1. Loans shall be for the purchase of real property, church buildings, or the construction, renovation and repair of local church structures, or the consolidation of building debt.
2. Applications for the loans will be submitted to the USA Church of the Nazarene Loan Fund, 17001 Prairie Star Parkway, Lenexa, Kansas 66220, on the application supplied by the Fund.
3. Loan applications must be approved by the district superintendent and the district advisory board.
4. Loan repayment must be fully guaranteed by the district advisory board, as evidenced by the District Superintendent and Advisory Board Secretary signing an Advisory Board Resolution for a Church Loan Guaranty and a Guaranty Agreement, provided in the UCLF loan application.
5. If the collateral is sold the district must ensure the repayment of any loan balance not covered by the sale of the property.
6. Loan payments are due on the first day of the month. If a payment is received after the 15th a late penalty equaling 5% of the monthly payment will be charged.
7. If a loan becomes delinquent, interest will continue to accrue during the delinquency and payments will be applied to interest first and then to principal.
8. If a church becomes delinquent 30 days, it must provide UCLF and the district a written plan for bringing the loan current.
9. When a loan is past due 60 days or more, the district must insure the principal and interest be brought current before further delinquency results.
10. Loans within policy will be evaluated and approved by the Loan Fund Administrator. Exceptions to policy must be examined and approved by the General Treasurer/ Headquarters Financial Officer.
11. In all cases it is required that buildings on which loans are made shall be kept insured in a reliable insurance company, in favor of the General Board as its interest may appear. A memorandum of the policy shall be filed with the loan papers.
12. Funds are not to be forwarded until all papers are properly executed and deposited with the USA Church of the Nazarene Loan Fund or its order.
13. No additional loans shall be made on a district on which there is a delinquent loan of 45 days or more. Once a loan is delinquent 45 days or more, the loan must be brought current and remain current for a minimum of 3 months before another loan can be approved on that district.
14. No additional loan shall be made on a district where required legal instruments for loans in force, such as insurance policies, mortgages, notes, district guarantees, etc were not provided, due to failure or negligence on the part of the borrower.
15. A copy of the borrower's Articles of Incorporation must be on file with UCLF and comply with the provisions as stated in the Manual of the Church of the Nazarene, section 102 -Incorporation.
16. Title property on which loans are to be granted must be vested in fee simple absolute, in a corporation or board of trustee in accordance with the Manual of the Church of the Nazarene and the laws in the state wherein the property is situated. Property must be held so that it can be sold and conveyed without legal hindrances or restrictions. This is to be construed to include deeds containing reserve clauses, revertment clauses, or other legal impediment. A satisfactory lender's title insurance policy must be furnished before loans are granted.
17. Churches receiving loans will pay all expenses incurred in the transaction, including the preparation of the necessary legal papers. USA Church of the Nazarene Loan Fund will charge a refinance fee for refinancing a current loan in an amount to be determined by the administrator.
18. Loans shall be made for a term and rate as determined by the Investment Committee.
19. The amount of the loan should not exceed a figure determined by considering the following:
a) the annual operating budget
b) the total raised for the prior 3 years
c) the total construction or purchase price
d) a maximum loan amount of $400,000
e) for an established church, "the amount of total indebtedness will not exceed three times the average of the amount raised for all purposes in each of the proceeding three year". (Manual 234.4)
f) for a new church no loan shall exceed 3 times the total raised in one year.
g) when an MAI appraisal is provided, a loan to value ratio of 95% may be utilized. Without an MAI appraisal a loan to value ratio of up to 85% may be utilized.
20. Loans must be secured by a first mortgage or deed of trust and evidenced by a promissory note. These documents shall be signed by the president and the secretary of the district or local church corporations. The note shall be made in favor of the "General Board of the Church of the Nazarene, a Missouri Corporation," as the legal corporation through which the business of the USA Church of the Nazarene Loan Fund is conducted. On all legal documents where the trustee of the General Board of the Church of the Nazarene is named, the same will be the General Secretary of the Church of the Nazarene.
21. Loans shall be restricted to Nazarene churches located in states of the United States and the District of Columbia (Washington D.C.), and shall not be available to churches located in territories, commonwealths, protectorates, or other possessions of the United States.