FAQS

(Frequently Asked Questions)

What are first mortgage Church Bonds?

In simplest terms, first mortgage Church Bonds are the promise of a church to repay investors for loaning the church money.  To secure investors, the church pledges its real estate as collateral upon the bonds.  Just like your home loan, the pledged collateral is secured by placing a first mortgage lien or deed of trust upon the real estate until the bonds are fully repaid.  In the event the church fails to honor its commitment to repay investors, the pledged collateral will be foreclosed and sold in order to repay investors.

Why do churches issue bonds?

Churches issue bonds to finance new construction, remodel or expand existing facilities, refinance existing debt and to purchase land and buildings.  Most importantly, Church Bonds are the only reliable method for churches to consistently obtain TRUE, long term financing.  Church Bond financing locks in a church's interest rate AND its mortgage payment until they have repaid their debt in full.  Church Bonds are the financing method of choice used by responsible and sensible churches to protect against interest rate fluctuations and changes in their mortgage payment.

Which churches issue bonds?

Churches dedicated to strengthening the moral foundation of America and who promote Christian values, principles and teachings are the only churches we assist in issuing Church Bonds!

How does a church pay the principal and interest on the Church Bonds it issues?

A church makes weekly or monthly mortgage payments into an account held by an independent Trustee.  The Trustee is typically a State or Federal Bank and the account used to hold the church's mortgage payments is called a "sinking fund" account.  Whenever interest or principal payments are due to be paid to investors, the Trustee (acting in the capacity of Paying Agent) automatically pays investors their  scheduled principal and interest payment.  Also, so long as there are bonds that have not matured, the Trustee monitors the church's payments and continues paying investors until the church has fully repaid each and every investor.

Are Church Bonds safe investments?

All investments have risks and the performance of any investment cannot be guaranteed.  However, we have underwritten hundreds and hundreds of churches since 1989 and have a long record of successes.  It is important to remember First Mortgage Church Bond offerings are secured with recently appraised real estate collateral.  Our reputation with investors and churches across America was earned by carefully evaluating each church and consistently employing proven financing principles and practices before underwriting ANY Church Bond offering.  To familiarize yourself with some of the typical risks associated with Church Bonds, we have included a section on our website called "Risks".  To learn of the risks for any specific Church Bond offering, always read the prospectus!

In what amounts are Church Bonds sold?

Bonds are typically sold for $1,000 or multiples of $1,000.  However, to help anyone get  started investing in Church Bonds, bonds we underwrite can be purchased for as little as $250 or in multiples of $250.

Do I pay a commission when purchasing a Church Bond?

Investors do NOT pay a commission when purchasing Church Bonds.  This means every cent of your investment earns interest from the day you purchase your bonds!  Any commission or fee that may be charged pertaining to your investment is paid by the issuing church.

How long must I invest my money?

With few exceptions, Church Bonds are offered with multiple maturity dates called "serial maturities".  Maturities normally begin at six months and extend in six-month intervals thereafter.  Investors have the option to select any maturity date or several maturity dates from six months to 25 years or whatever the time span for the bond offering happens to be.  Some bond offerings are for 10 years, others 15 years, while most are 25 years.  Typically, investors spread their investment over various maturities.

What determines the interest rate I earn?

Unlike many investments, the interest rate you earn on Church Bonds has nothing to do with the AMOUNT of money you invest!  Church Bonds do not discriminate.  Small investments can earn the same rate as large investments!  Since Church Bonds are offered with serial maturity dates, you will find the longer maturities pay a higher rate of interest.  Because of this nice little feature, you have the option of picking your interest rate.  For example in any specific bond offering, the interest rate offered on a 1-year bond will be less than on a 7 1/2-year bond.  Likewise, a 20-year bond will pay an even higher interest rate.  Therefore, YOU determine the interest rate you would like to earn depending upon your investment goals and bond availability.

Will the interest rate on my bond vary?

No. Each Church Bond has a fixed interest rate and a stated maturity.  Interest payments on simple interest bonds underwritten by Great Nation are typically paid quarterly, but sometimes semi-annually.  No interest payments are paid to investors of compound interest bonds until the bond maturity date.  However, interest is credited and compounded on these bonds semi-annually.

How do Church Bond yields compare with yields offered on other types of investments? 

Generally speaking, Church Bond yields are higher than yields offered on corporate bonds, CD's or bank savings accounts.  However, when comparing yields you must consider the differences and risks of each investment including the fact Church Bonds are not insured against loss.

How Liquid Are Church Bonds?

Church Bonds are considered illiquid investments by the Securities & Exchange Commission.  However, as a service to our clients, Great Nation buys bonds from clients needing to sell their bonds prior to maturity.  Although we are not an official market-maker for Church Bonds and are under no obligation to purchase any bond prior to its maturity date, we have conducted this service for years and intend to continue indefinitely.  Selling your Church Bonds in this manner is called trading on the Secondary Market.

There are costs and risks associated with secondary transactions and some of these are discussed in our prospectus.  More times than not, any quotation we provide is marked down five percent (5%) of the current value of the bond to cover our costs.  This mark down can be higher, lower or could be substantial, depending upon market conditions and other factors present at the time of the transaction.  Our licensed securities agents are available to explain these as well as other considerations to you.

Can I invest my IRA or SEP in Church Bonds?

Absolutely!  The IRS has determined Church Bonds are qualified investments for your IRA, SEP and various other types of retirement accounts.  If your current IRA trustee can not assist you in acquiring Church Bonds for your retirement account or simply refuses, we will help you set up an IRA with any number of IRA trustees experienced in handling Church Bonds for their clients.