How much building can you afford?

Remember—a capital stewardship campaign is not designed to tell you if you should build, but to demonstrate how you can.

DETERMINE YOUR FINANCIAL POTENTIAL.

• Do this early in the building planning process.
• Define space needs, establish project goals, and adopt a realistic budget.
• Communicate your financial parameters to your architect clearly and firmly.

ESTIMATE YOUR BORROWING CAPACITY.
(Estimates based on normal circumstances)

• Borrow up to 75% of the appraised value.
• Borrow up to 2.5 times the church’s annual undesignated income.
• Monthly debt service should not exceed 25-30% of monthly income.

MEASURE THE AFFORDABILITY OF YOUR PROJECT.

• Available Building fund resources.
• Real assets that could be liquidated, such as buildings or property.
• Current mortgage interest rates.
• Receipts from a Capital Stewardship campaign or campaigns.
• Community and church growth rates.
• Potential for multi-phased development/construction of the master plan.

ESTABLISH A WORKABLE FINANCIAL PLAN.

• Evaluate total resources available for project.
• Adjust construction schedule for maximum savings.
• Anticipate probable cash flow to minimize financing costs.
• Explore interim financing from local banks and other sources.
• Consider interest costs of interim financing in total project cost projections.