20199--6/26/2007--CHURCH_LOANS_&_INVESTMENTS

related topics

{loan, real, estate}

{stock, price, share}

{regulation, government, change}

{tax, income, asset}

{debt, indebtedness, cash}

{loss, insurance, financial}

{product, market, service}

{condition, economic, financial}

It may be necessary for us to raise additional funds in order to meet all of our financial obligations and these funds may not be available on acceptable terms or at all. Our master note agreements are due on demand. Demand of a significant amount of these master notes would adversely affect our operations. Interest rate changes may result in the realization of substantially less net income. General economic and financial conditions in mortgage and financial markets may negatively affect our results of operations. There are inherent general risks involved in investing in mortgage loans including risks related to the collateral securing the loan, prior liens, property taxes and costs to enforce the mortgages. Our lending decision is based upon an appraisal of the property to secure the loan which is made prior to the making of the loan. In the event of default, the actual value of the collateral securing the loan may differ. A decline in real estate values will adversely affect the value of our loans, the value of the mortgages securing our loans and the value of our Shares. Our church loans are normally secured by single-purpose properties that may not be readily marketable in the event of default. It is inevitable that some loans will become delinquent and we will not be able to collect the interest on the loan or may even have a loss of principal on the loan. A church loan is normally repaid from contributions by the congregation s members which may vary thereby affecting the congregation s ability to timely meet its obligations. Our mortgage loans are subject to normal credit risks and the loss of the underlying collateral. Interim loans represent a greater risk of loss than a permanent loan that amortizes over the term of the loan. Construction loans offer higher risks of loss due to problems related to construction which may result in a loss to our investment portfolio. Ownership of our shares is restricted somewhat to insure our REIT qualification. Such restrictions could adversely affect the liquidity and marketability of such shares. Changes in federal and local tax laws may adversely affect our operations and the value of our shares. Federal or State law may limit or prevent a change of control even if a change of control would increase our ability to operate more profitably. There is no assurance that a shareholder can sell their shares since there is a limited trading market for our shares. We face significant competition in providing financing to churches and other non-profit entities which may make it difficult to obtain quality mortgage loans in which to invest. Although we primarily invest in mortgage loans to churches, we are not prohibited from investing in other assets normally allowed for investment by a real estate investment trust. The risks and the general illiquidity of real estate investments may prohibit us from disposing of certain investments in response to changes in economic and other conditions. Environmental compliance costs and liabilities relating to the real estate securing our loans may adversely affect our results of operations. We are not currently supervised or regulated by any federal or state agency.

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20199--6/26/2007--CHURCH_LOANS_&_INVESTMENTS_TRUST