1CR-Loans

Self-Funding Rate Discount

“Self-funding” is the DevCo term for allowing DevCo depositors to use their investments to lower the interest rate on a designated church loan. The interest rate set for the term loan can be discounted by investments made in the Fund that are pledged to the Church during the term of the loan as per the Discount to Loan (DTL) Schedule. These may be deposits by the church or by individuals related to the church.  This program provides a ‘Win-Win-Win’ scenario for individuals to make a better than market return on their investment, to make a missional impact by investing in UM church expansion and to put their personal investments to work for a church they wish to support.

The following deposits may be used for self-funding purposes:

Savings, Investment and Retirement certificates where a local church relationship is named (both new and existing investment accounts).

The following schedule shows how the loan interest rate will be lowered, based on deposits with DevCo, according to the following Deposit to Loan (DTL) Schedule:

  • 5 basis points interest rate reduction at 10% DTL
  • 15 basis points interest rate reduction at 25% DTL
  • 25 basis points interest rate reduction at 35% DTL
  • 35 basis points interest rate reduction at 50% DTL
  • 40 basis points interest rate reduction at 65% DTL
  • 50 basis points interest rate reduction at 75% DTL
  • 65 basis points interest rate reduction at 90% DTL
  • 75 basis points interest rate reduction at > 97% DTL

Self-funding for loans are reviewed on a monthly basis, and the self-funding rate will be recalculated if any self-funding investments were added or removed.  Self-funded interest rates are determined by:

  • Calculating the value of all designated investments
  • Comparing the connected investments to the original value of the approved loan.
  • Pro-rating the resulting interest rate with terms outlined in the Loan Commitment Letter and Term Sheet.

For more information on self-funding or on how to get started, please contact us.