Saturday, September 18, 2010
A Way Out of No Way
Time to give an update on my quest for financing. (Never even thought this part of the project would be a “quest.”)
The glimmer of hope I left off with in the last post disappeared rather quickly. My bank thought another local bank could keep my loan in-house and not have to sell it on the secondary market, meaning the expected low appraisal may not matter. This turned out to be false. The contact at this other bank wondered where anyone would get this idea.
So then I called around to local credit unions—on the advice of a comment on my previous post. None of them even offer construction loans. Not now, anyway.
Then I looked into a couple of the major Christian credit unions. One of them apparently provided the construction loan for one of the largest churches in Wilmington. The phone conversations with these organizations proved to be amusing. I was never quite sure how to introduce my project—as a house or a church. I tried “house” first, in a call to the Evangelical Christian Credit Union:
Me: Hi, I’m looking for a construction loan for a house. And… I’m a Christian?
Employee: We only offer loans to churches.
Me: What if my house is also a church? A house-church? I plan to hold worship services in it.
Employee: Oh, ummm, well… uh, could you hold please?
Employee: We classify that as “mixed-use,” and we don’t offer loans for those right now. You should try the Christian Community Credit Union.
So I called the CCCU:
Me: Hi, I’m looking for a construction loan for a church.
Employee: Okay! We’ll need five years of financial records, tithing, attend—
Me: Oh, no, we don’t have all that; we’ve just been meeting for about six months.
Employee: Then we can’t do the loan yet, but keep your records and maybe—!
Me: But what if it’s basically a house? Do you offer loans to Christians for houses?
Employee: No, but you should try the Evangelical Christian Credit Union.
I read an article recently about hearing the Holy Spirit. In particular the author addressed the question of how to move forward on a decision or action when we are not sure it’s what God wants. Often we become paralyzed by uncertainty, vowing not to do anything until God makes his will absolutely clear. I was struck by the author’s suggestion to, instead, move on a decision just because we think it might be what the Spirit is asking us to do.
That seems to have potential to add grease to just about every decision-making process. Do you think there’s a good chance the Spirit is leading you to do X? Then go for it, jump in, “taste and see that the Lord is good.” Even if you turn out to be wrong, the worst that can happen probably isn’t all that bad. A little embarrassment maybe, or an awkward situation. I think God would honor the decision to act on what we think is his will, even if we’re wrong, above the decision to sit back and demand him to give us a sure sign.
I like certainty too, and can be paralyzed without it. After running into all these financial dead ends I started to look up with a question mark on my forehead: I thought I was sure, but should I stop now? Did you or I lead me down this path? No sure answer came. Although I do keep getting encouraged by people. And into my head keep popping visions of the good things that this place could do and be and inspire. But if I try, I can also imagine bad things. So it helps to ask: Am I certain that God might be asking me to build this house? Yes! Yes I am.
So away I went. I sent a note to my contact at the bank saying the other bank didn’t work out, and asked for any other ideas. She emailed back saying that the only option she could see was to go ahead and order the appraisal and offer me a loan for that amount, however low—as long as I could come up with the remainder from another source.
I didn’t even think this was a possibility—that the bank would offer a loan for an amount significantly less than the cost of construction. How can they be sure I’ll finish the project? What would this mean for the bank’s sale of the loan, if the loan is less than the house’s value? I’m still not clear on all the answers, but the bank explained that my supplemental funding would be drawn first, and then the bank loan would fund the rest—so that the bank is sure its funding amount will be sufficient to complete the project.
The only question that remained was, Where O where will I find supplementary funding?—which, depending on the appraised amount, could be close to 100 grand. Well, it just so happened that a very generous couple had been following my blog, and offered to supplement the cost of the project with a private loan up to a very generous amount. I think the technical financial term for this funding is: “parental loan.”
I reluctantly but gratefully accepted. Is this how God wants to do it? Of course God could use any number of other ways, and I sent out an inquiry to a potential lead to other funding sources that I haven’t heard back from yet. But as of now this dual bank-parental loan is the only way forward. Other than pride and/or individualism I’m not sure why I’d be resistant to this way. Maybe that’s God’s point.
Still, for their sakes, I’d like the “parental” portion of the loan to be as small as possible, so it would be great if the appraisal comes back higher than expected. The problem, as I mentioned in the last post, is that appraisers can’t find properties in the area that are comparable to mine in terms of cost per square foot. But my bank recently found one that might come a lot closer than most—a house in Wilmington currently under construction that is unique, “green,” and contemporary in style. The square footage is also similar to mine. It appraised for about $160 a square foot—much higher than the typical $100 to $120. If my house appraises for $160 per foot, the bank loan would cover 4/5 of my construction costs. That would be good.
One little catch is that, before this house can be used as a comparison for my appraisal, it has to finish construction and close—slated for the end of September, but I know how construction goes. Well, this is a funny kind of waiting period, no? A house in Wilmington has to close before I can get an appraisal to get a portion of a loan for a church/house in Leland. Maybe I should call the owners of this house and inform them that God is waiting.