Twenty Closed Churches Sold on Credit: A Diocese Gets Out of the Mortgage Business

• The Episcopal Diocese of New Jersey sold 20 closed churches on seller-financed mortgages over 15 years
• Buyers were congregations unable to get bank loans
• Two congregations paid off more than $1 million in February
• The bishop said the mortgages had not always been monitored carefully

An Episcopal diocese that sold closed churches on credit to other congregations is ending the practice, The Living Church reported in early 2025.

Over 15 years, the Episcopal Diocese of New Jersey financed the sale of 20 closed church buildings through purchase-money mortgages, lending directly to buying congregations that could not obtain bank loans. The aim was to keep buildings in use as places of worship, avoid long vacancies and costly upkeep, and give the diocese an income. “Taking back mortgages was designed to give the diocese an income stream from those properties,” said chancellor Paul Ambos.

Bishop Sally French acknowledged problems. “We have not always monitored these mortgages carefully. When I started as your bishop, we had nineteen of these mortgages,” she said. She added: “The monies received from the mortgages have been used to support vulnerable congregations through grants.” In February, two congregations paid off their loans, bringing in $1,008,149.18. The report also said $891,000.38 in misdirected funds had been identified and $464,115.38 allocated to restore designated fund balances.

Ann Fleming of the Episcopal Church Building Fund explained why such sales are common: “It’s often easier to sell to another church.”

Seller financing can help a church sell a building that banks will not lend on, and help a younger congregation acquire a home. But it turns the seller into a lender, with the need to track payments, taxes and insurance for years.

Jamaican churches selling property to another congregation on instalments should use a proper mortgage or agreement for sale prepared by an attorney, register the charge, keep payment records and review the account regularly. Buyers should be sure they can meet payments, and both sides should agree what happens if they cannot.

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