Here are some details regarding the Investing Opportunity that we will hear about this Sunday!
A Company Named Security Church Finance Inc. will be issuing the bonds for our loan. This company has been helping churches in this way since 1962.
Church bonds may be purchased with retirement or other investment funds you have available. This enables you to plan for your needs, while helping the church at the same time.
What are church bonds?
Church bonds are certificates of indebtedness issued by churches as nonprofit organizations to provide funds for the acquisition of property, building expansion, or debt retirement. They offer a church an alternative to conventional lending sources.
How does a bond program work?
In an official action, the church votes to issue and sell bonds. The bonds maybe sold to the members and friends of the church, as well as to outside investors. The church uses the proceeds from the bond issue for the purposes set out in the prospectus. Essentially, the church borrows the money it needs from its members and friends, rather than from a conventional lending institution. To the extent that members buy the bonds, the interest the church pays goes to the members.
What is the church's obligation?
The church makes a monthly payment into a “Bond Sinking Fund” account with a Paying Agent. It also promises to keep the property that secures the debt maintained and insured.
What is a Paying Agent?
A Paying Agent is a financial institution, such as a bank or trust company that receives payments from the church, and pays principal and interest to the bondholders as it comes due.
How is the interest paid?
Interest is paid in one of two ways:
(1) Simple Interest Bonds pay quarterly or semiannually by check.
(1) Simple Interest Bonds pay quarterly or semiannually by check.
(2) Compound Interest Bonds pay all interest and principal when the
bond matures. Interest is compounded semiannually.
Is the interest paid on the bonds taxable?
Yes. Income earned on church bonds must be reported as interest income.Simple interest is declared as income in the year received. Interest on compound interest bonds is declared as it accrues each year.
How will I know how much to report?
The Paying Agent will send you an IRS Form 1099 each year, showing you the interest earnings to report on your tax return.
What if I move?
Always notify the Paying Agent if your address changes. Checks, tax forms, and other notices will be mailed to your address of record.
What if my bond is lost, stolen, or destroyed?
Your bond will be registered in “book entry” form on the records ofthe Paying Agent. The Acknowledgement of Book Entry certificate you receive is not negotiable, and is merely provided as a record ofyour investment. You will not need to return it for payment when your bond matures.
When do the bonds mature?
Bonds mature according to a fixed maturity schedule, usually at six-month intervals over a prescribed number of years. Investors get to select the maturity date that best fits their investment needs.
Can I cash my bond any time I choose?
No. The Issuer is not obligated to pay or “cash” a bond until the timeset for its maturity. However, you may sell your bond at any time by finding a person who will buy it at a price agreeable to both parties.You may contact Security Church Finance, Inc. for assistance if you wish to sell your bond.
Can the church pay my bond before it matures?
Yes. The church may redeem any or all of the bonds before maturity by giving fifteen days written notice to the owner.
Can I invest in church bonds through an IRA?
Yes. A Self-Directed IRA will allow you to direct an investment in church bonds. Compound Interest bonds are often selected for this type of tax-deferred plan.
Is my investment secure?
Church bonds are secured by a mortgage on certain real property of the issuing church. Study the prospectus for complete details.
Will I pay a commission when I purchase church bonds?
No. The issuing church pays all commissions and fees. You only paythe actual face value of the bond you purchase.
To learn more about investing in church bonds, contact Security Church Finance, Inc.
Security Church Finance Home Office
14615 Benfer Road • Houston, Texas 77069281-893-1390 • www.churchbonds.com
14615 Benfer Road • Houston, Texas 77069281-893-1390 • www.churchbonds.com
800-231-0373