Holy Borrowers: Equipping Church Leaders for Building Finance

Foreword

by Dr. Frederick Douglass Haynes, III

If I knew then what I know now is an old saying tinged with regret but illuminated by the insight of hindsight. After reading Holy Borrowers by Lisa Miller Autry, I remixed the age-old adage: "If I knew then what Holy Borrowers taught me now!" Holy Borrowers is a brilliantly written blessing to the Body of Christ that will practically help you navigate the land minds of loans and avoid the loan sharks that prey on unsuspecting church leaders who are walking by faith to fulfill God’s vision. Holy Borrowers is a banking GPS that will equip and empower you with direction so that God’s vision will come to fruition for your ministry.

Rev. Lisa Autry writes Holy Borrowers from the vantage point of being a lover of our Lord Jesus Christ and His church and as an insider who successfully worked in the banking industry. Lisa was lauded and applauded for her leadership and service during her auspicious tenure at one of our nation’s leading banking institutions. Holy Borrowers is informed by the insight of an insider who knows the systems and language of banking and borrowing.

At the same time, Holy Borrowers comes to us from one who lives in connection with Christ and faithfully serves His Church. Holy Borrowers is a gift that will position you to win the game of borrowing. To illustrate, imagine playing for a sports team but your opponent plays in a different league. The rules are different. The language is unlike anything you’ve ever heard. The game is going to be played according to the rules your opponent plays by and on the turf of your opponent. One would need more than faith and talent to compete. You would need to know the language and the rules. It would be powerfully beneficial if your team was blessed with a bilingual coach who had starred in the other league and was passionately committed to your success. Rev. Lisa Autry is our bilingual coach who starred in banking and she’s determined that churches have fruitful, God-glorifying ministries.

Holy Borrowers does not avoid the issues of race and racism in banking. Rev. Lisa Autry is a proud Christian Black woman who stands against racial injustice. Racism continues to be an organizing principle structured into systems of the yet to be United States. An ugly history of redlining Black communities by the banking industry produced segregation in housing. Unfortunately, redlining has evolved, and racism continues to infect and inform banking practices. In Holy Borrowers, Lisa diagnoses mental redlining and the other isms that poison the possibilities of marginalized churches and communities. However, Rev. Autry also offers strategies for persisting through and navigating around racism in banking.

I reference Rev. Autry’s tackling the issue of race in banking as one example of the fact that Holy Borrowers keeps it real and honestly and sagaciously deals with the issues and challenges that so many communities of faith have been hit and hurt by. It is not hyperbole to say that for some, borrowing wasn’t holy but an existential and economic hell.

I write this foreword as a pastor with loan scars from the hell of borrowing. Our church was bitten by a predatory loan. However, reading Holy Borrowers has brought a measure of healing and fills my heart with hope that you and your ministry will be blessed by this banking GPS, and will victoriously reach the destination of fulfilling God’s vision for your ministry. Read Holy Borrowers and you will thank God for what you know now, thanks to this gift from our anointed coach, Rev. Lisa Miller Autry.

Peace and Power,

Dr. Frederick Douglass Haynes, III

Senior Pastor

Friendship-West Baptist Church

Introduction

"Wisdom is the principal thing; therefore, get wisdom:

and with all thy getting get understanding."

– Proverbs 4:7 KJV

I think a lot of churches were not really prepared. We have pastors who read the Bible and interpret Scripture, but a lot were really not paying attention to what was going on economically.

– Axel Adams, Rainbow PUSH ¹

In 2012, in the midst of the Great Recession, Reuters released an article entitled, Banks are Foreclosing on America’s Churches in Record Numbers. The article cited the example of a 159-year old church in Georgia that had obtained an $850,000, five-year balloon note in 2005 to finance a new 300-seat sanctuary. When the loan matured in 2010, the church could not repay or refinance the balance. Their lender ultimately foreclosed on the property.

According to the article, the church’s senior pastor shared this telling statement:

The bank has refused to negotiate and to this day I just don’t know why.²

Two years earlier, The Atlanta Journal-Constitution had reported about this same church. In that article, an official for the governing body of that church’s denomination shared a different perspective. He stated:

Frankly, I think the bank did everything they could to keep this from happening. No bank in the world wants to foreclose on a church.³

Two different viewpoints from two different people about the same church loan. In my opinion, the most noteworthy phrase in the communication above is the pastor’s: …and to this day, I just don’t know why. Meanwhile, the official in the church’s governing body asserted that the bank had tried to work with the church, but to no avail.

In 2014, the Fort Worth Star-Telegram reported that a prominent church faced foreclosure after defaulting on $31.5 million in loans. Per the article, the pastor e-mailed that the church:

…is completely current on its mortgage payments through the end of the term of the notes and has attempted, in good faith, to meet every demand made upon it… Never in our discussions was there a mention of the possibility of [the lender] not renewing the note and demanding the full payment at the end of the five years. A rollover loan was the stated and expected course of action. ⁴

In May 2019, Garnet Capital Advisors posted a blog headlined, Church Foreclosures Are on the Rise—Here’s What Lenders Need to Know. It was written as a resource for lenders, not for churches. Here’s an excerpt regarding what lenders face at the prospect of foreclosing on a church:

"…negative perceptions, single purpose buildings and headline risk. Banks often steer clear of lending to churches for this very reason in an effort to avoid getting stuck in a difficult position that doesn’t usually end well for anyone involved. They simply don’t want to be viewed as a source of objection for churches that comes down hard with a financial hammer and forecloses if the mortgage is unpaid.

The problem doesn’t end there, unfortunately. Even after foreclosure occurs, banks and lenders are often left with a large asset that’s extremely difficult to turn around and sell to recoup their losses."⁵

This lack of common ground between church leaders and lenders⁶ occurs repeatedly in the United States every year. There are numerous stories that don’t make headline news, but which are no less heartbreaking for churches and their leadership teams.

So, who’s to blame?

In many instances, members of the church community hold lenders accountable for making loans to churches that are not financially sophisticated; for funding loans that never should have been approved at all. Certainly, predatory lending to churches (and to individuals) has occurred in the past and still takes place today.

Predatory Lending has no simple definition, but according to the Federal Deposit Insurance Corporation (FDIC):

"Predatory lending involves at least one, and perhaps all three, of the following elements:

• Making unaffordable loans based on the assets of the borrower rather than on the borrower’s ability to repay an obligation;

• Inducing a borrower to refinance a loan repeatedly in order to charge high points and fees each time the loan is refinanced (loan flipping); or,

• Engaging in fraud or deception to conceal the true nature of the loan obligation, or ancillary products, from an unsuspecting or unsophisticated borrower."⁷

Certainly, these tactics have occurred within the church financing market. In 2008, The New York Times reported that in the years immediately prior to the Great Recession, specialty financing companies started bundling church mortgages to be sold to investors, and that Moody’s Investors Service even rated several church mortgage securitizations just before that financial crisis.⁸

In that same article, an Executive Vice President of Bank of the West admitted the following:

Lenders loaned far too much, they loaned into lofty projections of future growth, and they just saddled the churches with far too much debt.⁹

I’ve seen numerous church loans that never should have been funded; in fact, the anguish stemming from these loans was the motivation for this book. Holy Borrowers closes with lessons learned from a prominent church that was severely impacted by a predatory lender. As a member of the church community, I grieve with those who have lost momentum and even buildings, particularly because of predatory lending.

As important as this issue is, however, I still have to ask the following question: Is predatory lending the full extent of the problem?

Lenders certainly would disagree, and I fully understand that perspective as well. Pastors and church leaders¹⁰ seeking to obtain financing for church buildings frequently drive the process with the lender and in fact, often take lenders to task for declining their request for financing.

If there are predatory lenders who saddle churches with too much debt, there also are church leaders who vilify non-predatory bankers who in good conscience, decline churches’ requests for debt. That vilification often is shared with members of the church and sometimes, through the media to the public at large.

Moreover, church leaders who sign their loan documents state they have every intention of paying back the loan according to the terms of the agreement—including in the many cases where those terms are clearly explained.

What is the biggest issue, then? I would argue that the biggest issue in church finance is not the banks and it’s not a lack of integrity or intentionality among church leaders. I believe the biggest issue that church leaders face in this area is the lack of financial knowledge on the part of pastors and church leaders who are leading their congregations in the area of finance!

Let me highlight why this is an issue by asking a couple of rhetorical questions.

Would the church community expect a pastor or church leader to perform open heart surgery on a member of the choir or remove an usher’s kidney stone? Pastors wear a lot of hats, but unless they’ve graduated from medical school and passed all the required licensing exams, the expectation is for pastors to pray before, during and after the surgery—and to stay far away from scalpels and the insides of operating rooms!

If anyone were accused of a crime, how many would choose his or her pastor as lead counsel over the legal team? Pastors make wonderful character witnesses and can provide spiritual and emotional support throughout a trial, but unless a pastor has graduated from law school and passed the bar with flying colors, pastors probably shouldn’t take on the role of Johnnie Cochran or Perry Mason.

I’ve been married for over 30 years to a Senior Pastor, Dr. Terrence Autry, and know that many people have all kinds of unrealistic expectations of pastors. Pastors are expected to study well, preach well, teach well, pray well, blog well, lead well, and live well. They’re expected to be at every member’s critical life event—whether in the hospital, the funeral home, or the high school graduation—while maintaining 24/7 access on their cell phone and social media platforms.

Pastors are expected to accomplish these feats while also spending shekinah-glory personal time in the Lord’s presence, maintaining a happy home, and getting their regular sabbath rest!

But even the most unrealistic congregants don’t expect their pastors to take on roles that go far beyond any training received in seminary or through ministry experience. Pastors typically don’t even expect that of themselves.

Then why do so many pastors and church leaders operate in the field of finance without any training whatsoever in that field?

I believe there are several reasons. First, pastors and church leaders too often underestimate the complexity of building finance. Even when I write, complexity, there are some who may be thinking, How complex can this be? I’ve borrowed money for my car, my house, my student loans, and the furniture in my house, and I’m paying them back just fine. What’s the big deal?

The big deal is that borrowing money for our personal purchases based on our personal finances is far less complex because the variables that impact our ability to repay personal loans are far fewer than they are for commercial loans—that is, loans that are made to organizations, rather than to individuals.

Second, the need—and desire—for a church building to house the ministry is one that pastors and church leaders understand very well. This need and desire, coupled with the call to walk by faith, can convince pastors and church leaders that they are called to lead the charge in building finance.

I believe the biggest reason, however, is the simplest one: There are very few, if any, resources made available for pastors and church leaders who want to better understand church finance.

Lack of Resources

Ironically, there seems to be no shortage of information for Christians when it comes to the topic of financial giving. Simply Google Christian giving and your hits will number in the hundreds of millions. Books, seminars, and blogs abound for helping congregants grow in their understanding of how to be a good steward of the financial resources the Lord allows us to manage. The problem is, there are precious few written for pastors and church leaders to manage the financial resources when they are given!

Does the lack of these types of resources for church leaders surprise you? It surprised me! It is difficult to find any material for equipping these same leaders in possibly the greatest single expenditure within the church—the acquisition, renovation, or construction of one or more church buildings. Further, I am hard pressed to find any material—whether in books or blogs—written by someone from within the commercial banking industry where loan requests are analyzed and loan decisions are made.

In August 2015, Vanderbloemen Search Group published an article entitled, 16 Books Every Church Leader Should Read on Their Next Sabbatical. As I perused Vanderbloemen’s original list, I couldn’t find one book on the topic of finance; personal, church, or otherwise. Yet, one of the most significant challenges faced by most church leaders involves the acquisition, construction, and financing of building facilities.

A seminary education is not a promised help either. Financing Ameri­can Religion, edited by Mark Chaves & Sharon L. Miller, identifies this challenge for pastors. In the chapter entitled, Clergy as Reluctant Stewards of Congregational Resources, contributor Daniel Conway writes:

Seminaries probably can do more to train prospective clergy for the administrative and practical aspects of their work. The limited training opportunities that are currently available to future church leaders in the stewardship of human, physical, and financial resources normally are not a required part of the seminary curriculum; they are not, in general, regarded as an integral part of the theological and pastoral education that church leaders receive in the seminary. As a result, future church leaders do not receive systematic, integrated preparation for the management dimensions of pastoral ministry. ¹¹

Janet T. Jamieson and Phillip D. Jamieson make a similar observation. They note:

Even the largest Protestant seminaries, such as Asbury, Fuller, Princeton, and Southwestern Baptist, offer no required or elective courses dedicated to financial ministry.¹²

The Parable of the Wise Steward

In the parable of the wise steward, Jesus makes this telling observation:

…the people of this world are much more shrewd in handling their affairs than the people who belong to the light. (Luke 16:8 GNB)

This parable centers on the fact that Christians ought to apply the same type of shrewdness or business savvy toward righteousness that the wicked servant applied toward unrighteousness. In this context, however, I’m focusing on this takeaway: The children of light need more business savvy!

This is the purpose of Holy Borrowers: Equipping Church Leaders for Building Finance (Holy Borrowers). God calls pastors and church leaders to be wise and shrewd stewards of the money that people donate to the church. This wisdom includes how churches finance the buildings they build, renovate, or buy.

Why This Book is Unique

Holy Borrowers is unique in two primary ways.

Author’s Background

First, Holy Borrowers is unique because it was written by someone with in-depth experience in both finance and Christian ministry. On the one hand, I served in the commercial banking field for over 30 years. Prior to my retirement from banking in April 2019, I was the Senior Vice President and Dallas Market Manager for a $38 billion regional bank leading teams of commercial bankers in the Dallas Metroplex. These teams served organizations with up to $50 million in annual revenues with financing and diverse business services.

Over my career, I’ve discussed, analyzed, closed, and declined more loans than I can count. The smallest loan I ever approved and funded was for $3,000 to an entrepreneur who needed to purchase a carpet cleaning machine for his business. The largest loan I ever analyzed and got approved by a Senior Loan Committee was for $100 million to a publicly-traded corporation that simultaneously received similar-size loans from four other banks. I can tell you the positive traits these loans had in common, despite their diverse size and complexity.

I have taught commercial lending skills to recent college and business school graduates with finance and accounting degrees, and I have mentored numerous junior and senior bankers over their careers. I have an intimate understanding of the lending function within banks and how that function dovetails with the banking needs of organizations.

At the same time, I am a Christian and am intimately involved in—and passionate about—God’s church. I already mentioned that I’m married to Dr. Terrence Autry. He is the Lead Pastor of Christ Community, a 22-year old church plant in Richardson, Texas, approximately 15 minutes north of downtown Dallas. I oversee the finance function of our church and serve in numerous other leadership roles. I also am a called and ordained minister of the gospel of Jesus Christ. I have served in ministry for as long as I’ve been a banker and have first-hand knowledge of the inner workings of God’s church.

Finally, my educational background blends these two commonly-­distinct fields of church and finance. I have an undergraduate degree in Economics from Brown University, an M.B.A. degree in Finance and Marketing from the Anderson School of Management at UCLA, and an M.A. degree in Cross-Cultural Ministries from Dallas Theological Seminary.

Truthfully, I didn’t understand for many years what the Lord was doing in my life with these two seemingly divergent paths—but I finally have caught up with His vision! Holy Borrowers is made possible by the knowledge the Lord has allowed me to gain over these past 30-plus years. My father-in-law once told me, You’ve paid a lot of dues to know what you know. I believe some of those dues have reaped Holy Borrowers.

Plain Language

Second, Holy Borrowers is unique because it provides information about building finance in plain language that does not require a finance or accounting degree to decipher. That’s important for pastors and church leaders who don’t have finance or accounting degrees! My goal is to provide a resource that not only can be understood while it is read, but also can be accessed by pastors and church leaders again and again as the need arises.

Book Layout

Holy Borrowers is divided into four parts. Part I: Preparation (Chapters 1 through 5) provides insights for getting ready for building finance, including important considerations before applying for a building loan. Part II: Inside the Bank’s Credit Process (Chapters 6 through 12) unveils how banks evaluate church loan requests—a mystery to many if you’ve not worked inside the commercial lending side of a bank.

Part III: Advanced Lending Topics (Chapters 13 through 17) discusses more complex lending topics, including balloon notes and construction loans. Additionally, in the context of the current coronavirus pandemic, I prayerfully added a new chapter entitled, In the Midst of COVID-19. This chapter focuses on the economic impact of the pandemic on church finance and financial principles that should be applied going forward. Finally, Part IV: Lessons from Successful Churches (Chapters 18 and 19) provides learned lessons from two highly-successful churches that financed their large church edifices.

The Appendices at the end of Holy Borrowers are not considered required reading, but will be helpful to anyone desiring to take an even deeper dive into building finance. The Appendices include: typical items included in a real estate loan application; sample financial statements for a church; trend analysis and other financial tools used by bankers; and, guidelines for choosing a good attorney specializing in commercial real estate loans.

Closing Thoughts

Nearly all of Holy Borrowers was written with the Great Recession as a backdrop because of its devastating impact on so many congregations and their leaders. Church leaders continued to struggle with financing decisions in the years following the economic recovery. Now, in the midst of the current COVID-19 crisis and in the years to come, the information provided here is as relevant for church leaders as it ever has been.

Moreover, although Holy Borrowers certainly is a resource for churches of all sizes, I have a special interest in reaching leaders of small to medium sized churches; that is, those with 300 or less in weekly attendance. Here’s the reason: Many of these churches don’t have members on their leadership team or in their congregation who have strong finance backgrounds. This reality places an even greater burden on the senior pastor and church leadership team who are striving to accomplish so much for the Lord, but with relatively limited resources.

The Atlantic Journal-Constitution shared a telling quote from a senior pastor following the foreclosure of his church building. Here’s what he said:

I didn’t have enough experience to know I was getting bad advice… How many pastors do you know who can pay the bills, run the business of the church and get out there and preach and teach and be available to the people?¹³

Exactly.

My prayer is that Holy Borrowers: Equipping Church Leaders for Building Finance will begin to fill a critical knowledge gap for pastors and church leaders, and be a blessing to all those who use it as a resource. Too many pastors and church leaders have lost countless hours of sleep—and even lost their church buildings—based on what they didn’t know before they obtained financing.

The bottom line? The Church is the Body of Jesus Christ and knowledge is power. Let’s be equipped for the work at hand. This must include gaining a better understanding of the financing process for the largest asset most churches ever will own, for the upbuilding of God’s Kingdom.

1 Craig Schneider, Foreclosure Crisis Hitting Some Metro Churches, Atlanta Journal-Constitution, February 2, 2011, online: https://www.ajc.com/business/foreclosure-crisis-hitting-some-metro-churches/73kmzappmPRlavfWD41aaM/.

2 Tim Reid, Banks are Foreclosing on America’s Churches in Record Numbers, Reuters, March 8, 2012, online: https://www.reuters.com/article/us-usa-housing-churches/banks-foreclosing-on-churches-in-record-numbers-idUSBRE82803120120309

3 Bill Banks, Foreclosure Threatens Survival of Longtime Lithonia Church, Atlanta Journal-Constitution, December 27, 2010, online: https://www.ajc.com/news/local/foreclosure-threatens-survival-longtime-lithonia-church/mrL8SRHGOG8m0Cr7MqdAdO/.

4 Sandra Baker, Arlington’s High Point Church Faces Foreclosure on 107-Acre Property, Fort Worth Star-Telegram, May 20, 2014, online: https://www.star-telegram.com/news/business/article3858539.html.

5 Garnet Capital Advisors, Church Foreclosures Are on the Rise—Here’s What Lenders Need toKnow, May 15, 2019, online: https://www.garnetcapital.com/news/article/Church-Foreclosures-Are-on-the-Rise----Heres-What/40062757.

6 I learned early in my career that good banks are not just lenders; that is, banks should do more than loan money. That said, in this context, I will use the terms bank and lender (and their derivatives) interchangeably to include banks, savings and loans institutions, credit unions, and non-bank financial institutions.

7 Federal Deposit Insurance Corporation, FDIC’s Supervisory Policy on Predatory Lending, January 22, 2007, online: https://www.fdic.gov/news/news/financial/2007/fil07006.pdf.

8 Louise Story, Foreclosures Don’t Spare the House of God, New York Times, December 26, 2008, online: https://www.nytimes.com/2008/12/27/business/27church.html.

9 Ibid.

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