133-allow-fellowship-meals-at-the-church-building\/","url_meta":{"origin":7616,"position":4},"title":"Does I Corinthian 11:33 allow fellowship meals at the church building?","author":"Jeffrey Hamilton","date":"July 11, 2019","format":false,"excerpt":"Question: Dear Brother in Christ, \u00a0 I read your answer to Why is eating in the building an issue?\u00a0concerning eating in the building and have a few questions. \u00a0 First, you quote I Corinthians 11:17-22 where Paul is remonstrating the Corinthians for leaving some hungry and for some getting drunk\u2026","rel":"","context":"In "Answer"","block_context":{"text":"Answer","link":"https:\/\/www.lavistachurchofchrist.org\/cms\/category\/answer\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":40828,"url":"https:\/\/www.lavistachurchofchrist.org\/cms\/thank-you-for-the-article-on-the-construction-of-quality-bibles\/","url_meta":{"origin":7616,"position":5},"title":"Thank you for the article on the construction of quality Bibles","author":"Jeffrey Hamilton","date":"November 3, 2013","format":false,"excerpt":"Question: Thank you for\u00a0the article on the construction of quality Bibles\u00a0and the overview of some of the companies. 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It's a shame that the premium Bibles are so hard to find and, when you do find them, of limited versions or\u2026","rel":"","context":"In "Answer"","block_context":{"text":"Answer","link":"https:\/\/www.lavistachurchofchrist.org\/cms\/category\/answer\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/posts\/7616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/comments?post=7616"}],"version-history":[{"count":0,"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/posts\/7616\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/media?parent=7616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/categories?post=7616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lavistachurchofchrist.org\/cms\/wp-json\/wp\/v2\/tags?post=7616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}