When planning a new or expanded church facility, one of the first questions that usually comes up is: What can we afford? This varies from church to church, and may be further altered by conditions relative to borrowing. The most common “rule of thumb” used is as follows:
Pay cash or assets on hand, add to that money you raise in a capital Stewardship campaign (typically figured as two times the annual budget in committed giving over a three year period), add to that the maximum mortgage of three times the Church’s annual budget (exclusive of dedicated missions giving).
In most situations, where there is no initial cash on hand and no debt, this would equal five times the annual budget (assuming that giving is on par with the budget). This does NOT mean that a church can afford a building that costs this much money to construct. Typically a building is only about 60% - 65% of the total project costs that should be budgeted. (see total project costs).
For churches that elect to proceed without the capital Stewardship campaign it is far more difficult to budget potential giving for the project. If you are unsure about the capital Stewardship campaign, please see [LINK].
For some Christians, thinking of a construction loan or mortgage debt for a church is controversial. It is unfortunate that many people who say this are taking a position for the church that they do not follow in their own life. For instance, the vast majority of people who buy a home do so with some form of a mortgage. Additionally, some of the very people who say a church should not borrow for building have an automobile loan. Construction of a building or the purchase of land is an asset with real value that secures the value of the loan. For a more detailed exploration of this topic see John Whitehead’s paper Scriptural Borrowing.

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