“Self-funding” is the Orchard Alliance term for allowing depositors to use their investments to lower the interest rate on a designated church loan. This program provides a way for individuals to put their personal investments to work for a church they wish to support.
The following Orchard Alliance investment products may be used for self-funding purposes:
- Investment certificates (with a term of at least one year)
- Missionary Retirement Accounts
- Shell Point accounts
Both new and existing investment accounts may be used to self-fund loans.
Self-funded interest rates are determined by:
- Calculating the effective interest rate of all designated investments.
- Adding two hundred basis points to this calculated rate.
- Pro-rating the resulting interest rate with Orchard Alliance’s current loan rate, weighting the total principal balance of the investments versus the principal balance of the loan. If the self-funding investments have a combined principal balance equal to or greater than the loan balance, the self-funded rate does not need to be weighted against the loan principal balance.
- Deposits may be voluntarily invested at a rate lower than the published rate, in order to increase the self-funding impact. For any deposit voluntarily invested at zero percent, Orchard Alliance will add only 100 basis points to its self-funding calculation as opposed to 200 basis points.
Self-funding for loans will be reviewed on a monthly basis, and a self-funded rate will be recalculated if any self-funding investments were added or removed.
A self-funded loan interest rate will not be applied to a loan if it is higher than Orchard Alliance’s current loan rate.