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Frequently Asked Questions
1. What Is the Texas District Church Extension Fund?
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The Texas District Church Extension Fund is a
ministry which facilitates the partnership between investors and Texas District
congregations in expanding His kingdom. It is a savings fund for investors and a
loan fund from which congregations in the Texas District can borrow for property and/or
facilities. These funds are also used for the purchase of new mission sites. |
2. What Kinds of Savings Plans Are Available For Investors Through The
Church Extension Fund?
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A. Save-By-Mail - any amount, in and
out privileges,
*2.500% interest compounded quarterly (
2.52% annual percentage yield) and added to the account. |
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B. Notes: |
One year |
$ 500 minimum |
*3.500% interest rate |
3.55% annual percentage yield |
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Three year |
$ 500 minimum |
*3.750% interest rate |
3.80% annual percentage yield |
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Five year |
$ 500 minimum |
*4.000% interest rate |
4.06% annual percentage yield |
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*Subject to change |
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Interest is compounded quarterly and added to
the principal, or paid quarterly, semi-annually, or annually. Penalty for early
withdrawal is loss of 90 days' interest for the one and three year notes and 180 days'
interest for the five year notes. Any withdrawal which reduces the note balance
below the minimum requirement, thereby changing the term or rate of earnings, shall be
considered a withdrawal of the entire balance and shall be subject to the penalty
described. |
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C. Individual Retirement Account (IRA)
- Offers excellent earnings and is tax-deferred until withdrawal for those who qualify. You may transfer an existing
IRA to LCEF. With a minimum $100 investment, LCEF offers a savings certificate IRA
(similar to a passbook savings account) with a fixed interest rate. For IRAs over
$1,000, you may choose either a 30 or 60 month Term Note with an interest rate based on
the Floating Money Market Rate. The rates for both fixed and floating IRAs change
quarterly. For IRA current rates call Lutheran
Church Extension Fund in St. Louis
at: 1-800-843-5233. |
3. How Safe Are Investments In The Church Extension Fund?
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Church Extension is administered on a sound
financial basis, with adequate reserves maintained to assure prompt payment of
obligations. CEF loans are generally secured by mortgages on properties in Texas.
The strength of CEF is directly related to the size of its capital fund, which
currently exceeds $21,000,000. |
4. May More Than Two People Open A Joint Account?
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Yes. As many names as desired may be
used in establishing a joint tenancy. The important thing is that the holders
understand the meaning of a joint account. |
5. Can A Name Be Added To A Joint Account After It Is Opened?
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Yes. A name can be added to a joint
account. The Texas District Office should be notified concerning this matter.
The existing promissory note must be surrendered and a new note (with the
same interest rate and maturity date) will be issued to reflect the new
owner.. |
6. Which Owner, On A Joint Account, Is Required To Give His Social
Security Number?
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We ask for the tax
identification numbers of all investors. TexasCEF will report
interest earned to the IRS using the tax identification number of the
owner listed first on the account. |
7. Does CEF Report Earnings To The Internal Revenue Service?
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Yes. The investors will be issued a combined
year-end statement and Form 1099 showing the reportable interest. |
8. Must A Person Report Interest In The Case Of Term Notes Where The Actual Interest
Is Not Paid By Check But Is Compounded And Paid At Maturity?
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Yes. It must be reported annually and a Form
1099 will be mailed annually to each note holder. |
9. Will A Term Note Continue To Earn Interest After Maturity?
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Yes. Once a term note reaches the maturity
date it is automatically renewed at the then prevailing rates unless surrendered for
redemption. |
10. Can A Term Note Be Redeemed At Any Time?
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Yes. Although on term notes submitted for
redemption prior to maturity, CEF will charge a penalty for early withdrawal. |
11. What Happens To The Funds In An "Individual" Account Should That Person
Die?
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The money becomes a part of the
investor’s estate and would be subject to probate along with the balance of the
their assets. |
12. How Does A Congregation Become Involved In The Stamp Program?
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Stamps are available to the congregations on
consignment. The congregation must first complete the Consignment form and send it to the
Texas District Office before stamps can be sent to the congregation. The children then
purchase their stamps through the congregation. |
13. How Does A Child In The Stamp Program Open An Account With CEF?
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When $20 worth of stamps have been purchased
and a stamp folder is full, the appropriate information needs to be filled out on the
stamp folder. The stamps and form should be mailed to the Texas District Office. A
Save-By-Mail account will then be opened in the child’s name, with the parent as
guardian. |
14. Once The Beneficiary (Minor) On The Account Reaches The Age Of 18, Does he
Automatically Receive The Funds In His Account?
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No. The custodian would have to make
arrangements with the District Office to have the account changed to the name of the
individual. |
15. May A Minor Purchase A Term Note?
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Yes, a term note may be secured in the name
of the minor. Usually it is issued to a parent serving as custodian for the minor under
the Uniform Gifts to Minors Act in the state of the owner’s residence. |
16. When Are The Checks Issued on Term Notes?
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Interest on all term notes is paid either
quarterly, semi-annually, or annually, or it can be accrued. |
17. Who Can Make Investments In The Church Extension Fund?
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Anyone who is a member of, contributor to, or
participant in The Lutheran Church–Missouri Synod or any congregation of the Synod
may invest his or her savings in the Fund. Any congregation or auxiliary organization of
The Lutheran Church–Missouri Synod may open an account or acquire a note and invest
its reserve funds, savings, building funds, or dormant funds in the Church Extension Fund
program. Parents are encouraged to invest the savings of their children in the Fund to
show them at an early age how they can help build to the glory of Christ through Church
Extension. |
18. How Many Signatures Are Required In the Case Of A Withdrawal From An Account Or
Redemption Of A Note?
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The signature(s) of the registered owner(s)
is required for withdrawal and redemption. In the case of an organization, it would depend
on the respective organization’s resolution pertaining to who has the authority to
withdraw. |
19. If An Individual Wishes To Make A Partial Or Total Withdrawal From A Save-By-Mail
Account, Is Advance Notice Necessary?
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Advance notice is usually not required.
TexasCEF usually processes withdrawal requests within 72 hours of their
receipt.. |
20. What Connection Is There Between CEF's Program And The District’s Mission
Program?
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The Texas Board of Mission Administration and
Church Extension Fund are partners. As our District identifies areas ripe for harvest and
opens new mission stations, Church Extension is there to make available the funds needed
to provide facilities where the Gospel can be preached and taught. CEF supports the
Mission through investment. CEF enables our mission in the Texas District to continue to
move forward. |
21. For What Length Of Time Does A Congregation Receive A CEF Loan?
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Loans to congregations are written for terms
up to 30 years. Interest rates and monthly payment amounts are subject to change every
three years. |
22. Under What Conditions May Congregations Borrow From This Fund?
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A. Newly formed congregations may receive a
loan rate of 4.50%. This special rate is generally available during the first six years of
the loan’s term. Loan rates are set by the BCE and approved by the Texas District
Board of Directors. The congregation is asked to solicit 30% of the net value of the loan
in supporting investments B. Self-supporting
congregations may receive a loan rate of 5.50%. Loan rates are set by the BCE and approved
by the Texas District Board of Directors. The congregation is asked to have 35% of the net
value of the loan in supporting investments.
C. Specialized ministries can also borrow from the CEF.
Terms and conditions for these loans are set by BCE in consultation with BMA. These
ministries are asked to have 30% of the net value of the loan in supporting investments. |
23. What Are The Provisions For Maintaining The Supporting Investments Requirements?
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During the time a congregation has a CEF loan
supporting investments must equal 30/35% of the unpaid balance of the loan. This means
that if one of the investors wished to withdraw his money, and such withdrawal would bring
the supporting investments below the 30/35% requirement, the congregation is responsible
for finding a substitute investor. Congregations who do not have sufficient supporting
investments are subject to an interest surcharge which would raise the interest rate by 1%
if supporting investments are not within 90% of the requirements and by 2% if not within
75% of requirements. |
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