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The Co-investment Housing Option for Churches and Pastors
The Co-investment Housing Option for Churches and Pastors
Understanding what could go right and what could go terribly wrong.

In the early 1990s, Jeff Palmberg got an offer he could not refuse.

He and his wife had moved to Connecticut, where Palmberg had accepted a job as a youth pastor. The church wanted them to live nearby. But housing prices were more than they could afford.

So, the church offered to help. The congregation had recently sold off their parsonage and had some extra money in the bank. They offered to let Palmberg and his wife have $50,000 to use for their down payment on their first home.

If they ever sold the house, Palmberg and his wife would pay the funds back, with no interest.

Everyone would win in the end.

“We thought it was the smart thing to do,” he recalled.

Things went fine until Palmberg got a new job right as the housing market tanked. Suddenly the house he and his wife bought for $150,000 was worth $90,000—which was barely enough to pay off their mortgage, with no money left to pay back the church.

“All of a sudden, we thought, What are we going to do?” Palmberg said.

It took four years to sort things out. The Palmbergs borrowed some money from family to help pay the church back and rented their house for years while waiting for the market to rebound.

They eventually sold the house at a short sale, paying about $15,000 to finally get free.

The church had the best intentions, Palmberg said. But in the end, partnering with the church on buying a house set his family behind financially for years.

A complicated process

Buying a home can be a complicated process in any case. When a pastor and church team up, things can go well. Or they can easily become a mess.

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November 30, 2018



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