|
Frequently Asked Questions about The Development Fund
Why should I invest in the Fund?
The more money the Fund has available to loan, the more the Fund is able to help United Methodist Churches, agencies, and missions across the conference thrive and grow. The Fund frequently has more requests for loans than it has money to lend. By investing in the Florida United Methodist Development Fund you can help the Church and earn interest on your investment at the same time.
Back to Top
How does the Fund work?
The Fund accepts investments from individuals, Churches, and organizations across Florida. The Fund pays these investors a set rate of interest. Then the Fund makes loans to Churches, agencies, and missions in the Florida Conference. The interest paid to investors is usually as high as or higher than they could get with a similar investment in a commercial bank or money market. The interest paid by Churches which have borrowed money is usually as low as or lower than they would be charged by commercial lenders. Since the Fund is a non-profit, service organization, the goal is not to make money from this transaction but rather to bring investors and borrowers together in the most efficient and effective way for the benefit of God's work through the Church here in Florida.
Back to Top
What interest rate will I receive on my investment?
As of January 1, 2007, the interest rate paid is 5%. Interest is paid quarterly and is earned from the day of deposit to the day of withdrawal. The interest rate paid to investors is subject to quarterly adjustment by the Foundation's board of directors. The current interest rate has been in effect since Oct. 1, 2006.
Back to Top
Does the interest rate change?
The interest rate is reviewed quarterly by the Fund's Board of Directors and may be adjusted. If you would like to see a recent history of the interest rates paid on investments, click here.
Back to Top
Is the interest tax free?
Interest paid by the Fund is taxable as income by the Federal Government. The interest paid to you each year will be reported on form 1099-INT. Investments in the Fund, however, are exempt from Florida's intangible tax.
Back to Top
When will I receive the interest earned on my investment?
Interest is paid quarterly. Interest is earned from the day of deposit to the day of withdrawal. Interest can be paid to you in a check or reinvested in the Fund. You may withdraw your investment at any time and receive all interest earned to date.
Back to Top
When can I withdraw my investment?
You may withdraw your investment anytime. There is never a penalty, a fee, or a loss of interest when withdrawing funds. There is no minimum length of time required for investments. Interest is earned from the day of deposit to the day of withdraw.
Back to Top
What is the minimum amount required to invest in the Fund?
The minimum initial investment is $100. Additional investments are accepted in any amount.
Back to Top
Are there any fees or charges for investing in the Fund?
No, there are no fees, charges, or penalties for investing in or withdrawing from the Fund.
Back to Top
Can I write checks on my account or request a withdrawal over the phone?
No, the Fund does not operate like a checking account and telephone withdrawals are not permitted. All requests for withdrawal must be in writing. Withdrawal requests are processed promptly and a check is mailed to the investor.
Back to Top
To whom does the Fund loan money?
The Fund makes loans to United Methodist churches, agencies, and missions in the Florida Conference. For a list of loans recently made by the Fund, click here. For information on how to apply for a loan click here.
Back to Top
Does the Fund make loans for such things as remodeling buildings, making improvements to parsonages, or buying land?
Yes, the Fund makes loans to Florida United Methodist Churches, agencies and missions for these and many other purposes. The loan must be secured by a Church building or property and there are other requirements. For more information, contact the Fund's offices or click here
Back to Top
Do Churches ever fail to repay a loan from the Fund?
No loan of the Fund has ever failed to be repaid in full. Loan applications go through a careful process to ensure that the Church, agency, or mission is capable of making the loan payments and committed to repaying the loan in full. Furthermore, all loans are secured by a first mortgage on a building or property.
Back to Top
Has the Fund ever had to foreclose on a Church property to gain repayment of a loan?
No, the Fund has never foreclosed on any property. Every loan the Fund has ever made has been repaid in full or is currently being repaid in full including interest due.
Back to Top
Does the Fund make grants or provide no-interest loans?
No, the Fund does not give away money or provide no-interest loans.
Back to Top
Does the Fund ever make unsecured loans?
No, all loans are secured by a first mortgage on land or a building of equal or greater value than the loan.
Back to Top
Does the Fund make loans to new Churches for buying their first piece of land or building their first building?
Yes, the Fund makes loans to Florida United Methodist Churches, agencies and missions for these and many other purposes. The loan must be secured by a Church building or property and there are other requirements. For more information, contact the Fund's offices or click here
Back to Top
Is my investment guaranteed?
Investments are not FDIC guaranteed. Investments are secured by the assets of the Fund and the first mortgages of the Churches, agencies and missions borrowing funds. Money not yet loaned as well as cash reserves are held by the Fund in insured accounts.
Back to Top
Have investors in the Fund ever lost money?
No investor has ever lost any part of their investment in the Fund. Furthermore, the Fund has always paid the promised interest in full and on time.
Back to Top
Would I owe Florida State intangible tax on these investments?
All investments and reinvestments in the Fund are exempt from Florida's intangible tax. The interest paid on investments, however, is not exempt from federal income tax.
Back to Top
How large is the Fund?
As of first quarter 2007, the Fund's assets are approximately $83 million.
Back to Top
How old is the Fund?
The Fund was organized in June, 1976, and has been in continuous operation since.
Back to Top
Is the Foundation a not-for-profit organization?
Yes, the Foundation is a registered 501(c)3 organization. Through the Developemnt Fund, its purpose is to provide a service, connecting investors and borrowers for the benefit of the United Methodist Church in Florida. The Fund seeks investments, not gifts, but gifts to the Foundation are tax deductible to the full extent allowed by law. Investments in the Fund are exempt from Florida intangible tax while interest paid by the Fund is subject to federal income tax.
Back to Top
Can I receive a higher rate of interest from the Fund by investing a large amount of money or by agreeing not to withdraw my investment for a long period of time?
No, all investors in the Fund, regardless of the amount invested or the length of time the money remains invested, earn the same interest rate. The interest rate is usually as high or higher than similar commercially available rates for demand money, that is money which can be withdrawn at any time without penalty or fee.
Back to Top
Do I have to be a member of a United Methodist Church to invest?
No, you do not have to be United Methodist in order to invest but you do have to reside in the State of Florida. Individuals, groups, companies, Churches, and other organizations are all eligible to invest.
Back to Top
Is the Fund audited?
The Fund is audited every year by an independent, outside CPA firm. Copies of the most recent audit are included in the Fund's report to the Florida Annual Conference and are available upon request.
Back to Top
Does the value of my investment fluctuate like investments in the stock market?
No, the value of your investment is designed to remain constant and earn a set rate of interest. Your investment is not guaranteed by a federal agency or other organization. Your investment is secured by the assets of the Fund and the first mortgages of Churches, agencies and missions borrowing funds. Money not yet loaned as well as cash reserves are held by the Fund in insured accounts.
Back to Top
Can I request that my investment be made available as a loan to my Church?
No, all money invested in the Fund is pooled together. No investor's money is linked to any specific loan. More money invested in the Fund, however. increases the Fund's ability to make loans, perhaps including a loan to your Church.
Back to Top
Does the Fund accept gifts?
The Fund seeks investors rather than donors. But if you would like to make a gift, the Foundation is a 501(c)3 non-profit organization and so gifts are tax deductible to the full extent allowed by law. Gifts become a permanent part of the Fund, strengthening its ability to make loans.
Back to Top
How do I invest?
You must first receive and review an Offering Circular. Information on how individuals and organizations can invest is included in the Offering Circular. To obtain an Offering Circular contact the Fund's offices.
Back to Top
Revised: October 23, 2006
|
