Update June 16: As of today, 65 churches have taken advantage of the interest-only relief option.
It didn’t take long for Beth Harrison, business administrator at Englewood United Methodist Church, to react to the news that financial relief was available for hardships caused by COVID-19.
Within minutes of getting a letter from the Florida United Methodist Foundation offering an interest-only option for three months on the church’s Development Fund loan, she jumped on it.
“I think I responded in 15 minutes,” she said. “It was a tremendous blessing to get this news. Given all the uncertainty ahead of us, it was just what we needed.”
The Englewood church typically pays $5,400 monthly for its loan, administered by the foundation. That obligation drops to an interest-only payment of $1,100 through June, giving the church more than $4,000 extra in cash flow to get through this difficult stretch.
Like many church stewards, Harrison is bracing for a drop in tithes during the coming months.
Many of the church’s snowbird members headed home early to follow stay-at-home orders closer to family. Worship has transitioned to online services to comply with the state’s order to maintain social distancing and keep gatherings to 10 people or less.
And some congregants will face financial difficulties of their own, with jobs cut or temporarily suspended and the stock market dropping dramatically.
Though the church has online giving, some people prefer to write a weekly check and drop it in the collection basket — no longer possible while people aren’t in the pews.
“We’ve got peace of mind,” Harrison said. “And that means a lot these days.”
“It was a tremendous blessing to get this news. Given all the uncertainty ahead of us, it was just what we needed.” — Beth Harrison, business administrator; Englewood United Methodist Church
Like all of America, the foundation is navigating through new waters with a pandemic that is gripping the world.
Andy Craske, vice president of loans and investments, says the foundation generally offers the interest-only option to its loan holders during times of emergencies. In Florida, that tends to be after hurricanes, when many communities face cleanup and rebuilding.
But at its March meeting, board members recognized the impact COVID-19 would have on some churches and decided the circumstances warranted the same treatment as a natural disaster.
“I had heard that giving was down anywhere from 20 to 60 percent,” Craske said.
Response to the board’s fast action proved the hunch was right. So far, 39 churches have signed up.
“This will offer some immediate relief to those who are in a bind,” he said. “Think of it as a triage situation.”
Currently, the Development Fund oversees 185 loans for 181 churches, with a loan balance of $126 million. The lending rate is now at 4.25 percent.
Most are 20-year loans, but Craske says the average life of a church loan is about seven to eight years. Congregations typically pay them off before the due date because they have access to additional funds through capital campaigns, bequests or diligent financial practices
“Church members don’t like loans hanging over their heads,” Craske said. “They prefer to settle up sooner than later.”
The three-month period is fluid, just like the unknown future of the pandemic.
“We’ll revisit this in a few months, depending on need,” he said. “As long as our depositors are getting paid, it won’t impact our fund. And in the long run, it won’t make much difference at all with the church’s loan.”
Susan Lewis, business manager at CrossRoad United Methodist Church in Jacksonville, says going interest-only for a few months will cut payments in half — from $18,000 to $9,000.
“This means the difference between staff getting paid and to keep serving our members,” she said.
This isn’t the first time CrossRoad has been a beneficiary of the temporary assistance. In 2017, Hurricane Irma caused flooding and devastating storm-surge damage in Jacksonville, prompting the foundation to offer the interest-only option.
“This is a time for all people to come together as a community and with God. … And having this financial relief allows us to concentrate on getting this mission done in a new way.” — Susan Lewis, business manager; CrossRoad United Methodist Church, Jacksonville
“It helped us then, and it will help us again,” Lewis said. “This is a time for all people to come together as a community and with God. We just have to do it differently for now. And having this financial relief allows us to concentrate on getting this mission done in a new way.”
At Asbury United Methodist Church in Vero Beach, a significant drop in collections can have a massive impact. The church has about 80 congregants, many of whom are elderly.
“We don’t have an online giving program, so this social separation means fewer checks coming in,” the Rev. Joe Moxley said. “Cash flow is a real issue. Even though we can’t have church as we know it right now, the bills still are coming in.”
With a monthly loan payment of $2,128, Asbury now will have an interest-only payment of $464 for three months.
“When you’re as small as we are, that’s a big difference,” Moxley said. “It relieves a lot of pressure. Right now, I’ve got members dealing with isolation and depression issues, and I’d rather concentrate on that rather than money issues.”
Churches needing the interest-only assistance should email a request to Craske at firstname.lastname@example.org. After the request is received, the foundation will send a formal letter to be signed and returned.