S-11

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-11

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933

OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

American Church Mortgage Company

(Exact name of registrant as specified in governing instruments)

10237 Yellow Circle Drive

Minnetonka, Minnesota 55343

(952) 945-9455

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Philip J. Myers, President

10237 Yellow Circle Drive

Minnetonka, Minnesota 55343

(952) 945-9455

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Philip T. Colton, Esq.

Winthrop & Weinstine, P.A.

225 South Sixth Street, Suite 3500

Minneapolis, Minnesota 55402

(612) 604-6400

Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: [X]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_]	Accelerated filer [_]
Non-accelerated filer [_] (Do not check if smaller reporting company)	Smaller reporting company [X]
	Emerging growth company [_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act .. [_]

CALCULATION OF REGISTRATION FEE
Title Of Each Class Of Securities To Be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price	Amount Of Registration Fee
Series E Secured Investor Certificates	10,000	$1,000(1)	$10,000,000	$1,159.00

(1)Certificates may be purchased in any multiple of $1,000.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Filed Pursuant to Rule 424(b)(2)
Registration No. 333-197326

PROSPECTUS

	American Church Mortgage Company
	$10,000,000 of Series E Secured Investor Certificates

American Church Mortgage Company has operated as a real estate investment trust or “REIT” since its commencement of operations in 1996. We make mortgage loans to churches and other non-profit religious organizations. We also purchase mortgage secured bonds issued by such organizations.

We are offering our Series E Secured Investor Certificates.

This is a best efforts offering. The underwriter is not required to sell any specific number or dollar amount of securities but will use their best efforts to sell the securities offered.

We may offer new certificates with the following maturities: five (5) to fifteen (15) years. Depending on our capital needs, certificates with certain terms may not always be available. We will periodically establish and may change interest rates on the unsold certificates offered in this prospectus. Current interest rates can be found in the “Description of the Certificates” section of this prospectus. Investors are advised to check for prospectus supplements as interest rates are subject to change. However, once a certificate is sold, its interest rate will not change during its term.

The certificates are non-negotiable and may be transferred only in limited circumstances with the consent of our advisor. There is no public market for the certificates. The certificates will not be listed on any securities exchange. Our investors may have difficulty selling certificates prior to their scheduled maturity dates.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The certificates are not “Certificates Of Deposit” or similar obligations and are not guaranteed by the FDIC or any other governmental fund or private entity. Investing in certificates involves risks and conflicts of interest. See “Risk Factors” beginning on page five (5) and “Conflicts of Interest” beginning on page thirteen (13). Those risks include the following:

· If we fail to maintain our REIT status, we will be taxed as a corporation, which could adversely affect our ability to make debt service payments to holders of certificates.

· We have conflicts of interest with the underwriter and our advisor, which are under common management.

· You may have difficulty selling your certificates because there is no public market and our advisor must approve all transfers of certificates.

· Our mortgages and bonds are secured by church property, which is typically special limited use collateral.

· The use of forecasts in this offering is prohibited. Any representations to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax consequence which may flow from an investment in this program is not permitted.

Series D Secured Investor Certificates	Price to Public	Selling Commission and Offering Expenses (2)	Proceeds to Us
Minimum Purchase	$1,000 (1)	$48.50	$952
Total	$10,000,000	$485,000	$9,515,000
_______________________

(1) Certificates may be purchased in any multiple of $1,000.

(2) Assumes the sale of all certificates offered hereby, of which there can be no assurance. Estimated for purposes of this table based on a 2.75% underwriter’s commission, a 0.75% underwriter’s management fee, a $60,000 non-accountable expense fee payable to the underwriter, and $75,000 in other offering expenses.

(3) See the Plan of Distribution section of the Registration Statement for additional details.

AMERICAN INVESTORS GROUP, INC.

Minnetonka, Minnesota

September XX, 2017

AMERICAN CHURCH MORTGAGE COMPANY
Minnetonka, Minnesota

Table of Contents

PROSPECTUS SUMMARY	1
RISK FACTORS	6
WHO MAY INVEST	12
USE OF PROCEEDS	13
COMPENSATION TO ADVISOR AND AFFILIATES	13
CONFLICTS OF INTEREST	14
DISTRIBUTIONS	17
CAPITALIZATION	19
SELECTED FINANCIAL DATA	20
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
OUR BUSINESS	28
MANAGEMENT	49
EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS; DIRECTOR COMPENSATION	52
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	52
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	53
THE ADVISOR AND OUR ADVISORY AGREEMENT	53
MATERIAL FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE CERTIFICATES	55
QUALIFICATION AS A REIT FOR FEDERAL INCOME TAX PURPOSES	56
ERISA CONSIDERATIONS	57
DESCRIPTION OF CAPITAL STOCK	58
DESCRIPTION OF THE CERTIFICATES	59
SUMMARY OF THE ORGANIZATIONAL DOCUMENTS	65
PLAN OF DISTRIBUTION	67
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	69
LEGAL MATTERS	69
EXPERTS	69
ADDITIONAL INFORMATION	69
INDEX TO FINANCIAL STATEMENTS	F-i

PROSPECTUS SUMMARY

This summary highlights some information from the prospectus. It may not be all the information that is important to you. To understand this offering fully, you should read the entire prospectus carefully, including the risk factors and the financial statements. In this prospectus, American Church Mortgage Company refers to itself as “we,” “us,” and “our.” Our prospective investors are sometimes referred to as “you” or “your.”

American Church Mortgage Company

American Church Mortgage Company operates as a real estate investment trust, or REIT. We make mortgage backed loans from $100,000 to $2,000,000 to churches and other non-profit religious organizations for the purchase, construction/interim or refinancing of real estate and improvements. As of June 30, 2017 we had sixty-one (61) first mortgage loans outstanding aggregating $24,905,098 in principal amount, three (3) second mortgage loans totaling $225,881 in principal amount and a first mortgage bond portfolio with par values aggregating $13,504,616. We intend to continue to lend funds pursuant to our business plan as funds from the sale of our securities become available and as funds become otherwise available, for example through the repayment of loans.

American Church Mortgage Company was incorporated in the State of Minnesota on May 27, 1994. Our executive offices and those of our advisor are located at 10237 Yellow Circle Drive, Minnetonka (Minneapolis), Minnesota 55343. Our telephone number is (952) 945-9455.

Our Advisor

We are managed by Church Loan Advisors, Inc. Church Loan Advisors, Inc. is referred to in this prospectus as our advisor. Church Loan Advisors has served as our advisor since 1994. Our advisor manages our business activities, provides our office space, personnel, equipment and support services. Our advisor assumes most of the normal operating expenses we would otherwise incur if we had our own employees and directly managed our business activities. Pursuant to the advisory agreement between us and our advisor, we pay our advisor advisory fees based on our average invested assets and certain expenses. In addition, our advisor receives up to one half of any origination fees associated with a mortgage loan made or renewed by us. Our advisor is affiliated by common ownership with American Investors Group, Inc., which is the underwriter of this offering (the “Underwriter”).

More Information

We have filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) with respect to the Secured Investor Certificates to be issued in the offering. This prospectus is a part of that registration statement.

The registration statement is, and all of our filings with the SEC (some of which include our financial statements) are, available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You can also access many of the documents that are referred to in this prospectus at the web site we maintain at http://www.church loans.net under the heading “Regulatory Filings.”

The Certificates Offered

Issuer	American Church Mortgage Company
Trustee	Herring Bank, Amarillo, Texas
Securities Offered	Series E Secured Investor Certificates
Offering Price	100% of the principal amount per certificate; multiples of $1,000 per certificate.
Maturity	5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 year maturities.  Each certificate will mature on the anniversary of the last day of the fiscal quarter in which the certificate is purchased.  We may cease offering specified maturities, and begin re offering any unavailable maturity, at any time.
Interest Rates	As of the offering date, the interest rates we will pay for each maturity of certificates are set forth in the section entitled “Description of the Certificates” to this prospectus.  However, investors are advised to check for prospectus supplements as interest rates are subject to change.
Interest Payments	Interest will be paid quarterly to certificate holders.

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Principal Payment	Unless you renew your certificate, we will pay the entire principal amount of the certificate at maturity.
Redemption	We generally will not be required to redeem outstanding certificates prior to maturity.  We may redeem outstanding certificates in the following cases:
	In our sole discretion, at any time upon 30 days’ notice.
	If you die, your representative may require us to redeem your certificate, subject to an aggregate limit of $25,000 in any calendar quarter for all redemptions.
	If we terminate our advisory agreement with Church Loan Advisors, Inc., our current advisor, for any reason, we will be required to offer to redeem all outstanding certificates (but are permitted to redeem fewer than all).
	If we redeem any certificate, we will pay the holder an amount equal to the outstanding principal amount of the redeemed certificate plus accrued but unpaid interest.
Collateral	To secure payment of the certificates, we will assign to the trustee as collateral non defaulted mortgage secured promissory notes and church bonds with an aggregate outstanding principal balance equal to at least 100% of the aggregate outstanding principal amount of the certificates.  We may, in our discretion, substitute cash or cash equivalents.  Unless there is an event of default, we will not assign underlying mortgages securing the assigned promissory notes.  To the extent not collateralized, the certificates will constitute a subordinated claim against the issuer.
Renewal	Certificates are renewable at your option at the interest rates we are offering at the time the certificate matures.  We may charge a fee not to exceed 1.25% on renewals.  We may cease offering to renew certificates at any time.
Transferability	The certificates are non-negotiable and may be transferred only in limited circumstances with the consent of our advisor.
Absence of Public Market	There is no market for the certificates.  We do not believe that a public market will develop.  You may not be able to sell your certificates.
Sales Commission, Fees	We will pay the underwriter a commission for assisting us in selling the certificates.  The underwriter will receive a sales commission of up to 2.75% and an underwriting management fee equal to 0.75% of the principal amount of certificates sold.  In addition, we will pay to the underwriter a non-accountable expense fee of up to $60,000, as further described herein at the section entitled “Use of Proceeds” and offering related costs that we incur including legal and registration fees up to $75,000.
Outstanding Indebtedness	Our bylaws prohibit us from borrowing in excess of 300% of Stockholders’ equity, except under certain circumstances.
	At June 30, 2017, the Company had $12,764,000 worth of Series B Secured Investor Certificates outstanding, $6,734,000 worth of Series C Secured Investor Certificates outstanding and $7,965,000 worth of Series D Secured Investor Certificates outstanding.

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Use of Proceeds

We will use the proceeds received from the sale of the certificates principally to fund mortgage loans we make to churches and other non-profit religious organizations and to purchase bonds issued by those organizations. Some of the proceeds may be used to redeem our equity securities and repay maturing certificates.

Our REIT Status

The Company was formed as a Real Estate Investment Trust (“REIT”) in 1994 and began active operations in 1996. As a REIT, we generally are not subject to federal income tax on income that we distribute to our Stockholders. Under the Internal Revenue Code, we are subject to numerous organizational and operational requirements, including a requirement that we distribute to our Stockholders at least 90% of our taxable income as calculated on an annual basis. If we fail to qualify for taxation as a REIT in any year, our taxable income will be taxed at regular corporate rates, and we may not be able to qualify for treatment as a REIT for that year and the next four years. Even if we qualify as a REIT for federal income tax purposes, we may be subject to federal, state and local taxes on our income and property and to federal income and excise taxes on any undistributed income.

Risk Factors

An investment in our certificates involves a degree of risk. See “Risk Factors” for a more complete discussion of factors you should consider before purchasing certificates. Some of the significant risks include:

· As a “best efforts” offering, all or a material amount of the certificates may not be sold, and consequently, some or all of the additional funds we are seeking may not be available to us.

· As a “no minimum” offering, there is no minimum number of principal amount of certificates that must be sold. We will receive the proceeds from the sale of certificates as they are sold.

· If we fail to maintain our REIT status, we will be taxed as a corporation, which could adversely affect our ability to make debt service payments to holders of certificates.

· Conflicts of interest with the underwriter and our advisor in connection with this offering and our on-going business operations could affect decisions made by our advisor on our behalf.

· There is no public trading market for the certificates. It is not likely that a market for the certificates will develop after this offering.

· Fluctuations in interest rates or default in repayment of loans by borrowers could adversely affect our ability to make interest payments on and repay certificates as they mature.

Conflicts of Interest

A number of potential conflicts exist between us and our advisor and its principals. These conflicts include:

· Our President owns and is the President of both our advisor and the underwriter and thus controls both entities. Our President was formerly our Chief Financial Officer and Treasurer.

· Our Chief Financial Officer and Treasurer is Chief Financial and Operations Officer of the underwriter and a Vice President of our Advisor and thus is in a position of control of both entities.

· The underwriter for this offering and our advisor are also under common control.

· Agreements between us and our advisor and the underwriter were not negotiated at arm’s length.

· We and the underwriter have common business interests.

· Negotiations between us and our advisor during the organization and structuring of our operations were not at arm’s length.

· The advisory agreement was not negotiated at arm’s length, but is subject to annual renewal by our board of directors.

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· We share operations facilities with our advisor and the underwriter.

Our advisor and its affiliates may engage in businesses similar to ours. We compensate our advisor and its affiliates for services rendered and pay an annual advisory fee of up to 1.25% of average invested assets and up to one half of any origination fee charged to borrowers on mortgage loans made by us.

Our Investment Objectives

Our investment objectives are to provide our certificate holders with:

· a higher level of distributable income or interest rate than is available in guaranteed or government backed fixed income investments;

· preservation of their investment capital through portfolio diversification (lending funds to many different borrowers and purchasing bonds issued by numerous issuers);

· greater security for our portfolio through investment only in mortgage backed loans and securities (providing us with collateral in the event of a borrower’s default); and

· greater security for our certificate holders by our pledging mortgage secured promissory notes or debt securities that we hold to secure our obligations under the certificates (providing certificate holders with a stream of revenue and potential sale proceeds in the event of our default).

Business Objectives and Policies

We make mortgage loans from $100,000 to $2,000,000 to churches and other non-profit religious organizations throughout the United States. We seek to:

· find qualified borrowers and make loans in accordance with our Lending Guidelines;

· lend at rates of interest in excess of our cost of funds;

· offer competitively attractive mid-term (3-15 years) loans and long-term (20-30 year) loans (although there is no limit on the term of our loans);

· charge origination fees (i.e. “points”) from the borrower at the outset of a loan and upon any renewal of a loan;

· make a limited amount of higher interest rate and increased risk second mortgage loans and short term construction/interim loans to qualified borrowers; and

· purchase a limited amount of mortgage secured debt securities issued by churches and other non-profit religious organizations, typically at par value.

Our policies limit the amount of second mortgage loans to 20% of our average invested assets on the date any second mortgage loan is closed and limit the amount of mortgage secured debt securities to 30% of our average invested assets on the date of their purchase. All other mortgage loans we make are secured by a first mortgage (or deed of trust). We may make fixed interest rate loans having maturities of one to thirty years. We may borrow up to 300% of our Stockholders’ equity, unless greater amounts are permitted under certain circumstances.

Lending Guidelines

We follow specified lending guidelines and criteria in evaluating the creditworthiness of potential borrowers. These guidelines and criteria include:

· Loans we make cannot exceed 75% of the appraised value of the real property and improvements securing the loan.

· We may not loan more than $2,000,000 to a single borrower.

· We require appraisals of the property securing our loans.

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· The borrower must furnish us with a mortgagee title policy insuring our interest in the collateral.

· The borrower’s long term debt (including the proposed loan) as of the date of the mortgage loan may not exceed four times the borrower’s gross income for its most recent twelve (12) months.

· The borrower must furnish us with financial statements (balance sheet and income and expense statement) for its last three (3) complete fiscal years and current financial statements for the period within ninety (90) days of the loan closing date. A borrower must have the last complete fiscal year financial statements reviewed by a certified public accountant (CPA) engaged by the borrower and who is independent of the borrower. On loans in excess of $500,000 our advisor may require the last complete fiscal year be audited by a CPA engaged by the borrower and who is independent of the borrower. In lieu of the above requirement, we or our advisor may employ a qualified accountant. The qualified accountant we employ would be required to be independent of the borrower. Our employed qualified accountant would not be independent of us. Compiled financial statements of the borrower are acceptable from our employed qualified accountant. Along with the compiled financial statements of the borrower, our employed qualified accountant would perform partial and targeted review examination procedures for borrowers. On loans in excess of $500,000 the advisor may require partial and targeted audit examination procedures for borrowers.

· Borrowers in existence for less than three (3) fiscal years must provide financial statements since inception. No loan will be extended to a borrower in operation less than two (2) calendar years absent express approval by our board of directors.

Who May Invest

You may purchase up to $5,000 of certificates only if you have either (i) a minimum annual gross income (without regard to your investment in our shares or certificates) of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of $45,000; or (ii) a net worth (determined with the foregoing exclusions) of at least $150,000. You may purchase more than $5,000 of certificates only if you have either: (i) a minimum annual gross income (without regard to your investment in our shares or certificates) of at least $70,000 and a net worth (exclusive of home, home furnishings and automobiles) of at least $70,000; or (ii) a net worth (determined with the foregoing exclusions) of at least $250,000. Suitability standards may be higher in certain states. Please see Exhibit B.

In the case of fiduciary accounts, these minimum standards must be met by the beneficiary of the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds to purchase the shares or certificates if the donor or grantor is the fiduciary.

The underwriter’s account application to be signed by all purchasers of the Series E Secured Investor Certificates contains an arbitration agreement for disputes with the underwriter. By this agreement, each purchaser agrees that all controversies with the underwriter relating to the Certificates will be determined by arbitration before the Financial Industry Regulatory Authority (“FINRA”).

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RISK FACTORS

An investment in our certificates involves various risks. In addition to the other information set forth in the prospectus, you should consider the following factors before making a decision to purchase certificates.

This prospectus contains statements of a forward looking nature relating to future events or our future performance. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about us and our industry. When used in this prospectus, the words “expects,” “believes,” “anticipates,” “estimates,” “intends,” “will” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements of our plans, strategies and prospects contained in this prospectus.

These forward looking statements are only predictions and are subject to risks and uncertainties that could cause actual events or results to differ materially from those projected. The cautionary statements made in this prospectus should be read as being applicable to all related forward-looking statements wherever they appear in this prospectus. We assume no obligation to update these forward-looking statements publicly for any reason. Actual results could differ materially from those anticipated in these forward looking statements.

Risks Related to Method and Terms of This Offering

This is a Best Efforts Offering. The underwriter’s obligation to sell the certificates requires only its best efforts to locate purchasers on our behalf. The underwriter is not obligated to purchase any certificates. Less than all of the certificates offered may be sold. If less than all the certificates offered are sold, we will have less cash for working capital and to loan to churches and other non-profit religious organizations.

This is a No Minimum Offering. The distribution agreement does not require that a minimum number of certificates be sold before we receive proceeds from their sale. We will receive proceeds from the sale of certificates when and if they are sold.

We Will Incur Expenses in This Offering. Expenses incurred in connection with this offering will reduce our assets that will be available for working capital and investment.

Risks Related to Us

Our Failure to Qualify as a Real Estate Investment Trust Could Reduce the Funds We Have Available for Investment. We operate as a real estate investment trust. As a REIT, we are allowed a deduction for dividends paid to our Stockholders in computing our taxable income. Thus, only our Stockholders are taxed on our taxable income that we distribute. This treatment substantially eliminates the “double taxation” of earnings to which many corporations and their Stockholders are subject. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions. To qualify and maintain our status as a REIT, we must meet certain share ownership, income, asset and distribution tests on a continuing basis. No assurance can be given that we will satisfy these tests at all times. Further, the requirements for a REIT may substantially affect day to day decision making by our advisor. Our advisor may be forced to take action it would not otherwise take or refrain from action which might otherwise be desirable in order to maintain our REIT status.

If we fail to qualify as a REIT in any taxable year, then we would be subject to federal income tax (including any applicable minimum tax) on our taxable income computed in the usual manner for corporate taxpayers without any deduction for distributions to our Stockholders. Unless entitled to relief under specific statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. To renew our REIT qualification at the end of such a four year period, we would be required to distribute all of our current and accumulated earnings and profits before the end of the period.

We intend to continue to operate as a REIT. However, future economic, market, legal, tax or other consequences may disqualify us as a REIT or may cause our board of directors to revoke the REIT election. Loss of REIT status from either our disqualification as a REIT or our revocation of REIT status would not affect whether the certificates are classified as debt for federal income tax purposes, the anticipated federal income tax consequences to U.S. Persons who hold the certificates or whether we may deduct interest paid to certificate holders for United States federal income tax purposes. To generate funds with which to pay federal income taxes because of the loss of REIT status, however, could reduce our funds that are available for investment, could cause us to incur additional indebtedness, or could cause us to liquidate investments, each of which could affect adversely our ability to make debt service payments to holders of certificates.

Conflicts of Interest Arise From Our Relationship with Our Advisor and the Underwriter. The terms of transactions involving our formation and the formation of our advisor, and our contractual relationship with our advisor, were not negotiated at

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arm’s length. Our non-independent directors and officers may have conflicts of interest in enforcing agreements between us and our advisor or the underwriter. Future business arrangements and agreements between us and our advisor or the underwriter and their affiliates must be approved by our board of directors, including a majority of our independent directors.

Future Changes in Tax Laws May Affect Our REIT Status. In this prospectus, we discuss our tax treatment as a REIT based on existing provisions of the Internal Revenue Code, existing and proposed regulations, existing administrative interpretations and existing court decisions. New legislation, regulations, administrative interpretations or court decisions may significantly change the tax laws. Therefore, continuing qualification as a REIT may vary substantially from the treatment we describe in this prospectus, which may impact the consequences of purchasing certificates.

Risks Related to the Certificates

We May Incur More Indebtedness. At June 30, 2017, we had $12,764,000 principal amount of Series B Secured Investor Certificates, $6,734,000 principal amount of Series C Secured Investor Certificates and $7,965,000 principal amount of Series D Secured Investor Certificates outstanding. We may incur additional indebtedness in the future. We may assign or pledge some of our mortgage-secured promissory notes or other collateral in connection with incurring this additional indebtedness. Our ability to incur additional indebtedness is limited to 300% of our Stockholders’ Equity by our bylaws. As of June 30, 2017, we can incur $6,443,000 in additional indebtedness, unless an increased amount is approved by a majority of our Independent Directors and disclosed and justified to our Stockholders. Once the threshold is reached (or if approval is not obtained), we will not be able to incur additional indebtedness unless we raise additional equity capital. This limitation could restrict our growth or affect our ability to repay the certificates as they mature.

The Indenture Contains Limited Protection for Holders of Certificates. The indenture governing the certificates contains only limited events of default other than our failure to pay principal and interest on the certificates on time. Further, the indenture provides for only limited protection for holders of certificates upon a consolidation or merger between us and another entity or the sale or transfer of all or substantially all of our assets. The indenture governing the certificates does not prohibit additional indebtedness. While the certificates are secured debt obligations, if the Company takes on additional indebtedness, the Company’s risk of default on the certificates may increase. If we default in the repayment of the certificates or under the indenture, you will have to rely on the trustee to exercise your remedies on your behalf. You will not be able to seek remedies against us directly. The effect of each of these is that recovery of your investment could be difficult if there is a default.

The Company and the Underwriter Have a Limited Track Record with Respect to the Company’s Securities. The Company has engaged in six public offerings of its securities through the underwriter. 2,467,918 shares of common stock were sold between 1996 and 2002 and 1,677,798 shares remain outstanding. $15,000,000, $14,860,000, $7,932,000 and $8,234,000 principal amount of Series A, Series B, Series C and Series D Secured Investor Certificates, respectively, were sold from 2002 to 2017. The Company paid all amounts due under its Series A, Series B, Series C and Series D Investor Certificates in accordance with their terms in cash or renewed into subsequent series certificates if requested by the holder. No Series A Certificates remain outstanding as of June 30, 2017 and $27,732,000 in Series B, Series C and Series D certificates remain outstanding as of August 31, 2017. Past performance is not necessarily indicative of the results that may be expected for the Series E Secured Investor Certificates. Please see the Secured Investor Certificate table in the “Description of the Certificates” section.

There Are Potential Adverse Effects Associated with Lending Borrowed Funds. We intend to deploy the proceeds from this offering to make loans to or purchase bonds issued by churches and other non-profit religious organizations. Lending borrowed funds is subject to greater risks than in unleveraged lending. The profit we realize from lending borrowed funds is largely determined by the difference, or “spread,” between the interest rates we pay on the borrowed funds and the interest rates that our borrowers pay us. Our spread may be materially and adversely affected by changes in prevailing interest rates. Furthermore, the financing costs associated with lending borrowed funds could decrease the effective spread in lending borrowed funds, which could adversely affect our ability to pay interest on and repay the certificates as they mature.

Fluctuations in Interest Rates May Affect Our Ability to Sell Certificates. If the interest rates we offer on certificates become less attractive due to changes in interest rates for similar investments, our ability to sell certificates could be adversely affected or certificate holders could choose not to renew their certificates upon maturity. Since we may rely on the proceeds from the sales of certificates and renewals of certificates, in part, to pay maturing certificates, a decline in sales of certificates could adversely affect our ability to pay your certificate upon maturity. We may change the interest rates at which we are currently offering certificates in response to fluctuations in interest rates.

There Is No Public Market for the Certificates. There is no market for certificates issued by us. It is unlikely that a market will develop. The certificates will not be listed on any exchange. In addition, the market for REIT securities historically has been less liquid than other types of securities. It may be impossible for you to recoup your investment prior to maturity of the certificates.

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There Will Not Be a Sinking Fund, Insurance or Guarantee Associated with the Certificates. We will not contribute funds to a separate account, commonly known as a sinking fund, to repay principal or interest on the certificates upon maturity or default. The certificates are not certificates of deposit or similar obligations of, or guaranteed by, any depository institution. Further, no governmental or other entity insures or guarantees payment on the certificates if we do not have enough funds to make principal or interest payments. Therefore, if you purchase certificates, you will have to rely on our revenue from operations, along with the security provided by the collateral for the certificates, for repayment of principal and interest on the certificates.

The Collateral for the Certificates May Not Be Adequate if We Default. The certificates will at all times be secured by mortgage-secured promissory notes and church bonds having an outstanding principal balance or cash equal to at least 100% of the outstanding principal balance of the certificates. If we default in the repayment of the certificates, or another event of default occurs, the trustee will not be able to foreclose on the mortgages securing the promissory notes and bonds in order to obtain funds to repay certificate holders. Rather, the trustee will need to look to the revenue stream associated with our borrowers’ payments on or repayment of the promissory notes and bonds or revenue derived from sale of the promissory notes or bonds to repay certificate holders. If the trustee chooses to rely on revenues received from our borrowers, certificate holders may face a delay in payment on certificates in the event of default, as borrowers will repay their obligations to us in accordance with amortization schedules associated with their promissory notes or bonds. If the trustee chooses to sell promissory notes or bonds in the event of our default, the proceeds from the sales may not be sufficient to repay our obligations on all outstanding or defaulted certificates.

The Certificates Are Not Negotiable Instruments and Are Subject to Restrictions on Transfer. The certificates are not negotiable debt instruments. Rights of record ownership of the certificates may be transferred only with our advisor’s prior written consent. You will not be able to freely transfer the certificates.

We Are Obligated to Redeem Certificates Only in Limited Circumstances. You will have no right to require us to prepay or redeem any certificate prior to its maturity date, except in the case of your death or if we replace our current advisor. Further, even in the event of your death, we will not be required to redeem your certificates if we have redeemed at least $25,000 of principal amount of Series D certificates for all holders during the calendar quarter in which your representative notifies us of your death and requests redemption.

We Are Able to Redeem Certificates at Any Time. While we are obligated to redeem certificates in limited circumstances, we are permitted to redeem all or a portion of the outstanding certificates at any time upon thirty (30) days’ notice. While we have no current plans to redeem certificates, and possibly may not redeem any prior to maturity (except in the case of death), there is no guarantee that investors will be able to hold their certificates until maturity.

We May Not Have Sufficient Available Cash to Redeem Certificates if We Terminate Our Advisory Agreement with Our Current Advisor. We will be required to offer to redeem all outstanding certificates if we terminate our advisory agreement with Church Loan Advisors, Inc., our current advisor, for any reason. If the holders of a significant principal amount of certificates request that we redeem their certificates, we may be required to sell a portion of our mortgage loan and church bond portfolio to satisfy the redemption requests. Any such sale would likely be at a discount to the recorded value of the mortgage loans and bonds being sold. Further, if we are unable to sell loans or church bonds in our portfolio, we may be unable to satisfy the redemption obligations.

Risks Related to Management

We Are Dependent Upon Our Advisor. Our advisor, Church Loan Advisors, Inc., manages us and selects our investments subject to general supervision by our board of directors and compliance with our lending policies. We depend upon our advisor and its personnel for most aspects of our business operations. Our success depends on the success of our advisor in locating borrowers and negotiating loans upon terms favorable to us. Among others, our advisor performs the following services for us:

· mortgage loan marketing and procurement

· bond portfolio selection and investment

· mortgage loan underwriting

· mortgage loan servicing

· money management

· developing and maintaining business relationships

· maintaining “goodwill”

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· managing relationships with our accountants and attorneys

· corporate management including payment of office rent, etc.

· bookkeeping

· reporting to state, federal, tax and other regulatory authorities

· reports to Stockholders and Stockholder relations

Certificate Holders Will Have No Right to Participate in Our Management. Only debt securities are being offered hereby; investors participating in this offering will not become Stockholders and will have no voting rights and will have virtually no input regarding management of the Company. You should not purchase certificates unless you are willing to entrust our management to our advisor and our board of directors.

Our Directors May Not Be Held Personally Liable for Certain Actions, Which Could Discourage Stockholder Suits Against Them. Minnesota law and our articles of incorporation and bylaws provide that our directors shall not be personally liable for monetary damages for breach of fiduciary duty as a director, with certain exceptions. These provisions may discourage Stockholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by Stockholders on behalf of us against a director. In addition, our bylaws provide for mandatory indemnification of directors and officers to the fullest extent permitted by Minnesota law.

We Have Conflicts of Interest with Our Advisor and the Underwriter. Affiliations and conflicts of interests exist among our officers and directors and the owner and officers and directors of our advisor and the underwriter. Our President, Philip Myers owns and is the President of our advisor and the underwriter and thus controls both entities. Our Chief Financial Officer and Treasurer, Scott J. Marquis is a Vice-President of our advisor and is the Chief Financial and Operations Officer of the underwriter and thus could be considered to be in a position of control of both entities. Our President and the officers and directors of our advisor are involved in the church financing business through their affiliations with the underwriter. The underwriter originates, offers and sells first mortgage bonds for churches. We may purchase first mortgage bonds issued by churches through the underwriter in its capacity as underwriter for the issuing church, or as broker or dealer on the secondary market. In such event, the underwriter would receive commissions (paid by the issuing church) on original issue bonds, or “mark-ups” in connection with any secondary transactions. If we sell church bonds in our portfolio, the bonds will be sold through the underwriter. We would pay the underwriter commissions in connection with such transactions. Generally, mortgage loans we originate are smaller than the bond financings originated by the underwriter. However, there may be circumstances where our advisor and the underwriter could recommend either type of financing to a prospective borrower. The decisions of our advisor and the underwriter could adversely affect the credit quality of our portfolio and decreases to the value of our portfolio could negatively impact the Company’s ability to pay interest on the certificates.

Redemption Obligations Relating to the Certificates May Affect Our Ability to Replace our Advisor. We will be required to offer to redeem all outstanding certificates if we terminate our advisory agreement with Church Loan Advisors, Inc. Our independent directors are required to review and approve the agreement with our advisor on an annual basis. The redemption provision relating to the certificates may have the effect of reducing our ability to replace our current advisor.

Risks Related to Mortgage Lending

We Are Subject to the Risks Generally Associated with Mortgage Lending. Mortgage lending involves various risks, many of which are unpredictable and beyond our control and foresight. It is not possible to identify all potential risks associated with mortgage lending. Some of the more common risks encountered may be summarized as follows:

· low demand for mortgage loans

· interest rate and real estate valuation fluctuations

· changes in the level of consumer confidence

· availability of credit worthy borrowers

· demographic and population patterns

· zoning regulations

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· taxes and tax law changes

· availability of alternative financing and competitive conditions

· factors affecting specific borrowers

· national and local economic conditions

· state and federal laws and regulations

· bankruptcy or insolvency of a borrower

· borrower misrepresentation(s) and/or fraud

Losses Associated with Default, Foreclosure of a Mortgage and Sale of Mortgaged Property Pose Additional Risks. We have experienced losses associated with default, foreclosure of mortgages, and sales of mortgaged properties. The time frame to foreclose on a property varies from state to state, and delays can occur due to backlog in court dockets. We have experienced delays from 12 to 18 months. Such delays have and can cause the value of the mortgaged property to further deteriorate due to lack of maintenance. Theft and vandalism have also occurred on our foreclosed properties. Some borrowers have removed fixtures and furnishings including sound systems, chairs, pulpits, appliances, mechanical and electrical systems prior to vacating the facility which further reduces the value of our collateral. The properties also incur operating expenses pending their sale (property insurance, security, real estate taxes, repairs and maintenance) and these expenses could be substantial if we cannot readily dispose of the property. Expenses related to the foregoing could prevent us from recovering the full value of a loan in the event of foreclosure, which shortfall would decrease the value of assets held by the Company and could negatively impact the Company’s ability to pay interest on the certificates.

Real Estate Taxes Resulting from a Foreclosure May Prevent Us from Recovering the Full Value of a Loan. If we foreclose on a mortgage and take legal title to a church’s real estate, real estate taxes could be levied and assessed against the property since the property would no longer be owned by a non-profit entity. These expenses would be our financial responsibility, and could be substantial in relation to our prior loan if we cannot readily dispose of the property. Such expenses could prevent us from recovering the full value of a loan in the event of foreclosure, which shortfall would decrease the value of assets held by the Company and could negatively impact the Company’s ability to pay interest on the certificates.

Second Mortgage Loans Pose Additional Risks. Our Lending Guidelines allow us to make second mortgage loans. The principal amount of such loans may not exceed 20% of our average invested assets. Second mortgage loans entail more risk than first mortgage loans, as foreclosure of senior indebtedness or liens could require us to pay the senior debt or risk losing our mortgage.

Fixed Rate Debt Can Result in Yield Fluctuations. Fixed rate debt obligations carry certain risks. A general rise in interest rates could make the yield on a particular mortgage loan lower than prevailing rates. This could negatively affect our value and consequently the value of the certificates. Neither we nor our advisor can predict changes in interest rates. We attempt to reduce this risk by borrowing through the issuance of intermediate and long term certificates with set interest rates and making loans with this capital for intermediate and long terms that lock in certain target interest rate spreads. We do not intend to borrow funds or sell certificates if the cost of such borrowing exceeds the income we believe we can earn from lending the funds.

The Mortgage Banking Industry Is Highly Competitive. We compete with a wide variety of lenders, including banks, religious denominations, credit unions, insurance companies, pension funds and fraternal organizations for mortgage loans. Many competitors have greater financial resources, access to lower cost capital, larger staffs and longer operating histories than we have, and thus may be a more attractive lender to potential borrowers.

Fluctuations in Interest Rates May Affect Our Ability to Repay the Certificates. Prevailing market interest rates impact borrower decisions to obtain new loans or to refinance existing loans, possibly having a negative effect upon our ability to originate mortgage loans. If interest rates decrease and the economic advantages of refinancing mortgage loans increase, then prepayments of higher interest mortgage loans in our portfolio would likely reduce our portfolio’s overall rate of return (yield).

We Are Subject to the Risks Associated with Fluctuations in National and Local Economic Conditions. The mortgage lending industry is subject to increased credit risks and rates of foreclosures during economic downturns. In addition, because we provide mortgages to churches and other religious organizations who generally receive financing through charitable contributions, our financial results are subject to fluctuations based on a lack of consumer confidence or a severe or prolonged national or regional recession. As a result of these and other circumstances, our potential borrowers may decide to defer or terminate plans for financing their properties. In addition, during such economic times we may be unable to locate as many credit worthy borrowers. In addition,

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we believe the risks associated with our business are more severe during periods of economic slowdown or recession if these periods are accompanied by declining values in real estate. For example, declining real estate values would likely reduce the level of new loan originations, since borrowers often use increases in the value of their existing properties to support the purchase of or investment in additional properties. Borrowers may also be less able to pay principal and interest on our loans if the real estate economy weakens, which could result in higher default rates. Higher default rates could adversely affect the Company’s results of operations, which could negatively impact the Company’s ability to pay interest on the certificates. Further, declining real estate values significantly increase the likelihood that we will incur losses in the event of default because the value of our collateral may be insufficient to cover our basis in the investment.

The Company Faces Certain Risks and Uncertainties Related to Financing and Liquidity, and These Volatilities Could Have an Impact on its Operations and its Ability to Maintain its Long term Capital Needs and/or Secure Additional Financing. The Company faces certain risks and uncertainties, particularly during volatile market conditions. These volatilities could have an impact on operations to the extent that the Company experiences slower maturities or repayment of mortgage loans, illiquid markets for our bond portfolio, or a higher redemption rates on our Secured Investor Certificates than has been the case historically.

The Company’s operating performance is affected by our ability to earn interest and origination fees in excess of what we pay and to match maturities of our long-term debt with maturities of our mortgage loans and bond portfolio. We may incur additional indebtedness, particularly through the sale of Secured Investor Certificates, but the success of such an offering is uncertain.

Our Business May Be Adversely Affected if Our Borrowers Become Insolvent or Bankrupt. If any of our borrowers become insolvent or bankrupt, the borrower’s mortgage payments will be delayed and may cease entirely. For example, due to difficult economic conditions, church members may have reduced pay or may be unemployed and unable to find new employment. As such, members may make fewer or no contributions to our borrowers, which could result in the borrower’s inability to make mortgage payments or make them on time. In those situations, we may be forced to foreclose on the mortgage and take legal title to the real estate and incur expenses related to the foreclosure and disposition of the property. Such increased expenses paired with possible lower real estate values (having been reduced by the foregoing expenses) could adversely affect our results of operations, which could negatively impact our ability to pay interest on the certificates.

We Have Fluctuating Earnings. As mortgage lenders, we make provision for losses relating to our loan portfolio and sometimes take impairment charges due to our borrowers defaulting or declaring bankruptcy. As national and local economies worsen, increases in the occurrence of such events can result in greater fluctuation of our earnings, which can reduce our net income. Our earnings are also impacted by non-performing assets and the carrying cost of maintaining such assets (taxes, insurance and maintenance). Inconsistent earnings could adversely affect our financial condition and results of operations, which could increase the risk of us defaulting on the indenture and/or could negatively impact our ability to pay interest on the certificates or to pay such interest in a timely manner.

Risks Related to Mortgage Lending to Churches

Churches Rely on Member Contributions to Repay Our Loans. Churches rely on member contributions for their primary source of income. Member contributions are used to repay our loans. The membership of a church or the per capita contributions of its members may not increase or remain constant after a loan is funded. For example, difficult economic conditions, church members may have reduced pay or may be unemployed and unable to find new employment. As such, members may make fewer or no contributions to our borrowers. A decrease in a church’s income could result in its inability to pay its obligation to us, which may affect our ability to pay interest due on or repay the certificates. We have no control over the financial performance of a borrowing church after a loan is funded.

Churches Depend upon Their Senior Pastors. A church’s senior pastor usually plays an important role in the management, spiritual leadership and continued viability of that church. A senior pastor’s absence, resignation or death could have a negative impact on a church’s operations, and thus its continued ability to generate revenues sufficient to service its obligations to us.

The Limited Use Nature of Church Facilities Limits the Value of Our Mortgage Collateral. Our loans are secured principally by first mortgages upon the real estate and improvements owned or to be owned by churches and other religious and non-profit organizations. Although we require an appraisal of the premises as a pre-condition to making a loan, the appraised value of the premises cannot be relied upon as being the actual amount which might be obtained in the event of a default by the borrower. The actual liquidation value of church, school or other institutional premises could be adversely affected by, among other factors: (i) its limited use nature; (ii) the availability on the market of similar properties; (iii) the availability and cost of financing, rehabilitation or renovation to prospective buyers; (iv) the length of time the seller is willing to hold the property on the market; or (v) the availability in the area of the mortgaged property of congregations or other buyers willing to pay the fair value for a church facility.

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Risks Related to Environmental Laws

We May Face Liability under Environmental Laws. Under federal, state and local laws and regulations, a secured lender (like us) may be liable, under certain limited circumstances, for the costs of removal or remediation of certain hazardous or toxic substances and other costs (including government fines and injuries to persons and adjacent property). Liability may be imposed whether or not the owner or lender knew of, or was responsible for, the presence of hazardous or toxic substances. The costs of remediation or removal of hazardous or toxic substances, or of fines for personal or property damages, may be substantial and material to our business operations. The presence of hazardous or toxic substances, or the failure to promptly remediate such substances, may adversely affect our ability to resell real estate collateral after foreclosure or could cause us to forego foreclosure. This is a changing area of the law. The courts have found both in favor and against lender liability in this area under various factual scenarios. We may require an environmental database check on all properties to be used as collateral for our mortgage loans.

The Collateral for Our Loans and Our Lenders May Be Subject to Environmental Claims. If there are environmental problems associated with the real estate securing any of our loans, the associated remediation or removal requirements imposed by federal, state and local laws could affect our ability to realize value on our collateral or our borrower’s ability to repay its loan.

WHO MAY INVEST

Who May Purchase Certificates. You should purchase certificates only if you are prepared to hold the certificates until maturity, only if you have significant financial means, and only if you have no immediate need for liquidity of your investment. We have established financial suitability standards for investors desiring to purchase certificates. You may purchase up to $5,000 of certificates only if you have either (i) a minimum annual gross income (without regard to your investment in shares or certificates) of at least $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of $45,000; or (ii) a net worth (determined with the foregoing exclusions) of at least $150,000. You may purchase more than $5,000 of certificates only if you have either: (i) a minimum annual gross income of (without regard to your investment in shares or certificates) at least $70,000 and a net worth (exclusive of home, home furnishings and automobiles) of $70,000; or (ii) a net worth (determined with the foregoing exclusions) of at least $250,000. Suitability standards may be higher in some states. Please see Exhibit B. We may not complete a sale of certificates until five days after you have received a prospectus. We will refund your investment upon your request, which we must receive within five days after you subscribe, if you received a prospectus only at the time of subscription.

Fiduciary Accounts. In the case of fiduciary accounts, these minimum standards must be met by the beneficiary of the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds to purchase the shares or certificates if the donor or grantor is the fiduciary.

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USE OF PROCEEDS

The following represents our estimate of the use of the offering proceeds from the sale of the certificates, assuming that all the offered certificates are sold.

	Total		Percent
Gross Offering Proceeds (1)	$	10,000,000	100.00	%
Less Expenses
Selling Commissions (2)	350,000		3.50	%
Underwriter’s Expense Allowance (3)	60,000		.60	%
Offering Expenses (4)	75,000		.75	%
Total Public Offering-Related Expenses	485,000		4.85	%
Amount Available for Investment	$	9,515,000	95.15	%

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(1) We are offering the certificates on a “best efforts” basis through the underwriter. There is no assurance that any or all certificates will be sold.

(2) We will pay the underwriter a sales commission of 2.75% and an underwriting management fee equal to 0.75% of the principal amount of certificates sold.

(3) We will pay the underwriter a non-accountable expense allowance of up to $60,000, if all of the certificates are sold, payable as follows: (i) $10,000 is payable upon the sale of each $1,000,000 of certificates up to the sale of $5,000,000 of certificates; and (ii) $1,000 is payable upon the sale of each additional $1,000,000 of certificates up to completion of the sale of all certificates offered hereby or the termination of this offering, whichever is first.

(4) These figures are our best estimates of the legal, accounting, printing, filing fees and other expenses attendant to this offering, all of which have been or will be paid to independent professionals and service providers.

The principal purpose of this offering is to raise capital to allow us to make mortgage loans to churches and/or to other non-profit religious organizations and to purchase mortgage bonds issued by churches. We presently expect to use all of the net proceeds for this purpose, regardless of the amount of proceeds raised in this offering. Because it is possible that it may take time to invest the proceeds in this manner, however, we would in that case invest the net proceeds in permitted temporary investments and may use some portion for working capital purposes including, but not limited to: redeeming our equity securities and repaying maturing certificates. The Series B, C and D Secured Investor Certificates bear interest at rates ranging from 3.00% to 7.25% and have maturities ranging from 3 months to 15 years.

COMPENSATION TO ADVISOR AND AFFILIATES

This table discloses all the compensation our advisor and its affiliates can receive either directly or indirectly. In accordance with applicable state law, the total of all acquisition fees and expenses we pay in connection with our business cannot exceed 6% of the amount loaned, unless a majority of the directors (including a majority of our independent directors) not otherwise interested in the transaction approve the transaction as being commercially competitive, fair and reasonable to us. Our total operating expenses cannot (in the absence of a satisfactory showing to the contrary) in any fiscal year exceed the greater of: (a) 2% of our average invested assets; or (b) 25% of our net income for the year. Our independent directors may, upon a finding of unusual and nonrecurring factors which they deem sufficient, determine that a higher level of expenses is justified in any given year.

ADVISOR COMPENSATION
ITEM OF COMPENSATION	RECIPIENT	AMOUNT OR METHOD OF COMPENSATION
Advisory Fee	Advisor	Up to 1.25% annually, paid monthly, of our average invested assets up to $35 million. This fee is reduced to 1.00% on assets from $35 million to $50 million and to .75% on assets over $50 million. Our advisor received advisory fees in the amount of $343,416 for the year ended December 31, 2015, $314,817 for the year ended December 31, 2016 and $161,732 for the six months ended June 30, 2017. Although our Advisor can charge up to 1.25% annually, the Advisor charged an average of .0718% and .0784% for the years ended December 31, 2016 and 2015, and .0707% for the six month period ended June 30, 2017, respectively. Assuming we had borrowed the maximum amount permitted under our bylaws (not in excess of 300% of Stockholders’ equity, except under certain circumstances), which at June 30, 2017 would have been an additional $6,443,000 and assuming our average invested assets were $45,079,000, the advisory fee could be as high as $538,290 per year.

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Acquisition Fees/Expenses	Advisor	In connection with mortgage loans we make, borrowers may be required to pay our advisor’s expenses for closing and other loan-related expenses, such as accounting fees and appraisal fees paid by our advisor to independent service providers. Our advisor may retain payments made by the borrower in excess of costs, but our bylaws limit the total of all acquisition fees and acquisition expenses to a reasonable amount and in no event in excess of six percent (6%) of the funds advanced to the borrower.
Advisor Loan Origination Fee	Advisor	Up to one-half of the origination fees collected from the borrower at closing in connection with each mortgage loan we make. Our advisor received origination fees in the amount of $48,800 for the year ended December 31, 2015, $9,500 for the year ended December 31, 2016, and $4,200 for the six months ended June 30, 2017. We cannot estimate the total amount of loan origination fees that may be realized by our advisor, but assuming all of the certificates are sold and we invest in that one-year period net proceeds of $9,515,000 in mortgage loans with an average origination fee of 3%, the loan origination fees payable to our advisor in such year could be up to $142,725. As our sixty-four loans mature or are otherwise repaid, we may make new loans to borrowers. Loan origination fees would also be payable to our advisor if we make new loans from these funds to borrowers.
AFFILIATE COMPENSATION
ITEM OF COMPENSATION	RECIPIENT	AMOUNT OR METHOD OF COMPENSATION
Commissions on the Sale of Certificates in this Offering	Underwriter	2.75% of the principal amount of the certificates. The underwriter may re-allow all or a portion of this amount to other participating broker-dealers who are members of the Financial Industry Regulatory Authority (“FINRA”).
Non-Accountable Expense Allowance Relating to the Sale of Certificates in this Offering	Underwriter	Up to $60,000 to cover the underwriter’s costs and expenses relating to the offer and sale of the certificates in this offering, payable as follows: (i) $10,000 paid upon the sale of each $1,000,000 of certificates up to the sale of $5,000,000 of certificates, and (ii) $2,000 payable upon the sale of each additional $1,000,000 of certificates up to the Offering completion of sale of all certificates offered hereby or the termination of this offering, whichever occurs first.
Underwriter’s Management Fee Commissions and Expenses on First Mortgage Bonds Purchased	Underwriter	0.75% of the principal amount of the certificates sold, payable only upon original issuance. Underwriter customary mark-ups and mark-downs on first mortgage church bonds we purchase and sell through the underwriter on the secondary market, and commissions earned on church bonds we purchase in the primary market are not in connection with this offering and are not in connection with the underwriter’s 0.75% management fee.
Underwriter’s Renewal Fee	Underwriter	1.25% of the principal amount of the certificates renewed.
Underwriter’s Legal Fees	Underwriter	Underwriter will receive no more than $5,000 worth of legal fees paid for by issuer.

CONFLICTS OF INTEREST

We are subject to various conflicts of interest arising from our relationship with our advisor and the underwriter. Our President, Philip J. Myers, is the President of both our advisor and the underwriter and thus is in a position of control of both entities. In addition, Mr. Myers owns 100% of the underwriter and advisor. Our Chief Financial Officer and Treasurer, Scott J. Marquis is the Chief Financial Officer and Chief Operating Officer of the underwriter and thus also in a position of control of both entities. Our advisor, its affiliates, our directors and the directors of our advisor are not restricted from engaging for their own accounts in business

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activities similar to ours. Occasions may arise when our interests would be in conflict with those of one or more of the directors, our advisor or their affiliates. Our directors, a majority of whom are independent, will endeavor to exercise their fiduciary duties in a manner that will preserve and protect our rights and the interests of the Stockholders in the event any conflicts of interest arise. Any transactions between us and any director, our advisor or any of their affiliates, other than the purchase or sale, in the ordinary course of our business, of church bonds from or through the underwriter, will require the approval of a majority of the directors, including a majority of our independent directors, who are not interested in the transaction.

Transactions with Affiliates and Related Parties

We compensate our advisor and its affiliates for services they provide to us. Our board of directors has the responsibility to ensure that such services are provided on terms no less favorable than we could obtain from unrelated persons or entities. The underwriter may receive commissions from our transactions in church bonds, and our principals and our advisor may receive a benefit in connection with such transactions due to their affiliation with the underwriter.

Compensation to Our Advisor and Conflicts of Interest

We pay our advisor an annual advisory fee equal to a 1.25% of our average invested assets up to $35 million. This fee is reduced to 1.00% on assets from $35 million to $50 million and to .75% on assets over $50 million. The fee is not dependent on our advisor’s performance. Our advisor receives a portion of the fees we make when we make or renew a mortgage loan based upon a percentage of the amount paid by a mortgage borrower as “points,” or origination fees. Accordingly, a conflict of interest could arise since the retention, acquisition or disposition of a particular loan could be advantageous to our advisor, but detrimental to us, or vice-versa. Because origination fees are payable upon the closing of the loan or its renewal, and the amount is dependent upon the size of the mortgage loan, our advisor may have a conflict of interest in negotiating the terms of the loan and in determining the appropriate amount of indebtedness to be incurred by the borrower.

We and our advisor believe that it would not be possible, as a practical matter, to eliminate these potential conflicts of interest. However, the advisory agreement must be renewed annually by the affirmative vote of a majority of the independent directors. The independent directors may determine not to renew the advisory agreement if they determine that our advisor is not satisfactorily performing its duties. In connection with the performance of their fiduciary responsibilities, the existence of possible conflicts of interest will be one of the factors for the directors to consider in determining the action we will take.

Compensation to the Underwriter and Conflicts of Interest

We will pay the underwriter commissions based on the gross amount of the certificates it sells on our behalf in this offering. A conflict of interest could arise from this compensation arrangement, as the underwriter may be incented to sell certificates at a time when we may not be able to immediately deploy the resulting proceeds to fund mortgage loans or purchase church bonds.

Our Affiliates May Compete with Us

Any of our directors or officers may have personal business interests that conflict with our interests and may engage in the church lending business or any other business. A director or officer may have an interest in an entity we engage to render advice or services, and may receive compensation from such entity in addition to compensation received from us. However, there have been no personal business interests of our officers or directors which have conflicted with the Company’s interests thus far.

The underwriter provides financing to churches and other not-for-profit religious organizations. Therefore, a conflict could arise if the underwriter were to pursue and secure a lending opportunity otherwise available to us. However, the average size of first mortgage bond financings undertaken by the underwriter is approximately $1.75 million, with $1,000,000 being its stated (but not required) minimum financing. We focus on financings ranging from $100,000 to $1,000,000 in size, though we are permitted to make loans up to $2,000,000. Conflicts of interest between the underwriter and us likely will be reduced by virtue of the targeted size of loans pursued by each. We have agreed with the underwriter that financing prospects of less than $1,000,000 will be first directed to us for consideration. If we determine that the loan is not suitable or decline to make the loan for any reason, or if the prospective borrower independently declines to accept our lending, then the underwriter or its affiliates will have the opportunity to provide financing to that prospective borrower.

Neither our advisor nor its affiliates are prohibited from providing the same services to others, including competitors. These relationships may produce conflicts in our advisor’s and its affiliates’ allocation of time and resources among various projects.

Non Arm’s-Length Agreements

Many agreements and arrangements we have with our advisor and its affiliates, including those relating to compensation, were not negotiated at arm’s-length. The conflicts or potential conflicts arising from these agreements and arrangements are mitigated

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by the following factors: (i) our bylaws limit our operating expenses to an amount that does not exceed the greater of 2% of our average invested assets or 25% of our net income unless the independent directors approve a higher amount and disclose the justification for the higher expenses to our investors; (ii) our advisor seeks to structure its business relationships so as to be competitive with other programs in the marketplace; and (iii) the agreements and arrangements are subject to approval by a majority of our independent directors.

Lack of Separate Legal Representation

The law firm of Winthrop & Weinstine, P.A., Minneapolis, Minnesota, is counsel to us in connection with this offering and may in the future act as counsel to us, the underwriter, our advisor, our affiliates, and various affiliates of our advisor with respect to other matters. There is a possibility that in the future the interests of the various parties may become adverse. In the event that a dispute were to arise between us and the underwriter, our advisor or any of its affiliates, or our affiliates, separate counsel for such matters will be retained as and when appropriate.

Legal Proceedings

There are presently no legal actions against us, pending or threatened.

Shared Operations Facilities

We are located in the leased offices of the underwriter, American Investors Group, Inc., in Minnetonka (Minneapolis), Minnesota. We expect to continue to be housed in these or similar leased premises along with the underwriter and its affiliates. We are not separately charged for rent or related expenses. Our advisor incurs our occupancy expense and many of our operating expenses in exchange for the advisory fee.

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

Outstanding Securities

As of September 19, 2017, 1,677,798 shares of our common stock and $27,732,000 of Secured Investor Certificates were issued and outstanding.

Holders of Our Common Shares

As of September 19, 2017, we had 587 record holders of our $.01 par common stock.

Lack of Liquidity for our Shares and Inconsistent Public Market Price

There is only a thinly-traded market for our common shares. It is not expected that a material liquid market for the shares will develop any time soon. In addition, the market for REIT securities historically has been less liquid than non-real estate types of publicly-traded equity securities. Because of such illiquidity and the fact that the shares would be valued by market-makers (if a market develops) based on market forces which consider various factors beyond our control, there can be no assurance that the market value of the shares at any given time would be the same or higher than the public purchase price of our shares. In addition, the market price, if a market develops, could decline if the yields from other competitive investments exceed the actual dividends paid by us on our shares. Our common stock is not currently listed or traded on any exchange or market.

Our Class A Common Stock, $.01 par value per share, has traded on the over-the-counter market Pink Sheets at certain isolated times under the symbol “ACMC.PK” through June 30, 2017. The last sale price was $2.01 per share on June 30, 2017. The following table sets forth the high bid quotation and the low bid quotation as quoted by the Pink Sheets in 2015, 2016 and for the first and second quarter of 2017. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

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	High		Low
Calendar Year 2017
First Quarter	$	2.80	$	1.90
Second Quarter	$	2.46	$	2.01
Calendar Year 2016
First Quarter	$	2.50	$	2.15
Second Quarter	$	2.60	$	2.10
Third Quarter	$	2.90	$	2.13
Fourth Quarter	$	2.75	$	1.61
Calendar Year 2015
First Quarter	$	4.49	$	3.86
Second Quarter	$	4.29	$	4.00
Third Quarter	$	4.00	$	3.32
Fourth Quarter	$	3.70	$	2.10

DISTRIBUTIONS

In order to qualify for the beneficial tax treatment afforded real estate investment trusts by the Internal Revenue Code, we are required to pay dividends in annual amounts which are equal to at least 90% of our “real estate investment trust taxable income.” We intend to make distributions that meet this requirement. Annual distributions will be estimated for the first three quarters of each fiscal year and adjusted annually based upon our audited year-end financial report.

Note: Investors who purchase certificates in this offering will not be entitled to receive dividends from us as they will not own any of our common stock.

We began making regular quarterly distributions to our Stockholders for the period of operations ended June 30, 1996. Distributions for prior years, and the yield and annualized yield, respectively, represented by such distributions (assuming shares were purchased for $10.00 per share), are as follows:

For Year Ended:	Dollar Amount Distributed Per Share: (1)	Yield Per Share Represented:
December 31, 1996	0.6646	9.375	%
December 31, 1997	0.9475	9.475	%
December 31, 1998	0.8906	8.906	%
December 31, 1999	0.8500	8.50	%
December 31, 2000	0.8250	8.25	%
December 31, 2001	0.8313	8.3125	%
December 31, 2002	0.7688	7.6875	%
December 31, 2003	0.6500	6.50	%
December 31, 2004	0.6688	6.6875	%
December 31, 2005	0.6188	6.1875	%
December 31, 2006	0.5875	5.875	%
December 31, 2007	0.2625	2.625	%
December 31, 2008	0.3500	3.50	%
December 31, 2009	0.4000	4.00	%
December 31, 2010	0.4000	4.00	%
December 31, 2011	0.4000	4.00	%
December 31, 2012	0.3800	3.80	%
December 31, 2013	0.4000	4.00	%
December 31, 2014	0.3700	3.70	%
December 31, 2015	0.2550	2.55	%
December 31, 2016	0.2400	2.40	%
Quarter ended March 31, 2017	0.0700	2.80	%
Quarter ended June 30, 2017	0.0700	2.80	%

________________________________________

(1) Yield calculated for shares originally purchased for $10.00 per share.

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As a Real Estate Investment Trust, we make regular quarterly distributions to Stockholders. The amount of distributions to our Stockholders must equal at least 90% of our “real estate investment trust taxable income” in order for us to retain REIT status. Stockholder distributions are estimated for our first three quarters each fiscal year and adjusted annually based upon our audited year-end financial report. Cash available for distribution to our Stockholders is derived primarily from the interest portion of monthly mortgage payments we receive from churches borrowing money from us, from origination and other fees paid to us by borrowers in connection with loans we make, interest income from mortgage-backed securities issued by churches and other non-profit religious organizations purchased and held by us for investment purposes, and earnings on any permitted temporary investments made by us. All dividends are paid by us at the discretion of the board of directors and will depend upon our earnings and financial condition, maintenance of real estate investment trust status, funds available for distribution, results of operations, economic conditions, and such other factors as our board of directors deems relevant.

During any period where our shares of common stock are being offered and sold and the proceeds therefrom accumulated for the purpose of funding loans to be made by us, the relative yield generated by such capital, and, thus, dividends (if any) to Stockholders, could be less than expected until we have fully invested such funds into loans. We seek to address this issue by (i) collecting from borrowers an origination fee at the time a loan is made, (ii) timing our lending activities to coincide as much as possible with sales of our securities, and (iii) investing our undeployed capital in permitted temporary investments that offer the highest yields together with safety and liquidity. However, there can be no assurance that these strategies will improve current yields to our Stockholders. In order to qualify for the beneficial tax treatment afforded to real estate investment trusts by the Internal Revenue Code, we are required to pay dividends to holders of our shares in annual amounts which are equal to at least 90% of our “real estate investment trust taxable income.” For the fiscal year ended December 31, 2016, we distributed 100% of our taxable income to our Stockholders in the form of quarterly dividends. We intend to continue distributing virtually all of such income to our Stockholders on a quarterly basis, subject to (i) limitations imposed by applicable state law, and (ii) the factors identified above. The portion of any dividend that exceeds our earnings and profits will be considered a return of capital and will not currently be subject to federal income tax to the extent that such dividends do not exceed a Stockholders’ basis in their shares.

Funds available to us from the repayment of principal (whether at maturity or otherwise) of loans made by us, or from sale or other disposition of any properties or any of our other investments, may be reinvested in additional loans to churches, invested in mortgage-backed securities issued by churches or other non-profit organizations, or in permitted temporary investments, rather than distributed to the Stockholders. We can pass through the capital gain character of any income generated by computing its net capital gains and designating a like amount of our distribution to our Stockholders as “capital gain dividends.” The distribution requirement to maintain qualification as a real estate investment trust does not require distribution of net capital gains, if generated. Thus, if we have a choice of whether to distribute any such gains, undistributed net capital gains (if any) will be taxable to us. The board of directors, including a majority of the Independent Directors, will determine whether and to what extent the proceeds of any disposition of property will be distributed to our Stockholders.

Equity Compensation Plans

We do not have any equity compensation plans under which equity securities of the Company are authorized for issuance.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2016 and as of June 30, 2017 as adjusted to give effect to the sale of all of the certificates offered hereby, of which there can be no assurance.

	December 31, 2016			June 30, 2017
	Actual			Actual			As Adjusted (1)
Long Term Debt	$	28,061,619		$	27,629,650		$	37,629,650
Current Liabilities	2,940,619			1,627,650			1,627,650
Stockholders’ Equity Common Stock, $.01 par value per share; 30,000,000 shares authorized; issued and outstanding 1,677,798 at December 31, 2016 and June 30, 2017	16,778			16,778			16,778
Additional Paid-In Capital	19,113,458			19,113,458			19,113,458
Accumulated Deficit	(7,625,217		)	(7,828,175		)	(7,828,175		)
Total Stockholders’ Equity	11,505,019			11,302,061			11,302,061
Total Capitalization	$	39,566,638		$	38,931,711		$	48,931,711

________________________________________

(1) This is a best-efforts, no minimum offering. If less than all of the certificates offered hereby are sold, then the Long Term Debt figures in the “As Adjusted” columns would be reduced in proportion to the reduced sales.

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SELECTED FINANCIAL DATA

The selected financial data presented below is derived from our audited financial statements as of and for the years ended December 31, 2015 and 2016 and our unaudited statements as of and for the six months ended June 30, 2016 and 2017. The financial statements are included in the appendix. You should refer to the financial statements and notes thereto, for a more detailed presentation of financial information.

	Year Ended December 31,		For the Six Months Ended
	2015	2016	June 30, 2016	June 30, 2017
			(unaudited)	(unaudited)
Statement of Operations
Interest and Other Income	$  2,936,326	$  2,698,186	$  1,338,230	$  1,382,792
Interest Expense	1,997,249	2,025,000	1,005,657	955,754
Net Interest Income	939,077	673,186	332,573	427,038
Provision for losses on mortgage loans receivable	188,634	155,056	144,476	51,799
Net Interest Income after Provision for Mortgage Losses	750,443	518,130	188,097	375,239
Other than temporary impairment on bond portfolio	-	258,000	120,000	-
Operating Expenses	792,730	597,337	342,236	343,305
Operating Income (Loss)	(42,287)	(337,207)	(274,139)	31,934
Other Income	4,053	-	-	-
Net Income (Loss)	$  (38,234)	$  (337,207)	$  (274,139)	$  31,934
Basic and Diluted Income (Loss) Per Share	$ (0.02)	$ (0.20)	$  (0.16)	$  0.02
Dividends Declared Per Share	$ 0.23	$  0.24	$  0.06	$  0.07
Weighted Average Common Shares Outstanding - Basic and Diluted	1,677,798	1,677,798	1,677,798	1,677,798

	Year Ended December 31,				For the Six Months As Of
	2015		2016		June 30, 2016		June 30, 2017
					(unaudited)		(unaudited)
Balance Sheet Data:
Assets:
Cash and Cash Equivalents	$	4,377,110	$	3,382,994	$	4,422,274	$	963,383
Current maturities of loans receivable, net of allowances and deferred origination fees		1,134,157		725,727		1,102,477		1,725,407
Current maturities of bond portfolio		84,000		111,000		104,000		131,000
Loans Receivable, net of current maturities, allowance and deferred origination fees		22,680,542		22,396,071		22,594,951		21,721,841
Bonds Receivable, net of current maturities		10,429,428		11,371,616		11,175,428		12,915,616
Accounts Receivable		189,609		219,352		206,467		237,509
Interest Receivable		172,169		175,912		174,580		178,477
Investments		—		2,410		—		2,410
Prepaid Expense		19,904		1,489		9,132		11,109
Real Estate Held for Sale		697,422		340,872		340,872		225,872
Deferred Offering Costs		861,810		839,195		858,250		819,087
Total Assets	$	40,646,151	$	39,566,638	$	40,988,431	$	38,931,711
Liabilities
Accounts Payable	$	29,417	$	36,951		27,340	$	49,204
Secured Investor Certificates		28,246,000		27,924,000		29,091,000		27,463,000
Dividends Payable		125,836		100,668		100,668		117,446
Total Liabilities	$	28,401,253	$	28,061,619	$	29,219,008	$	27,629,650
Stockholders’ Equity		12,244,898		11,505,019		11,769,423		11,302,061
Total Liabilities and Stockholders’ Equity	$	40,646,151	$	39,566,638	$	40,988,431	$	38,931,711

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this section and elsewhere in this prospectus constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, (i) trends affecting our financial condition or results of operations; (ii) our business and growth strategies; (iii) the mortgage loan industry and the status of religious organizations; (iv) our financing plans; and other risks detailed in the Company’s other periodic reports filed with the Securities and Exchange Commission. The words “believe”, “expect”, “anticipate”, “may”, “plan”, “should”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made and are not guarantees of future performance.

Management’s Discussion and Analysis

The following discussion regarding our financial statements should be read in conjunction with the financial statements and notes thereto included in this prospectus beginning at page F-1. We commenced operations as a real estate investment trust in 1996, specializing in providing mortgage loans to churches and other religious non-profit organizations.

Financial Condition

Our total assets decreased from $39,566,638 at December 31, 2016 to $38,931,711 at June 30, 2017. The primary reason for the decrease in total assets from December 31, 2016 through June 30, 2017 was a decrease in our cash position due to the maturity of our secured investor certificates. Stockholders’ equity decreased from $11,505,019 at December 31, 2016 to $11,302,061 at June 30, 2017. This was due to a dividend pay-out of $234,872 which was larger than our net income of $31,934. The larger dividend payout was a result of origination income that was earned during the six month period but is not recognized in its entirety for the period under generally accepted accounting principles (“GAAP”). Our primary liabilities at June 30, 2017 and December 31, 2016 were our Secured Investor Certificates, which were $27,463,000 and $27,924,000 respectively. We also had dividends declared as of the end of the period reported on, but which are not paid until the 30th day of the ensuing month.

Results of Operations – Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2017

The following table shows the results of our operations for the six months ended June 30, 2016 and 2017:

	For the Six Months Ended
	June 30, 2016			June 30, 2017
	(unaudited)			(unaudited)
Statement of Operations
Interest and Other Income	$	1,338,230		$	1,382,792
Interest Expense		1,005,657			955,754
Net Interest Income		332,573			427,038
Provision for losses on mortgage loans receivable		144,476			51,799
Net Interest Income after Provision for Mortgage Losses		188,097			375,239
Other than temporary impairment on bond portfolio		120,000			—
Operating Expenses		342,236			343,305
Operating Income (Loss)		(274,139	)		31,934
Other Income		—			—
Net Income (Loss)	$	(274,139	)	$	31,934
Basic and Diluted Income (Loss) Per Share	$	(0.16	)	$	0.02
Dividends Declared Per Share	$	0.06		$	0.07
Weighted Average Common Shares Outstanding - Basic and Diluted		1,677,798			1,677,798

Since we began active business operations on April 15, 1996, we have paid 85 consecutive quarterly dividend payments to Stockholders. These dividend payments have resulted in an average annual return of 5.617% to Stockholders who purchased shares at $10 per share in our public offerings of stock. Each loan funded during the quarter generates origination income which is due and payable to Stockholders as taxable income even though origination income is not recognized in its entirety for the period under generally accepted accounting principles (“GAAP”). We anticipate distributing all of our taxable income in the form of dividends to our Stockholders in the foreseeable future to maintain our REIT status and to provide income to our Stockholders.

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Net income (loss) for the Company’s six month periods ended June 30, 2017 and 2016 was approximately $31,934 and $(274,139), respectively, on total interest and other income of approximately $1,382,792 and $1,338,230, respectively. Interest and other income is comprised of interest from loans, interest from bonds, amortization of bond discounts and amortization of loan origination fees. As of June 30, 2017, the Company’s loans receivable had interest rates ranging from 0% to 10.25%, with an average, principal-adjusted interest rate of 8.20%. The Company’s bond portfolio has an average current yield of 6.84% as of June 30, 2017. As of June 30, 2016, the average, principal-adjusted interest rate on the Company’s portfolio of loans was 8.28% and the Company’s portfolio of bonds had an average current yield of 6.78%. The increase in interest income was due to the recognition of origination income and an increase in interest income on our bond portfolio.

Interest expense was approximately $956,000 and $1,006,000 for the six month periods ended June 30, 2017 and 2016, respectively. The decrease in interest expense was due to the maturity of some of our Secured Investor Certificates. Net interest margin increased from 24.85% to 30.80% resulting primarily from an increase in interest and other income of approximately 3.33% and a decrease in interest expense of approximately 4.96%.

Allowance for losses on mortgage loans receivable increased during the six months ended June 30, 2016 as we recorded additional allowance against the mortgage loans. We recorded an additional allowance for losses on loans during the six months ended June 30, 2017 of $51,799 compared to $144,476 for the six months ended June 30, 2016. At June 30, 2017, we reserved $1,363,782 for seventeen mortgage loans, of which seven are three or more mortgage payments in arrears, three loans are declared to be in default and two loans were in the foreclosure process.

Our lending practices limit deployment of our capital to churches and other non-profit religious organizations. The total principal amount of our second mortgage loans is limited to 20% of our average invested assets. We currently have three second mortgage loans aggregating approximately $226,000 in principal amount outstanding. We do not lend to any potential borrowers who have been in operation for less than two years and borrowers must demonstrate that they can service the proposed debt outstanding based on an analysis of the prior three years of financial statements. We do not lend money based on projections or pledge programs. The loan amount to a borrower cannot exceed 75% loan to appraised value. In addition, the borrower’s long term debt (including the proposed loan) cannot exceed four times the borrower’s gross income for the previous twelve month period.

Historically, loans in our portfolio are outstanding for an average of seven years. Our borrowers are typically small independent churches with limited borrowing history. Once a church establishes a payment history with us, they look to refinance their loan at lower interest rates with a local bank, credit union or other financial institution which is willing to provide financing since the borrower has established a payment history and has demonstrated they can meet their mortgage debt obligations.

Operating expenses for the six months ended June 30, 2017 increased slightly to approximately $343,000 compared to $342,000 at June 30, 2016. The increase was a result of a payment for internal auditing fees.

Mortgage Loans and Bond Portfolio

Three new loans were funded during the six months ended June 30, 2017. All three loans were short term bridge financing loans with a terms of less than one year.

We currently own $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. We, along with all other bondholders, have a superior lien over all other creditors. We have an aggregate other than temporary impairment of $458,000 for the First and Second Mortgage Bonds at June 31, 2017 and December 31, 2016, which effectively reduces the bonds to the fair value amount management believes will be recovered. The Church has subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the six month period ended June 30, 2017. However, the trustee made a distribution to bondholders during the quarter of $18.75 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826.

Real Estate Held for Sale

As of June 30, 2017, we had one property acquired via deed in lieu of foreclosure, with outstanding loan balances totaling $225,872. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing.

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We record real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is $225,872 as of June 30, 2017. There was no additional impairment for the six month period ended June 30, 2017.

We sold one property and disposed of a second property during the six month period ended June 30, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. We realized an additional loss of approximately $67,000 on property that was sold as of June 30, 2017. We sold two properties during the six month period ended June 31, 2016. The two properties were sold for approximately $380,000. The Company provided seller financing to the borrowers. We realized an additional loss of approximately $52,000 on both properties as of June 30, 2016.

Dividends

We have elected to operate as a real estate investment trust (REIT), therefore we are required, among other things, to distribute to Stockholders at least 90% of “Taxable Income” in order to maintain our REIT status. The dividends declared and paid to Stockholders may include cash from origination fees even though they are not recognized as income in their entirety for the period under generally accepted accounting principles in the United States. We earned $31,750 and $6,000 in origination fees for the six months ended June 30, 2017 and 2016, respectively.

We paid a dividend of $.07 for each share held of record on April 25, 2017. The dividend was paid April 28, 2017.

Our Board of Directors declared a dividend of $.07 for each share held of record on July 28, 2017. The dividend was paid July 31, 2017.

Comparison of the fiscal years ended December 31, 2015 and 2016

The following table shows the results of our operations for fiscal 2015 and 2016:

	Year Ended December 31,
	2015			2016
Statement of Operations
Interest and Other Income	$	2,936,326		$	2,698,186
Interest Expense		1,997,249			2,025,000
Net Interest Income		939,077			673,186
Provision for losses on mortgage loans receivable		188,634			155,056
Net Interest Income after Provision for Mortgage Losses		750,443			518,130
Other than temporary impairment on bond portfolio		—			258,000
Operating Expenses		792,730			597,337
Operating Income (Loss)		(42,287	)		(337,207	)
Other Income		4,053			—
Net Income (Loss)	$	(38,234	)	$	(337,207	)
Basic and Diluted Income (Loss) Per Share	$	(0.02	)	$	(0.20	)
Dividends Declared Per Share	$	0.23		$	0.24
Weighted Average Common Shares Outstanding - Basic and Diluted		1,677,798			1,677,798

Net (loss) for our year ended December 31, 2016 was $(337,207) on total interest and other income of $2,698,186 compared to net (loss) of $(38,234) on total interest and other income of $2,936,326 for the year ended December 31, 2015. The decrease in net income was primarily due to the payoff of first mortgage loans, which reduced our interest-earning assets during 2016 along with an increase in our interest expense on our secured investor certificates and also increase in our provision for losses on our mortgage loans and bond losses.

Net interest income earned on the Company's portfolio of loans was $673,186 for the year ended December 31, 2016, compared to $939,077 for 2015. The decrease in net interest income was due to the decrease in interest income of approximately $238,000 due to a decrease in our mortgage loans outstanding. Excluded from revenue for the year ended December 31, 2016 is $13,160 of origination income, or “points,” we received. Recognition of origination income under GAAP must be deferred over the expected life of each loan. However, under tax principles, origination income is recognized in the period received. Accordingly, because our status as a REIT requires, among other things, the distribution to Stockholders of at least 90% of taxable income, the dividends declared and paid to our Stockholders for the quarters ended March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016 included origination income even though it was not recognized in its entirety as income for the period under GAAP.

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Our operating expenses for our fiscal year ended December 31, 2016 were $597,337 compared to $792,730 for our fiscal year ended December 31, 2015. The decrease in operating expenses was primarily a result of a decrease in overall operating expenses involving legal and accounting along with a decrease and interest expense on our Secured Investor Certificates.

Our Board of Directors declared dividends of $.060 for each share of record on May 1, 2016, $.060 for each share of record on July 30, 2016, $.060 for each shares of record on October 28, 2016 and $.060 for each shares of record on January 28, 2017. Based on the quarters ended March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016 and assuming a share purchase price of $10.00, the dividends paid represented a 2.40% annual yield in 2016. 100% of the dividends paid to Stockholders for the tax year 2016 were non-dividend distributions due to the realized (carry-forward) loss on a $2,035,000 bond issue in 2012 in which we recorded a $1,875,000 loss and additional realized losses on two first mortgage loans. We expect dividends paid in 2017 to be 100% non-dividend distributions due to the realized (carry-forward) loss on this bond issue and the two first mortgage loans.

We choose to distribute income from ongoing operations in the form of dividends to Stockholders. As a Real Estate Investment Trust we are required to distribute up to 90% of our taxable income. The table below reflects taxable income, net income from operations, dividend distributions and the effect of the distributions to Stockholders for the periods ended December 31, 2016 and 2015. Any amount distributed to Stockholders in excess of income from ongoing operations is deemed to be return of principal which results in a reduction of our Stockholder equity.

	December 31, 2016		December 31, 2015
Net Taxable Income	$	40,077	$	159,107
Net Income From Operations (before items)	$	215,572	$	347,054
Total Dividend Distributions	$	402,672	$	427,839
Principal Distribution	$	187,100	$	80,785
Number of Shares Outstanding		1,667,798		1,667,798
Amount of Principal Distributed per Share	$	0.11	$	0.05

Liquidity and Capital Resources

Our revenue is derived principally from interest income, and secondarily, from origination fees and renewal fees generated by mortgage loans that we make. We also earn income through interest on funds that are invested pending their use in funding mortgage loans or distributions of dividends to our Stockholders, and on income generated on church bonds we may purchase and own. We generate revenue through (i) permitted temporary investments of cash, and (ii) making mortgage loans to churches and other non-profit religious organizations. Our principal expenses are advisory fees, legal and auditing fees, communications costs with our Stockholders, and the expenses of our transfer agent and registrar.

Our loan portfolio consists primarily of long-term fixed rate loans. We currently do not have any short-term variable rate loans or renewable loans in our portfolio. Historically, loans in our portfolio are outstanding for an average of approximately six years. Our borrowers are typically small independent churches with little or no borrowing history. Once a church establishes a payment history with us, they often look to re-finance their loan with a local bank, credit union or other financial institution that is willing to provide financing since the borrower has established a payment history and has demonstrated they can meet their mortgage debt obligations.

Currently, our bond portfolio comprises 30% of our assets under management. The total principal amount of mortgage- secured debt securities we purchase from churches and other non-profit religious organizations is limited to 30% of our Average Invested Assets. The total principal amount outstanding is approximately $11,942,000 as of December 31, 2016 and was approximately $10,713,000 as of December 31, 2015. We earned approximately $715,000 on our bond portfolio in 2016 and approximately $625,000 in 2015.

In addition, we are able to borrow funds in an amount up to 300% of Stockholders’ equity (in the absence of a satisfactory showing that a higher level of borrowing is appropriate; any excess in borrowing over such 300% level must be approved by a majority of the Independent Directors and disclosed to Stockholders in the next quarterly report along with justification for such excess) in order to increase our lending capacity.

In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 of Series “D” Secured Investor Certificates. The Securities and Exchange Commission declared our registration statement effective on August 12, 2014. The certificates were offered in multiples of $1,000 with interest rates ranging from 4.00% to 7.00%, subject to changing market rates. Certificates are being offered with maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivables and our bond portfolio of approximately the same value. Our future capital needs are expected to be met by (i) future public offerings of our shares and/or our certificates; and (ii) the repayment of existing loans and bonds and

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potential sale of bonds. As of August 14, 2017 our offering was terminated. We sold $8,234,000 in Series “D” Secured Investor Certificates. We continually review the market for other sources of capital such as a new line of credit.

We anticipate that funds from maturing loans will equal or exceed obligations due on our certificates during 2017. To the extent necessary, we will seek short-term financing or a new working capital facility to meet any short-term cash requirements, which we currently expect would be minimal. We expect to use any extra cash available to us to fund new loans.

The table below shows the principal amount of loans and bonds to be paid through June 30, 2018 and the number of secured investor certificates maturing through June 30, 2018. We have approximately $963,000 in cash on hand to pay maturing certificates. We may need to obtain additional funds from other sources to meet our certificate maturity obligations. One source is the potential sale of bonds in our portfolio or future public offerings of our share and/or our certificates.

	Twelve Month period Ended June 2018
Contractual maturity schedule mortgage loans	$	1,868,411
Contractual maturity schedule bond portfolio		131,000
Total	$	1,999,411
Contractual maturity schedule secured investor certificates	$	1,461,000
Additional funds required to pay maturing certificates	$	(538,411	)

Holders of our secured investor certificates may renew certificates at the current rates and terms upon maturity at our discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $831,000 and $958,000 during 2016 and 2015, respectively. These renewals represent 27% and 41% of the maturing certificates. We believe that renewals we offer to maturing certificate holders will reduce the amount of cash needed to pay maturing certificates in fiscal year 2017. In addition, at June 30, 2017 we have approximately $963,000 in cash on hand to pay maturing certificates which we believe will be sufficient to support any shortfall arising for the mismatch between contractual maturities of assets and liabilities.

During the six months ended June 30, 2017, total assets decreased by approximately $635,000 due to a decrease in cash to pay for maturing secured investor certificates. Current liabilities decreased by approximately $1,313,000 for the six months ended June 30, 2017 due to a decrease in current maturities of our secured investor certificates. Non-current liabilities decreased by approximately $432,000 for the six months ended June 30, 2017 due to a decrease of secured investor certificates outstanding.

For the six months ended June 30, 2017, net cash provided by operating activities increased to approximately $213,712 from $28,035 from the comparative period ended June 30, 2016, primarily due to an decrease in our provision for losses on our bond portfolio.

For the six months ended June 30, 2017, net cash (used for) investing activities was approximately $(1,915,000) compared to $(541,000) from the comparative six months ended June 30, 2016, due to an increase in investment in mortgage loans.

For the six months ended June 30, 2017, net cash (used for) provided by financing activities decreased to approximately $(719,000) from $558,000 for the comparative six months ended June 30, 2016, primarily due to an increase in payments on maturing secured investor certificates

Loan Loss Reserve Policy

We follow a loan loss reserve policy on our portfolio of loans outstanding. This critical policy requires complex judgments and estimates. We record mortgage loans receivable at their estimated net realizable value, which is the unpaid principal balance less the allowance for mortgage loans. Our loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy reserves for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan. Our policy will reserve for the outstanding principal amount of a loan in our portfolio if the amount is in doubt of being collected. Additionally, no interest income is recognized on impaired loans that are in the foreclosure process. At June 30, 2017, we had a loan loss reserve accrual of $1,363,782 for seventeen mortgage loans, of which seven totaling approximately $3,457,000 are three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 are declared to be in default and two loans totaling approximately $633,000 are in the foreclosure process. At December 31, 2016, we provided $1,311,983 for seventeen mortgage loans, of which seven totaling approximately $3,449,000 were three or

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more mortgage payments in arrears, three loans totaling approximately $1,226,000 were declared to be in default and two loans totaling approximately $627,000 were in the foreclosure process.

As of June 30, 2017, we had seven first mortgage loans three or more payments in arrears, three loans declared to be in default and two loans were in the process of being foreclosed.

Of the twelve loans with payments in arrears, the first impaired loan has an outstanding balance of approximately $468,000. The church is located in Atlanta, Georgia. This loan is in the foreclosure process. We are currently assessing our options regarding this property. The church has been working on getting re-financing. The church is located in a residential area.

The second impaired loan has an outstanding balance of $166,000. The church is located in Detroit, Michigan. This loan is in the foreclosure process. The Church has been making periodic payments and is current in their mortgage payments to us. However, the Church still owes us attorney fees and back taxes. We are currently assessing our options regarding this property. The church is located in a commercial area. Therefore, we believe the facility can be converted and used other than as a church.

The third impaired loan has an outstanding balance of approximately $460,000. The church is located in Miami, Florida. This loan has been declared to be in default. The church has resumed making monthly interest only payments. We plan on restructuring this loan in 2017 if the church continues to make monthly payments. The church is located in a residential area.

The fourth impaired loan has an outstanding balance of approximately $544,000. This loan has been declared in default. The church is located in Detroit, Michigan and is located in an area suffering from urban blight and high crime. The church is currently unoccupied. We are continually assessing our options with a local realtor. This church is located in a commercial area. Therefore, we believe the facility can be converted and used other than as a church.

The fifth impaired loan has an outstanding balance of $222,000. The church is located in Atlanta, Georgia. This loan has been declared in default. The church has stopped making regular monthly mortgage payments. The church has sent three small mortgage payments toward their indebtedness as of June 30, 2017. We are currently assessing our options regarding this property. The church is located in a residential area.

The sixth impaired loan has an outstanding balance of $383,000. The church is located in Raleigh, North Carolina. The church has missed six mortgage payments since the loan was funded in November 2004. However, the church did not miss any payments in 2016 or 2017. We are working with the church to bring its payments current. The church is located in a residential area.

The seventh impaired loan has an outstanding balance of $295,000. The church is located in Seagoville, Texas. The church has missed six payments since the loan was funded in August 2006 of which two payments were missed in 2017. We are working with the church to bring its payments current. The church is located in a residential area

The eighth impaired loan has an outstanding balance of $685,000. The church is located in Dallas, Texas. The church has missed four payments since the loan was funded in September 2008 of which two payments were missed in 2017. We are working with the church to bring its payments current. The church is a commercial building. Therefore, we believe the facility can be converted and used other than as a church.

The ninth impaired loan has an outstanding balance of $653,000. The church is located in Linton, Indiana. The church has missed three payments since the loan was funded in September 2007. However, the church did not miss any payments in 2016 or 2017. We are working with the church to bring its payments current. The church is located in a residential area.

The tenth impaired loan has an outstanding balance of $460,000. The church is located in Cincinnati, Ohio. The church has missed seven payments since the loan was funded in April 2011, of which two payments were missed to 2016 and one in 2017. We are working with the church to bring its payments current. The church is located in a residential area

The eleventh impaired loan has an outstanding balance of $735,000. The church is located in Richmond Hills, Texas. The church has missed numerous payments since the loan was funded in November 2004. We are working with the church to bring its payments current. The church is a commerical building. Therefore, we believe the facility can be converted and used other than as a

The twelfth impaired loan has an outstanding balance of $245,000. The church is located in Kirbyville, Texas. The church has missed three payments since the loan was funded in June 2003. However, the church did not miss any payments in 2016 or 2017. We are working with the church to bring its payments current.

We presently expect our allowance for mortgage loans to be adequate to cover all losses incurred and probable. Listed below is our current loan loss reserve policy:

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Incident	Percentage of Loan Reserved	Status of Loan
1.	None	Loan is current, no interruption in payments during history of the loan, (“interruption” means receipt by us more than 30 days after scheduled payment date).
2.	None	Loan current, previous interruptions experienced, but none in the last six month period. Applies to restructured loans or loans given forbearance.
3.	None	Loan current, previous interruptions experienced, but none in the last 90 day period.
4.	1.00%	Loan serviced regularly, but 2 or 3 payments cumulative in arrears.  Delinquency notice has been sent.
5.	5.00%	Loan serviced regularly, but 4 or 5 payments cumulative in arrears. Repayment plan requested.
6.	10.00%	Loan is declared to be in default. Legal counsel engaged to begin foreclosure. Additional accrual of overdue payments and penalties ceased.
7.	The greater of: (i) accumulated reserve during default period equal to principal loan balance in excess of 65% of original collateral value; or (ii) 1% of the remaining principal balance each quarter during which the default remains in effect.	Foreclosure proceeding underway. Accrual of all overdue interest and principal payments including penalties to be expensed. Reserve amount dependent on value of collateral. All expenses related to enforcing loan agreements are expensed.

The Company’s Advisor, on an ongoing basis, will review reserve amounts under the policy stated above and determine the need, if any, to reserve amounts in excess of its current policy. Any additional reserve amounts will be equal to or greater than its current reserve policy. Allowance for mortgage loans are calculated on the remaining principal balance on the date of calculation and recorded on a quarterly basis.

We expect to foreclose on one property in 2017 and will incur costs to secure and prepare these properties for sale. We seek to exhaust all options available to us to before proceeding to foreclosure. We do not foresee any foreclosures other than this one church in the foreseeable future.

Bond Loss Policy

The allowance for losses on bonds is estimated by management and is determined by reviewing: (i) payment history, (ii) our experience with defaulted bond issues, (iii) the issuer’s payment history as well as (iv) historical trends.

We currently own $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds were modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. We have an aggregate other than temporary impairment of $458,000 for the First and Second Mortgage Bonds at June 30, 2017 and December 31, 2016, which effectively reduces the bonds to the fair value amount management believes will be recovered. The Church has subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the six month period ended June 30, 2017. However, the trustee made a distribution to bondholders during the quarter of $18.75 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826.

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Critical Accounting Policies and Estimates

Preparation of our financial statements requires estimates and judgments to be made that affect the amounts of assets, liabilities, revenues and expenses reported. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. We evaluate these estimates based on assumptions we believe to be reasonable under the circumstances.

The difficulty in applying these policies arises from the assumptions, estimates and judgments that have to be made currently about matters that are inherently uncertain, such as future economic conditions, operating results and valuations as well as management intentions. As the difficulty increases, the level of precision decreases, meaning that actual results can and probably will be different from those currently estimated.

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable and the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

We estimate the value of real estate we hold pending sale based on a number of factors. We look at the current condition of the property as well as current market conditions in determining a fair value, which will determine the listing price of each property. Each property is valued based on its current listing price less any anticipated selling costs, including for example, realtor commissions. Since churches are single use facilities the listing price of the property may be lower than the total amount owed to us. Attorney fees, taxes, utilities along with real estate commission fees will also reduce the amount we collect from the sale of a property we have acquired through foreclosure. The fair value of the real estate held for sale includes estimates of expenses related to the sale of the real estate.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect that is material to investors on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures.

OUR BUSINESS

General

American Church Mortgage Company was established by American Investors Group, Inc. (the “underwriter” or “American”) to service demand that the principals of American identified through the course of its business for mortgage lending to church borrowers in the amount of $100,000 to $2,000,000. Because of the regulatory and administrative expenses associated with bond financing, the economic feasibility of bond financing diminishes for financings under $750,000. As a result, American believed that many churches were forced to either forego the project for which their financing request was made, fund their project from cash flow over a period of time and at greater expense, or seek bank financing on terms which were not always favorable or available to them. We were incorporated in Minnesota on May 27, 1994 to provide a lending source to this segment of the industry, capitalizing on a lack of significant competition in the specialized business of making smaller church loans, the experienced human resources available at American and our advisor, and the marketing, advertising and general goodwill of American. We began making loans in April 1996. We make loans throughout the United States in principal amounts limited in range from $100,000 to $2,000,000. We may invest up to 30% of our average invested assets in mortgage secured debt securities (bonds) issued by churches and other non-profit religious organizations. We intend to lend funds and acquire mortgage secured investments pursuant to our business plan as additional funds become available from this offering, and thereafter as funds from loan repayments, bond maturities and other resources become available.

We utilize American’s unique specialization in procuring, qualifying and servicing church loans to enhance our operations. American has underwritten first mortgage bonds for churches throughout the United States since 1987. In underwriting church bonds, American reviews financing applications, analyzes prospective borrowers’ financial capability, and structures, markets and sells, mortgage-backed bond securities to the investing public. Since its inception, American has underwritten approximately 287 church bond financings, in which approximately $546,350,000 in first mortgage bonds have been sold to public investors. The average size of church bond financings underwritten by American since its inception is approximately $1,904,000.

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Since our establishment, we have made 193 mortgage loans to churches totaling $100,767,503, with the average principal amount of such loans being approximately $522,000. Of the 193 loans we have made, 105 loans totaling $58,777,727 have been repaid early by the borrowing churches. As of June 30, 2017, we had sixty-one (61) first mortgage loans aggregating $24,905,108 in principal amount, three second mortgage loans totaling $225,871 in principal amount and a first mortgage bond portfolio with par values aggregating $13,505,598.

Financing Business

We make first mortgage loans in amounts ranging from $100,000 to $2,000,000, to churches and other non-profit religious organizations, and invest in mortgage-secured debt instruments issued by churches and other non-profit religious organizations, called church bonds. We apply essentially all of our working capital (after adequate reserves determined by our advisor) toward making mortgage loans and investing in church bonds. We seek to:

· find qualified borrowers and make loans in accordance with our Lending Guidelines;

· lend at rates of interest in excess of our cost of funds;

· offer competitively attractive mid-term (5-15 years) loans and long term (20-30 year) loans (although there is no limit on the term of our loans);

· charge origination fees, or “points,” from the borrower at the outset of a loan and upon any renewal of a loan;

· make a limited amount of higher interest rate second mortgage loans and construction/interim loans to qualified borrowers; and

· purchase a limited amount of mortgage-secured debt securities issued by churches and other non-profit religious organizations, typically at par value.

Our policies limit the amount of second mortgage loans to 20% of our average invested assets on the date any second mortgage loan is closed, and limit the amount of mortgage secured debt securities to 30% of average invested assets on the date of their purchase. All other mortgage loans we make (or church bonds purchased for investment) will be secured by a first mortgage or deed of trust on the borrower’s real property. As of June 30, 2017, we had three second mortgage loans outstanding aggregating approximately $224,000 representing 0.89% of approximately $25,131,000 in principal amount outstanding and the percentage of average invested assets in mortgage-secured debt securities, was 30.98% of average invested assets of approximately $38,229,000 in assets under management. As we attempt to make mortgage loans that maximize interest income, we may make longer term fixed-rate loans in our discretion in order to reduce the risk of downward interest rate fluctuations.

Our lending and investing decisions, including determination of a prospective borrower’s or church bond issuer’s financial credit worthiness, are made for us by our advisor. We have no employees. Employees and agents of our advisor conduct all aspects of our business, including (i) marketing and advertising; (ii) communication with prospective borrowers; (iii) processing loan applications; (iv) closing loans; (v) servicing loans; and (vi) administering our day-to-day business activities. In consideration of its services, the advisor is entitled to receive a fee equal to 1.25% annually of the Company’s average invested assets up to $35 million. This fee is reduced to 1.00% on assets from $35 million to $50 million. In addition, we pay, to the advisor, one half of any origination fee charged to borrowers on mortgage loans we make. The advisor’s management fees are computed and payable monthly.

Current First Mortgage Loan Terms

We offer prospective borrowers a selection of loan types, which include a choice of fixed or variable rates of interest indexed to the prime rate, the U.S. Treasury 10-Year Notes, or another generally recognized reference index, and having various terms to maturity, origination fees and other terms and conditions. The terms of loans we offer may be changed by our advisor as a result of such factors as (i) the credit quality and experience of the borrowers; (ii) the terms of loans in our portfolio; (iii) competition from other lenders; (iv) anticipated need to increase the overall yield on our mortgage loan portfolio; (v) local and national economic factors; and (vi) actual experience in borrowers’ demand for the loans. We currently make the loan types described in the table below.

This table describes material terms of loans available from us. The table does not purport to identify all possible terms, rates, and fees we may offer. We may modify the terms identified below or offer loan terms different than those identified below. Many loans are individually negotiated and differ from the terms described below.

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Loan Type	Interest Rate (1)	Origination Fee (2)
20/25 Year Term (3)	Fixed @ 7.95%/8.25% respectively	3.5%
20 Year Term (3)	Variable Annually @ Prime + 4.00%	3.5%
3 Year Renewable Term (4)	Fixed @ 7.25%	3.0%
Construction/Interim 1 Year Term	Fixed @ 8.00% to 9.00%	2.0%

________________________________________

(1) “Prime” means the prime rate of interest charged to preferred customers, as published by a federally chartered bank chosen by us. We may also tie our offered interest rates to other indices.

(2) These are “target” fees and negotiation of these fees with borrowers can occur. Origination fees are generally based on the original principal amount of the loan and are collected from the borrower at the origination and renewal of loans, one half of which is payable directly to our Advisor.

(3) Fully amortized repayment term. Amortization terms may vary, as may other loan terms, depending on individual loan negotiations and competitive forces.

(4) Renewable term loans are repaid based on a 25 year amortization schedule, and are renewable at the conclusion of their initial term for additional like terms up to an aggregated maximum of 25 years. We charge a fee of 1% upon the date of each renewal. If renewed by the borrower, the interest rate is adjusted upon renewal to Prime plus a specified percentage “spread.”

Portfolio of the Company

As of June 30, 2017, we had sixty-one first mortgage loans aggregating $24,905,108 in original principal amount and three second mortgage loans aggregating $225,871 in original principal amount and purchased $13,505,598 principal amount first mortgage bonds issued by churches.

The table below identifies, by state, the loan amounts and amounts outstanding of the Company’s mortgage loans as of June 30, 2017.

American Church Mortgage Company
Current Loan Portfolio

State		Number of Loans in the State		Loan Amount		Principal Balance as of 6/30/17		Percentage of Total
	AR		1	$	225,000.00	$	29,992.20		0.12	%
	AZ		1	$	600,000.00	$	574,426.14		2.29	%
	CA		2	$	530,000.00	$	493,127.29		1.96	%
	CT		1	$	435,000.00	$	410,718.10		1.63	%
	FL		6	$	3,561,500.00	$	3,162,223.20		12.58	%
	GA		3	$	1,555,000.00	$	1,365,813.56		5.43	%
	IL		4	$	865,250.00	$	829,104.79		3.30	%
	IN		3	$	1,505,000.00	$	1,515,761.47		6.03	%
	LA		1	$	500,000.00	$	447,377.46		1.78	%
	MA		3	$	1,400,000.00	$	1,127,258.39		4.49	%
	MD		2	$	1,515,000.00	$	1,213,654.02		4.83	%
	MI		3	$	1,364,000.00	$	1,264,333.75		5.03	%
	MN		2	$	431,250.00	$	372,308.52		1.48	%
	NC		3	$	1,630,915.00	$	985,587.11		3.92	%
	NJ		1	$	427,500.00	$	384,228.60		1.53	%
	NY		5	$	3,715,000.00	$	1,932,528.10		7.69	%
	OH		6	$	1,955,000.00	$	1,502,286.62		5.98	%
	OR		1	$	445,000.00	$	308,315.86		1.23	%
	PA		2	$	1,300,000.00	$	842,606.57		3.35	%
	TX		10	$	4,725,500.00	$	4,507,520.47		17.94	%

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VA	3	$	1,320,000.00	$	1,164,255.64	4.63	%
WV	1	$	780,000.00	$	697,551.52	2.78	%
Totals:		$	30,785,915.00	$	25,130,979.38	100.00	%

The table below identifies the borrowing institutions and certain key terms of the loans comprising our loan portfolio as of June 30, 2017.

Loan	Loan Amount	Term in Years	Interest Rate	Appraised Value	Funding Date
Praise Chapel International	$115,000	5 years	10.00%	175,000	03/02/99
Freewill Christian Center (Second Loan)	$596,000	20 years	10.00%	797,000	06/22/99
Praise Christian Center Church	$500,000	20 years	9.85%	926,000	01/21/00
St. Paul AME Church	$200,000	20 years	10.25%	325,000	11/02/00
Second Missionary Baptist Church	$225,000	20 years	10.25%	370,000	06/19/01
Nehemiah Christian Outreach Ministries	$115,000	3 years	8.50%	140,000	05/30/02
House of Joy and Praise Outreach Center	$435,000	20 years	9.25%	780,000	12/30/02
Life Changing Faith Christian Church	$460,000	20 years	9.00%	690,000	03/12/03
Zion Hill Baptist Church	$255,000	20 years	8.65%	690,000	05/30/03
Bend Christian Center (Refinance)	$445,000	25 years	8.65%	101,000	06/19/03
Glad Tidings Community Church	$663,000	25 years	8.75%	900,000	06/30/03
Praise Tabernacle Jamaica (Refinance)	$600,000	20 years	8.65%	950,143	11/25/03
Praise Tabernacle Deliverance (Refinance) (Second Mtg)	$50,000	25 years	8.35%	1,058,000	12/19/03
Faith Christian Center	$475,000	20 years	8.65%	746,000	04/21/04
Shiloh Temple House of God	$500,000	20 years	8.25%	710,000	04/29/04
The Lord Jesus Christ Church on the Rock	$195,000	20 years	8.25%	300,000	07/09/04
Holy Tabernacle Ministries	$325,000	25 years	8.50%	500,000	09/16/04
Christ Wonderful World Outreach	$543,000	20 years	8.25%	725,000	11/03/04
Covenant Love Christian Center	$785,000	20 years	8.25%	1,200,000	11/10/04
New Life Community Church of Truth	$570,000	20 years	8.25%	790,000	11/30/04
Zion Mission	$410,000	25 years	8.50%	800,000	02/04/05
Inter-Denominational Fellowship Ministries (Refinance)	$315,000	25 years	8.75%	491,000	04/06/05
Mt. Ararat Baptist Church (Refinance)	$215,000	25 years	8.95%	1,000,000	04/24/05
True Vine Baptist Church	$198,500	25 years	8.75%	265,000	06/01/05
Calvary Baptist Church of Houston	$250,000	25 years	8.95%	350,000	06/29/05
International Deliverance Center	$518,000	25 years	1.00%	738,000	06/30/05
Unity of Faith Worship Center (Refinance)	$424,915	30 years	8.75%	835,150	06/30/05
Iglesia de Dios Pentecostal MI	$775,000	25 years	8.75%	1,008,484	07/13/05
Defenders Faith Center	$260,000	25 years	8.95%	470,000	11/29/05
Abundant Faith Baptist Church	$206,000	25 years	8.75%	500,000	02/15/06
Grace Christian Center (Refinance)	$1,600,000	25 years	8.50%	2,225,000	03/30/06
Living Water Seventh-Day Adventist Church	$640,000	30 years	8.75%	855,000	05/23/06
Serenity Church of God in Christ (Refinance)	$250,000	30 years	8.95%	370,909	06/13/06
Iglesia Nueva Vida en Cristo	$195,000	30 years	8.75%	233,000	06/28/06
Norman Quintero Ministries	$275,000	25 years	9.00%	383,000	08/15/06
Church of God of Prophecy of the Last Days	$497,000	30 years	8.95%	710,000	12/07/06

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Loan	Loan Amount	Terms in Years	Interest Rate	Appraised Value	Funding Date
Sword of the Word Evangelistic Ministry	$800,000	25 years	8.75%	1,650,000	12/20/06
The Church of the Living God - Full Gospel Ministries	$1,055,000	30 years	8.75%	1,875,000	12/21/06
Anchored in Faith Ministries (Refinance)	$675,000	25 years	9.25%	900,000	09/19/07
New Maranatha-Karibu SDA Church	$427,500	30 years	8.95%	570,000	10/18/07
Greater St. Andrews AME Church	$440,000	30 years	8.95%	1,250,000	11/01/07
Burning Bush Worship Center	$450,000	30 years	8.95%	600,000	12/03/07
Rock Spring Church	$780,000	30 years	8.50%	1,425,000	12/12/07
Believers New Life Ministries	$266,000	25 years	8.25%	395,000	07/02/08
Guiding Light Apostolic Church	$430,000	25 years	8.25%	1,250,000	08/20/08
Victory Church	$1,100,000	25 years	7.50%	1,500,000	09/05/08
Iglesia Pentecosted Alpha & Omega	$236,250	25 years	8.75%	317,000	09/25/08
Norman Quintero Ministries (Kiest Blvd)	$645,000	5 years	6.50%	1,500,000	09/30/08
New Stranger's Home Baptist Church	$350,000	30 years	8.50%	3,000,000	12/22/08
Family Center Church of God in Christ (Includes $15,500 2nd)	$249,500	25 years	7.50%	600,000	04/29/09
Hope for You Family Life and Worship Center	$470,000	25 years	8.95%	637,000	04/29/11
Treasures From Heaven Ministries, Inc.	$500,000	5 years	5.50%	630,000	07/12/12
Christ's Oasis Ministries, Inc.	$365,000	3 years	7.25%	460,000	08/05/13
Iglesia Emmanuel Antelope Valley	$180,000	30 years	8.50%	215,000	12/06/13
Centro Cristiano Carismatico	$600,000	25 years	8.00%	2,640,000	06/09/14
Faithway Baptist Church	$225,000	25 years	8.00%	300,000	11/12/14
Pembroke Park C.O.G.I.C.	$1,085,000	25 years	8.50%	3,220,000	12/15/14
Praise Christian Center World Outreach	$1,680,000	20 years	8.25%	2,800,000	11/24/15
Triple-R-Real Estate (Tyler Texas Property	$100,000	3 years	0.00%	100,000	02/26/16
St. Michael House of Prayer	$280,250	3 years	5.00%	280,250	03/10/16
Christ's Oasis Ministries, Inc. (2nd Mortgage)	$170,000	5 years	8.25%	2,050,000	12/20/16
Global Christian Ministries (Bridge Loan)	$1,185,000	1 year	6.95%	4,300,000	03/22/17
Iglesia De Dios Del Espiritu Santo (Bridge Loan)	$960,000	1 year	6.95%	1,250,000	06/30/17

The following church bonds, which are secured by mortgages, were held by the Company as of June 30, 2017. Each of these bonds is callable at any time by the issuer at par.

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
AGAPE ASSEMBLY BAPTIST CHURCH*	$487,575	Various	4.00%	4.00%	4.00%	5/15/2037	12/15/2014
AGAPE ASSEMBLY BAPTIST CHURCH (Second Mortgage Bond)*	$538,023	$538,023	4.00%	4.00%	4.00%	9/15/2037	12/15/2014
BAYNORTH CHURCH OF CHRIST	$1,000	$1,000	6.75%	6.75%	6.75%	1/15/2033	1/15/2017
BAYNORTH CHURCH OF CHRIST	$10,000	$10,000	7.00%	7.00%	7.00%	7/15/2033	1/15/2017
BAYNORTH CHURCH OF CHRIST	$10,000	$10,000	7.00%	7.00%	7.00%	1/15/2037	1/15/2017
BAYNORTH CHURCH OF CHRIST	$5,000	$5,000	7.00%	7.00%	7.00%	7/15/2037	1/15/2017
BAYNORTH CHURCH OF CHRIST	$31,000	$31,000	7.00%	7.00%	7.00%	7/15/2041	1/15/2017
BAYNORTH CHURCH OF CHRIST	$34,000	$34,000	7.00%	7.00%	7.00%	1/15/2042	1/15/2017

32

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
BETHANY BAPTIST CHURCH OF BALTIMORE CITY	$5,000	$4,850	8.00%	8.25%	8.32%	12/15/2030	12/15/2005
BETHANY BAPTIST CHURCH OF BALTIMORE CITY	$3,000	$3,000	8.00%	8.00%	8.00%	12/15/2030	12/15/2005
BETHANY BAPTIST CHURCH OF BALTIMORE CITY	$10,000	$10,000	7.50%	7.50%	7.50%	12/15/2022	12/15/2005
CALVARY PRESBYTERIAN CHURCH OF GHANA	$44,000	$44,000	8.00%	8.00%	8.00%	1/1/2038	7/1/2014
CALVARY PRESBYTERIAN CHURCH OF GHANA	$45,000	$45,000	8.00%	8.00%	8.00%	7/1/2038	7/1/2014
CALVARY PRESBYTERIAN CHURCH OF GHANA	$48,000	$48,000	8.00%	8.00%	8.00%	1/1/2039	7/1/2014
CALVARY PRESBYTERIAN CHURCH OF GHANA	$48,000	$48,000	8.00%	8.00%	8.00%	7/1/2039	7/1/2014
CALVARY TABERNACLE INC	$13,000	$13,000	5.00%	5.00%	5.00%	6/15/2021	12/15/2013
CALVARY TABERNACLE INC	$35,000	$35,000	5.25%	5.25%	5.25%	12/15/2021	12/15/2013
CALVARY TABERNACLE INC	$41,000	$41,000	5.25%	5.25%	5.25%	6/15/2022	12/15/2013
CALVARY TABERNACLE INC	$13,000	$13,000	5.50%	5.50%	5.50%	12/15/2022	12/15/2013
CALVARY TABERNACLE INC	$11,000	$11,000	5.50%	5.50%	5.50%	6/15/2023	12/15/2013
CALVARY TABERNACLE INC	$21,000	$21,000	5.75%	5.75%	5.75%	12/15/2023	12/15/2013
CALVARY TABERNACLE INC	$35,000	$35,000	5.75%	5.75%	5.75%	6/15/2024	12/15/2013
CALVARY TABERNACLE INC	$45,000	$45,000	6.00%	6.00%	6.00%	12/15/2025	12/15/2013
CALVARY TABERNACLE INC	$58,000	$58,000	6.00%	6.00%	6.00%	6/15/2026	12/15/2013
CALVARY TABERNACLE INC	$52,000	$52,000	6.00%	6.00%	6.00%	12/15/2026	12/15/2013
CALVARY TABERNACLE INC	$61,000	$61,000	6.00%	6.00%	6.00%	6/15/2027	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.00%	6.00%	6.00%	12/15/2027	12/15/2013
CALVARY TABERNACLE, INC.	$34,000	$34,000	6.00%	6.00%	6.00%	12/15/2027	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	6/15/2028	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	6/15/2028	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	12/15/2028	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	12/15/2028	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	6/15/2029	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	6/15/2029	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	12/15/2029	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.25%	6.25%	6.25%	12/15/2029	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.50%	6.50%	6.50%	6/15/2030	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.50%	6.50%	6.50%	6/15/2030	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.50%	6.50%	6.50%	12/15/2030	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.50%	6.50%	6.50%	12/15/2030	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.50%	6.50%	6.50%	6/15/2031	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.50%	6.50%	6.50%	6/15/2031	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	6.75%	6.75%	6.75%	12/15/2031	12/15/2013
CALVARY TABERNACLE, INC.	$2,000	$2,000	7.00%	7.00%	7.00%	12/15/2033	12/15/2013
CALVARY TABERNACLE, INC.	$18,000	$18,000	7.00%	7.00%	7.00%	6/15/2035	12/15/2013
CALVARY TABERNACLE, INC.	$25,000	$25,000	7.25%	7.25%	7.25%	6/15/2037	12/15/2013
CALVARY TABERNACLE, INC.	$13,000	$13,000	7.25%	7.25%	7.25%	6/15/2037	12/15/2013
CENTENNIAL STAR OF BETHLEHEM CHURCH	$1,000	$1,000	7.25%	7.25%	7.25%	3/1/2019	3/1/2003

33

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
CENTENNIAL STAR OF BETHLEHEM CHURCH	$5,000	$5,000	7.25%	7.25%	7.25%	3/1/2020	3/1/2003
CENTENNIAL STAR OF BETHLEHEM CHURCH	$6,000	$5,820	7.75%	8.51%	7.99%	9/1/2026	3/1/2003
CHRIST BIBLE TEACHING CENTER	$3,000	$2,910	7.75%	8.13%	7.99%	7/15/2024	7/15/2005
CHRIST BIBLE TEACHING CENTER	$3,000	$2,910	8.00%	8.25%	8.34%	7/15/2028	7/15/2005
CHRIST FELLOWSHIP BAPTIST CHURCH	$1,000	$1,000	7.00%	7.00%	7.00%	6/1/2018	6/1/2006
CHRIST FELLOWSHIP BAPTIST CHURCH	$1,000	$1,000	7.25%	7.25%	7.25%	12/1/2019	6/1/2006
CHRIST FELLOWSHIP BAPTIST CHURCH	$10,000	$10,000	7.25%	7.25%	7.25%	6/1/2021	6/1/2006
CHRIST FELLOWSHIP BAPTIST CHURCH	$5,000	$5,000	8.00%	8.00%	8.00%	6/1/2026	6/1/2006
CHRIST FELLOWSHIP BAPTIST CHURCH	$10,000	$10,000	8.00%	8.00%	8.00%	12/1/2029	6/1/2006
CHRIST FELLOWSHIP BAPTIST CHURCH	$25,000	$25,000	7.00%	7.00%	7.00%	9/15/2038	9/15/2016
CHRIST FELLOWSHIP BAPTIST CHURCH	$175,000	$175,000	7.00%	7.00%	7.00%	9/15/2041	9/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$12,000	$12,000	6.75%	6.75%	6.75%	5/15/2033	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$1,000	$1,000	7.50%	7.50%	7.50%	3/15/2030	9/15/2012
CHRIST'S OASIS MINISTRIES, INC.	$3,000	$3,000	6.75%	6.75%	6.75%	11/15/2032	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$37,000	$37,000	7.75%	7.75%	7.75%	9/15/2036	9/15/2012
CHRIST'S OASIS MINISTRIES, INC.	$130,000	$130,000	7.75%	7.75%	7.75%	3/15/2037	9/15/2012
CHRIST'S OASIS MINISTRIES, INC.	$133,000	$133,000	7.75%	7.75%	7.75%	9/15/2037	9/15/2012
CHRIST'S OASIS MINISTRIES, INC.	$2,000	$2,000	7.00%	7.00%	7.00%	5/15/2038	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$50,000	$50,000	7.00%	7.00%	7.00%	11/15/2039	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$50,000	$50,000	7.00%	7.00%	7.00%	5/15/2040	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$50,000	$50,000	7.00%	7.00%	7.00%	11/15/2040	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$50,000	$50,000	7.00%	7.00%	7.00%	5/15/2041	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$3,000	$3,000	7.00%	7.00%	7.00%	5/15/2041	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$50,000	$50,000	7.00%	7.00%	7.00%	11/15/2041	11/15/2016
CHRIST'S OASIS MINISTRIES, INC.	$24,000	$24,000	7.00%	7.00%	7.00%	11/15/2041	11/15/2016
COPPERAS COVE UNITY MISSIONARY BAPTIST	$3,000	$3,000	8.25%	8.25%	8.25%	2/15/2031	2/15/2008
COPPERAS COVE UNITY MISSIONARY BAPTIST	$15,000	$15,000	8.50%	8.50%	8.50%	8/15/2038	2/15/2008
COPPERAS COVE UNITY MISSIONARY BAPTIST	$43,000	$43,000	8.50%	8.50%	8.50%	2/15/2039	2/15/2008
CULLEN MISSIONARY BAPTIST CHURCH	$42,000	$42,000	8.50%	8.50%	8.50%	5/15/2038	11/15/2008
CULLEN MISSIONARY BAPTIST CHURCH	$43,000	$43,000	8.50%	8.50%	8.50%	11/15/2038	11/15/2008
DIVINE GOSPEL MISSION INTERNATIONAL	$9,000	$9,000	7.25%	7.25%	7.25%	12/15/2017	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$5,000	$5,000	7.25%	7.25%	7.25%	6/15/2018	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$5,000	$5,000	7.25%	7.25%	7.25%	12/15/2018	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$5,000	$5,000	7.25%	7.25%	7.25%	6/15/2019	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$6,000	$6,000	7.25%	7.25%	7.25%	12/15/2019	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$6,000	$6,000	7.25%	7.25%	7.25%	6/15/2020	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$7,000	$7,000	7.25%	7.25%	7.25%	6/15/2021	12/15/2016

34

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
DIVINE GOSPEL MISSION INTERNATIONAL	$6,000	$6,000	7.25%	7.25%	7.25%	12/15/2021	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$7,000	$7,000	7.25%	7.25%	7.25%	6/15/2022	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$7,000	$7,000	7.25%	7.25%	7.25%	12/15/2022	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$7,000	$7,000	7.25%	7.25%	7.25%	6/15/2023	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$8,000	$8,000	7.25%	7.25%	7.25%	12/15/2023	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$8,000	$8,000	7.25%	7.25%	7.25%	6/15/2024	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$8,000	$8,000	7.25%	7.25%	7.25%	12/15/2024	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$8,000	$8,000	7.25%	7.25%	7.25%	6/15/2025	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$9,000	$9,000	7.25%	7.25%	7.25%	12/15/2025	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$9,000	$9,000	7.25%	7.25%	7.25%	6/15/2026	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$10,000	$10,000	7.25%	7.25%	7.25%	12/15/2026	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$10,000	$10,000	7.25%	7.25%	7.25%	6/15/2027	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$10,000	$10,000	7.25%	7.25%	7.25%	12/15/2027	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$11,000	$11,000	7.25%	7.25%	7.25%	6/15/2028	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$11,000	$11,000	7.25%	7.25%	7.25%	12/15/2028	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$12,000	$12,000	7.25%	7.25%	7.25%	6/15/2029	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$12,000	$12,000	7.25%	7.25%	7.25%	12/15/2029	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$12,000	$12,000	7.25%	7.25%	7.25%	6/15/2030	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$13,000	$13,000	7.25%	7.25%	7.25%	12/15/2030	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$14,000	$14,000	7.25%	7.25%	7.25%	6/15/2031	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$14,000	$14,000	7.25%	7.25%	7.25%	12/15/2031	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$15,000	$15,000	7.25%	7.25%	7.25%	6/15/2032	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$15,000	$15,000	7.25%	7.25%	7.25%	12/15/2032	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$16,000	$16,000	7.25%	7.25%	7.25%	6/15/2033	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$16,000	$16,000	7.25%	7.25%	7.25%	12/15/2033	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$17,000	$17,000	7.25%	7.25%	7.25%	6/15/2034	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$17,000	$17,000	7.25%	7.25%	7.25%	12/15/2034	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$18,000	$18,000	7.25%	7.25%	7.25%	6/15/2035	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$19,000	$19,000	7.25%	7.25%	7.25%	12/15/2035	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$20,000	$20,000	7.25%	7.25%	7.25%	6/15/2036	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$20,000	$20,000	7.25%	7.25%	7.25%	12/15/2036	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$21,000	$21,000	7.25%	7.25%	7.25%	6/15/2037	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$22,000	$22,000	7.25%	7.25%	7.25%	12/15/2037	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$23,000	$23,000	7.25%	7.25%	7.25%	6/15/2038	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$24,000	$24,000	7.25%	7.25%	7.25%	12/15/2038	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$25,000	$25,000	7.25%	7.25%	7.25%	6/15/2039	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$25,000	$25,000	7.25%	7.25%	7.25%	12/15/2039	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$27,000	$27,000	7.25%	7.25%	7.25%	6/15/2040	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$27,000	$27,000	7.25%	7.25%	7.25%	12/15/2040	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$29,000	$29,000	7.25%	7.25%	7.25%	6/15/2041	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$29,000	$29,000	7.25%	7.25%	7.25%	12/15/2041	12/15/2016
DIVINE GOSPEL MISSION INTERNATIONAL	$6,000	$6,000	7.25%	7.25%	7.25%	15/15/2020	12/15/2016

35

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
FIRST LOVE FELLOWSHIP, INC.	$5,000	$4,450	7.75%	8.50%	8.15%	1/15/2024	7/15/2006
FIRST LOVE FELLOWSHIP, INC.	$5,000	$5,000	8.00%	8.00%	8.00%	7/15/2028	7/15/2006
FIRST LOVE FELLOWSHIP, INC.	$1,000	$1,000	7.75%	7.75%	7.75%	7/15/2023	7/15/2006
FROM THE HEART CHURCH MINISTRIES, INC.	$10,000	$10,000	7.25%	7.25%	7.25%	7/15/2018	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$12,000	$12,000	7.25%	7.25%	7.25%	1/15/2022	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$22,000	$22,000	7.25%	7.25%	7.25%	7/15/2022	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$2,000	$2,000	7.25%	7.25%	7.25%	7/15/2022	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$32,000	$32,000	7.25%	7.25%	7.25%	1/15/2023	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$6,000	$6,000	7.25%	7.25%	7.25%	7/15/2024	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$13,000	$13,000	7.25%	7.25%	7.25%	1/15/2025	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$68,000	$68,000	7.25%	7.25%	7.25%	7/15/2025	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$47,000	$47,000	7.25%	7.25%	7.25%	1/15/2026	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$125,000	$125,000	7.25%	7.25%	7.25%	7/15/2026	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$6,000	$6,000	7.25%	7.25%	7.25%	1/15/2027	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$2,000	$2,000	7.25%	7.25%	7.25%	1/15/2027	7/15/2012
FROM THE HEART CHURCH MINISTRIES, INC.	$42,000	$42,000	7.25%	7.25%	7.25%	7/15/2027	7/15/2012
GREATER HOLY TRINITY	$33,000	$33,000	9.45%	9.45%	9.45%	12/15/2017	2/15/2006
GREATER HOLY TRINITY	$36,000	$36,000	9.55%	9.55%	9.55%	6/15/2018	2/15/2006
GREATER HOLY TRINITY	$36,000	$36,000	9.55%	9.55%	9.55%	12/15/2018	2/15/2006
GREATER HOLY TRINITY	$38,000	$38,000	9.65%	9.65%	9.65%	6/15/2019	2/15/2006
GREATER HOLY TRINITY	$40,000	$40,000	9.65%	9.65%	9.65%	12/15/2019	2/15/2006
GREATER HOLY TRINITY	$42,000	$42,000	9.65%	9.65%	9.65%	6/15/2020	2/15/2006
GREATER HOLY TRINITY	$44,000	$44,000	9.75%	9.75%	9.75%	12/15/2020	2/15/2006
GREATER HOLY TRINITY	$45,000	$45,000	9.75%	9.75%	9.75%	6/15/2021	2/15/2006
GREATER HOLY TRINITY	$56,000	$56,000	9.75%	9.75%	9.75%	12/15/2021	2/15/2006
GREATER ST. MATTHEW BAPTIST CHURCH	$16,000	$16,000	3.50%	3.50%	3.50%	2/1/2019	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$16,000	$16,000	3.75%	3.75%	3.75%	8/1/2019	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$17,000	$17,000	4.00%	4.00%	4.00%	2/1/2020	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$17,000	$17,000	4.00%	4.00%	4.00%	8/1/2020	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$17,000	$17,000	4.25%	4.25%	4.25%	2/1/2021	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$18,000	$18,000	4.50%	4.50%	4.50%	8/1/2021	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$18,000	$18,000	4.75%	4.75%	4.75%	2/1/2022	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$25,000	$25,000	5.00%	5.00%	5.00%	8/1/2022	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$26,000	$26,000	5.25%	5.25%	5.25%	2/1/2023	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$14,000	$14,000	5.50%	5.50%	5.50%	8/1/2023	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$13,000	$13,000	5.75%	5.75%	5.75%	2/1/2024	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$25,000	$25,000	6.00%	6.00%	6.00%	8/1/2024	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$19,000	$19,000	6.00%	6.00%	6.00%	2/1/2025	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$15,000	$15,000	6.00%	6.00%	6.00%	8/1/2025	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$20,000	$20,000	6.00%	6.00%	6.00%	2/1/2026	2/1/2016

36

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
GREATER ST. MATTHEW BAPTIST CHURCH	$15,000	$15,000	2.75%	2.75%	2.75%	8/1/2017	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$15,000	$15,000	3.00%	3.00%	3.00%	2/1/2018	2/1/2016
GREATER ST. MATTHEW BAPTIST CHURCH	$15,000	$15,000	3.25%	3.25%	3.25%	8/1/2018	2/1/2016
GREATER TRAVELER'S REST BAPTIST CHURCH	$100,000	$100,000	5.75%	5.75%	5.75%	1/15/2026	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$100,000	$100,000	6.25%	6.25%	6.25%	1/15/2030	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$50,000	$50,000	7.00%	7.00%	7.00%	1/15/2034	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$10,000	$10,000	7.00%	7.00%	7.00%	7/15/2034	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$100,000	$100,000	7.00%	7.00%	7.00%	7/15/2035	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$106,000	$106,000	7.00%	7.00%	7.00%	7/15/2035	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$78,000	$78,000	7.00%	7.00%	7.00%	7/15/2035	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$50,000	$50,000	7.00%	7.00%	7.00%	7/15/2036	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$141,000	$141,000	7.00%	7.00%	7.00%	7/15/2036	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$143,000	$143,000	5.25%	5.25%	5.25%	1/15/2024	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$2,000	$2,000	8.00%	8.00%	8.00%	3/1/2024	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$400,000	$400,000	6.00%	6.00%	6.00%	1/15/2027	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$200,000	$200,000	6.75%	6.75%	6.75%	1/15/2033	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$300,000	$300,000	7.00%	7.00%	7.00%	1/15/2035	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$69,000	$69,000	7.00%	7.00%	7.00%	1/15/2035	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$500,000	$500,000	7.00%	7.00%	7.00%	1/15/2036	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$550,000	$550,000	7.00%	7.00%	7.00%	1/15/2037	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$21,000	$21,000	7.00%	7.00%	7.00%	1/15/2037	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$100,000	$100,000	7.00%	7.00%	7.00%	7/15/2037	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$570,000	$570,000	7.00%	7.00%	7.00%	1/15/2038	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$550,000	$550,000	7.00%	7.00%	7.00%	1/15/2039	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$30,000	$30,000	7.00%	7.00%	7.00%	1/15/2039	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$101,000	$101,000	7.00%	7.00%	7.00%	7/15/2039	1/15/2015
GREATER TRAVELER'S REST BAPTIST CHURCH	$50,000	$50,000	7.00%	7.00%	7.00%	1/15/2040	1/15/2015
GREATER WORKS CHURCH OF GOD IN CHRIST	$1,000	$1,000	5.00%	5.00%	5.00%	7/1/2020	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$4,000	$4,000	5.00%	5.00%	5.00%	1/1/2021	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$1,000	$1,000	5.25%	5.25%	5.25%	7/1/2021	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$6,000	$6,000	5.25%	5.25%	5.25%	1/1/2022	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$4,000	$4,000	5.50%	5.50%	5.50%	7/1/2022	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$7,000	$7,000	5.50%	5.50%	5.50%	1/1/2023	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$1,000	$1,000	5.75%	5.75%	5.75%	7/1/2023	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$7,000	$7,000	5.75%	5.75%	5.75%	1/1/2024	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$1,000	$1,000	6.00%	6.00%	6.00%	7/1/2025	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$8,000	$8,000	6.00%	6.00%	6.00%	1/1/2026	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$9,000	$9,000	6.00%	6.00%	6.00%	7/1/2026	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$9,000	$9,000	6.00%	6.00%	6.00%	1/1/2027	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$4,000	$4,000	6.00%	6.00%	6.00%	7/1/2027	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$2,000	$2,000	6.25%	6.25%	6.25%	7/1/2028	7/1/2013

37

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
GREATER WORKS CHURCH OF GOD IN CHRIST	$2,000	$2,000	6.25%	6.25%	6.25%	1/1/2029	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$4,000	$4,000	6.25%	6.25%	6.25%	7/1/2029	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$13,000	$13,000	6.50%	6.50%	6.50%	7/1/2032	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$13,000	$13,000	6.50%	6.50%	6.50%	1/1/2033	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$2,000	$2,000	7.00%	7.00%	7.00%	7/1/2038	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$31,000	$31,000	8.00%	8.00%	8.00%	10/15/2038	7/1/2013
GREATER WORKS CHURCH OF GOD IN CHRIST	$41,000	$41,000	8.00%	8.00%	8.00%	4/15/2039	7/1/2013
HIS TABERNACLE FAMILY CHURCH	$20,000	$20,000	6.25%	6.25%	6.25%	4/15/2029	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$20,000	$20,000	6.25%	6.25%	6.25%	10/15/2029	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$25,000	$25,000	6.50%	6.50%	6.50%	4/15/2030	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$2,000	$2,000	6.50%	6.50%	6.50%	4/15/2030	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$22,000	$22,000	6.50%	6.50%	6.50%	10/15/2030	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$30,000	$30,000	6.50%	6.50%	6.50%	10/15/2031	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$42,000	$42,000	6.50%	6.50%	6.50%	4/15/2032	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$27,000	$27,000	6.75%	6.75%	6.75%	4/15/2036	10/15/2013
HIS TABERNACLE FAMILY CHURCH	$20,000	$20,000	7.00%	7.00%	7.00%	4/15/2038	10/15/2013
INTEGRITY CHURCH INTERNATIONAL	$5,000	$4,850	7.75%	8.12%	7.99%	9/15/2025	3/15/2003
INTEGRITY CHURCH INTERNATIONAL	$5,000	$5,000	7.75%	7.75%	7.75%	9/15/2025	3/15/2003
INTEGRITY CHURCH INTERNATIONAL	$5,000	$5,000	7.25%	7.25%	7.25%	3/15/2019	3/15/2003
MT. JOYNER MISSIONARY BAPTIST CHURCH	$1,000	$1,000	8.00%	8.00%	8.00%	1/15/2023	1/15/2008
MT. JOYNER MISSIONARY BAPTIST CHURCH	$10,000	$10,000	8.00%	8.00%	8.00%	7/15/2028	1/15/2008
MT. JOYNER MISSIONARY BAPTIST CHURCH	$1,000	$1,000	8.25%	8.25%	8.25%	1/15/2035	1/15/2008
NEW BEGINNING MISSIONARY BAPTIST CHURCH	$2,000	$2,000	8.00%	8.00%	8.00%	7/15/2031	7/15/2008
NEW CREATION OUTREACH MINISTRIES	$3,000	$3,000	5.00%	5.00%	5.00%	7/1/2023	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$15,000	$15,000	5.75%	5.75%	5.75%	7/1/2025	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$27,000	$27,000	6.00%	6.00%	6.00%	1/1/2026	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$9,000	$9,000	6.00%	6.00%	6.00%	7/1/2027	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$19,000	$19,000	6.00%	6.00%	6.00%	1/1/2029	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$12,000	$12,000	6.25%	6.25%	6.25%	7/1/2029	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$20,000	$20,000	6.25%	6.25%	6.25%	1/1/2030	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$23,000	$23,000	6.50%	6.50%	6.50%	7/1/2030	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$29,000	$29,000	6.50%	6.50%	6.50%	1/1/2031	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$2,000	$2,000	6.75%	6.75%	6.75%	7/1/2032	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$20,000	$20,000	6.75%	6.75%	6.75%	7/1/2032	7/1/2015
NEW CREATION OUTREACH MINISTRIES	$15,000	$15,000	6.75%	6.75%	6.75%	1/1/2033	7/1/2015
NEW LIFE CHRISTIAN CENTER, INC.	$1,000	$1,000	8.25%	8.25%	8.25%	2/1/2024	2/1/2007
NEW LIFE CHRISTIAN CENTER, INC.	$5,000	$5,000	8.00%	8.00%	8.00%	2/1/2026	2/1/2007

38

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
NORTH CAROLINA COLLEGE OF THEOLOGY	$4,000	$4,000	4.25%	4.25%	4.25%	10/1/2017	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	4.50%	4.50%	4.50%	4/1/2018	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	4.50%	4.50%	4.50%	10/1/2018	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	4.75%	4.75%	4.75%	4/1/2019	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	5.00%	5.00%	5.00%	10/1/2019	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	5.00%	5.00%	5.00%	4/1/2020	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	5.00%	5.00%	5.00%	10/1/2020	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$6,000	$6,000	5.25%	5.25%	5.25%	4/1/2021	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$6,000	$6,000	5.25%	5.25%	5.25%	10/1/2021	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$6,000	$6,000	5.50%	5.50%	5.50%	4/1/2022	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$6,000	$6,000	5.50%	5.50%	5.50%	10/1/2022	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$6,000	$6,000	5.75%	5.75%	5.75%	4/1/2023	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$6,000	$6,000	5.75%	5.75%	5.75%	10/1/2023	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$7,000	$7,000	6.00%	6.00%	6.00%	4/1/2024	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$7,000	$7,000	6.00%	6.00%	6.00%	10/1/2024	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$7,000	$7,000	6.00%	6.00%	6.00%	4/1/2025	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	6.50%	6.50%	6.50%	7/15/2025	1/15/2014
NORTH CAROLINA COLLEGE OF THEOLOGY	$7,000	$7,000	6.00%	6.00%	6.00%	10/1/2025	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$5,000	$5,000	6.50%	6.50%	6.50%	1/15/2026	1/15/2014
NORTH CAROLINA COLLEGE OF THEOLOGY	$7,000	$7,000	6.25%	6.25%	6.25%	4/1/2026	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$14,000	$14,000	6.50%	6.50%	6.50%	7/15/2026	1/15/2014
NORTH CAROLINA COLLEGE OF THEOLOGY	$7,000	$7,000	6.25%	6.25%	6.25%	10/1/2026	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$2,000	$2,000	6.75%	6.75%	6.75%	1/15/2027	1/15/2014
NORTH CAROLINA COLLEGE OF THEOLOGY	$8,000	$8,000	6.50%	6.50%	6.50%	4/1/2027	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$1,000	$1,000	6.75%	6.75%	6.75%	7/15/2027	1/15/2014
NORTH CAROLINA COLLEGE OF THEOLOGY	$8,000	$8,000	6.50%	6.50%	6.50%	10/1/2027	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$8,000	$8,000	6.75%	6.75%	6.75%	4/1/2028	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$12,000	$12,000	6.75%	6.75%	6.75%	7/15/2028	1/15/2014
NORTH CAROLINA COLLEGE OF THEOLOGY	$9,000	$9,000	6.75%	6.75%	6.75%	10/1/2028	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$9,000	$9,000	7.00%	7.00%	7.00%	4/1/2029	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$9,000	$9,000	7.00%	7.00%	7.00%	10/1/2029	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$10,000	$10,000	7.00%	7.00%	7.00%	4/1/2030	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$10,000	$10,000	7.00%	7.00%	7.00%	10/1/2030	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$10,000	$10,000	7.00%	7.00%	7.00%	4/1/2031	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$11,000	$11,000	7.00%	7.00%	7.00%	10/1/2031	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$11,000	$11,000	7.00%	7.00%	7.00%	4/1/2032	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$12,000	$12,000	7.00%	7.00%	7.00%	10/1/2032	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$12,000	$12,000	7.25%	7.25%	7.25%	4/1/2033	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$12,000	$12,000	7.25%	7.25%	7.25%	10/1/2033	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$13,000	$13,000	7.25%	7.25%	7.25%	4/1/2034	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$13,000	$13,000	7.25%	7.25%	7.25%	10/1/2034	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$14,000	$14,000	7.25%	7.25%	7.25%	4/1/2035	4/1/2015

39

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
NORTH CAROLINA COLLEGE OF THEOLOGY	$14,000	$14,000	7.25%	7.25%	7.25%	10/1/2035	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$15,000	$15,000	7.50%	7.50%	7.50%	4/1/2036	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$16,000	$16,000	7.50%	7.50%	7.50%	10/1/2036	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$16,000	$16,000	7.50%	7.50%	7.50%	4/1/2037	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$17,000	$17,000	7.75%	7.75%	7.75%	10/1/2037	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$17,000	$17,000	7.75%	7.75%	7.75%	4/1/2038	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$18,000	$18,000	7.75%	7.75%	7.75%	10/1/2038	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$19,000	$19,000	8.00%	8.00%	8.00%	4/1/2039	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$20,000	$20,000	8.00%	8.00%	8.00%	10/1/2039	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$20,000	$20,000	8.00%	8.00%	8.00%	4/1/2040	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$71,000	$71,000	8.00%	8.00%	8.00%	11/15/2040	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$71,000	$71,000	8.00%	8.00%	8.00%	5/15/2041	4/1/2015
NORTH CAROLINA COLLEGE OF THEOLOGY	$71,000	$71,000	8.00%	8.00%	8.00%	11/15/2041	4/1/2015
REFUGE WAY OF THE CROSS	$2,000	$2,000	4.50%	4.50%	4.50%	11/15/2021	5/15/2016
REFUGE WAY OF THE CROSS	$5,000	$5,000	4.75%	4.75%	4.75%	11/15/2021	5/15/2016
REFUGE WAY OF THE CROSS	$9,000	$9,000	5.25%	5.25%	5.25%	5/15/2025	5/15/2016
REFUGE WAY OF THE CROSS	$4,000	$4,000	5.50%	5.50%	5.50%	11/15/2025	5/15/2016
REFUGE WAY OF THE CROSS	$19,000	$19,000	5.50%	5.50%	5.50%	5/15/2026	5/15/2016
REFUGE WAY OF THE CROSS	$16,000	$16,000	5.75%	5.75%	5.75%	11/15/2026	5/15/2016
REFUGE WAY OF THE CROSS	$30,000	$30,000	5.75%	5.75%	5.75%	5/15/2027	5/15/2016
REFUGE WAY OF THE CROSS	$1,000	$1,000	6.00%	6.00%	6.00%	11/15/2027	5/15/2016
REFUGE WAY OF THE CROSS	$9,000	$9,000	6.00%	6.00%	6.00%	5/15/2028	5/15/2016
REFUGE WAY OF THE CROSS	$14,000	$14,000	6.00%	6.00%	6.00%	11/15/2028	5/15/2016
REFUGE WAY OF THE CROSS	$7,000	$7,000	6.25%	6.25%	6.25%	5/15/2029	5/15/2016
REFUGE WAY OF THE CROSS	$4,000	$4,000	6.25%	6.25%	6.25%	11/15/2029	5/15/2016
REFUGE WAY OF THE CROSS	$16,000	$16,000	6.25%	6.25%	6.25%	11/15/2029	5/15/2016
REFUGE WAY OF THE CROSS	$37,000	$37,000	6.25%	6.25%	6.25%	5/15/2030	5/15/2016
REFUGE WAY OF THE CROSS	$37,000	$37,000	6.25%	6.25%	6.25%	5/15/2030	5/15/2016
REFUGE WAY OF THE CROSS	$10,000	$10,000	6.50%	6.50%	6.50%	5/15/2031	5/15/2016
REFUGE WAY OF THE CROSS	$9,000	$9,000	6.50%	6.50%	6.50%	11/15/2031	5/15/2016
REFUGE WAY OF THE CROSS	$18,000	$18,000	7.00%	7.00%	7.00%	5/15/2035	5/15/2016
REFUGE WAY OF THE CROSS	$50,000	$50,000	7.00%	7.00%	7.00%	5/15/2039	5/15/2016
REFUGE WAY OF THE CROSS	$35,000	$35,000	7.00%	7.00%	7.00%	11/15/2039	5/15/2016
REFUGE WAY OF THE CROSS	$24,000	$24,000	7.00%	7.00%	7.00%	11/15/2040	5/15/2016
REFUGE WAY OF THE CROSS	$3,000	$3,000	7.00%	7.00%	7.00%	11/15/2040	5/15/2016
REFUGE WAY OF THE CROSS	$76,000	$76,000	7.00%	7.00%	7.00%	5/15/2041	5/15/2016
SANCTUARY OF FAITH	$18,000	$18,000	7.00%	7.00%	7.00%	4/15/2039	4/15/2015
SANCTUARY OF FAITH	$25,000	$25,000	7.00%	7.00%	7.00%	10/15/2039	4/15/2015
SANCTUARY OF FAITH	$16,000	$16,000	7.00%	7.00%	7.00%	10/15/2039	4/15/2015
SANCTUARY OF FAITH	$25,000	$25,000	7.00%	7.00%	7.00%	4/15/2040	4/15/2015
SANCTUARY OF FAITH	$16,000	$16,000	7.00%	7.00%	7.00%	4/15/2040	4/15/2015

40

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
SOUL REAPERS WORSHIP CENTER	$16,000	$16,000	7.50%	7.50%	7.50%	5/15/2041	9/15/2015
SOUL REAPERS WORSHIP CENTER	$16,000	$16,000	7.50%	7.50%	7.50%	11/15/2041	9/15/2015
SOUL REAPERS WORSHIP CENTER	$26,000	$26,000	7.50%	7.50%	7.50%	5/15/2042	9/15/2015
SOUL REAPERS WORSHIP CENTER	$36,000	$36,000	7.50%	7.50%	7.50%	11/15/2042	9/15/2015
SOUL REAPERS WORSHIP CENTER	$38,000	$38,000	7.50%	7.50%	7.50%	5/15/2043	9/15/2015
SOUL REAPERS WORSHIP CENTER	$40,000	$40,000	7.50%	7.50%	7.50%	11/15/2043	9/15/2015
SOUL REAPERS WORSHIP CENTER	$43,000	$43,000	7.50%	7.50%	7.50%	5/15/2044	9/15/2015
SOUL REAPERS WORSHIP CENTER	$44,000	$44,000	7.50%	7.50%	7.50%	11/15/2044	9/15/2015
SOUL REAPERS WORSHIP CENTER	$45,000	$45,000	7.50%	7.50%	7.50%	5/15/2045	9/15/2015
SOUL REAPERS WORSHIP CENTER	$47,000	$47,000	7.50%	7.50%	7.50%	11/15/2045	9/15/2015
SOUL REAPERS WORSHIP CENTER	$49,000	$49,000	7.50%	7.50%	7.50%	5/15/2046	9/15/2015
SOUL REAPERS WORSHIP CENTER	$15,000	$15,000	8.00%	8.00%	8.00%	3/15/2032	9/15/2015
SOUL REAPERS WORSHIP CENTER	$16,000	$16,000	8.00%	8.00%	8.00%	9/15/2032	9/15/2015
SOUL REAPERS WORSHIP CENTER	$17,000	$17,000	8.00%	8.00%	8.00%	3/15/2033	9/15/2015
SOUL REAPERS WORSHIP CENTER	$18,000	$18,000	8.00%	8.00%	8.00%	9/15/2033	9/15/2015
SOUL REAPERS WORSHIP CENTER	$18,000	$18,000	8.00%	8.00%	8.00%	3/15/2034	9/15/2015
SOUL REAPERS WORSHIP CENTER	$19,000	$19,000	8.00%	8.00%	8.00%	9/15/2034	9/15/2015
SOUL REAPERS WORSHIP CENTER	$20,000	$20,000	8.00%	8.00%	8.00%	3/15/2035	9/15/2015
SOUL REAPERS WORSHIP CENTER	$20,000	$20,000	8.00%	8.00%	8.00%	9/15/2035	9/15/2015
SOUL REAPERS WORSHIP CENTER	$22,000	$22,000	8.00%	8.00%	8.00%	3/15/2036	9/15/2015
SOUL REAPERS WORSHIP CENTER	$22,000	$22,000	8.00%	8.00%	8.00%	9/15/2036	9/15/2015
SOUL REAPERS WORSHIP CENTER	$23,000	$23,000	8.00%	8.00%	8.00%	3/15/2037	9/15/2015
SOUL REAPERS WORSHIP CENTER	$24,000	$24,000	8.00%	8.00%	8.00%	9/15/2037	9/15/2015
SOUL REAPERS WORSHIP CENTER	$25,000	$25,000	8.00%	8.00%	8.00%	3/15/2038	9/15/2015
SOUL REAPERS WORSHIP CENTER	$26,000	$26,000	8.00%	8.00%	8.00%	9/15/2038	9/15/2015
SOUL REAPERS WORSHIP CENTER	$27,000	$27,000	8.00%	8.00%	8.00%	3/15/2039	9/15/2015
SOUL REAPERS WORSHIP CENTER	$28,000	$28,000	8.00%	8.00%	8.00%	9/15/2039	9/15/2015
SOUL REAPERS WORSHIP CENTER	$30,000	$30,000	8.00%	8.00%	8.00%	3/15/2040	9/15/2015
SOUL REAPERS WORSHIP CENTER	$30,000	$30,000	8.00%	8.00%	8.00%	9/15/2040	9/15/2015
SOUL REAPERS WORSHIP CENTER	$32,000	$32,000	8.00%	8.00%	8.00%	3/15/2041	9/15/2015
SOUL REAPERS WORSHIP CENTER	$33,000	$33,000	8.00%	8.00%	8.00%	9/15/2041	9/15/2015
SOUL REAPERS WORSHIP CENTER	$35,000	$35,000	8.00%	8.00%	8.00%	3/15/2042	9/15/2015
THE HOUSE OF REFUGE APOSTOLIC CHURCH	$1,000	$1,000	8.00%	8.00%	8.00%	8/15/2030	11/15/2007
THE HOUSE OF REFUGE APOSTOLIC CHURCH	$57,000	$57,000	8.75%	8.75%	8.75%	8/15/2037	11/15/2007
THE HOUSE OF REFUGE APOSTOLIC CHURCH	$62,000	$62,000	8.65%	8.65%	8.65%	6/15/2038	11/15/2007
THE HOUSE OF REFUGE APOSTOLIC CHURCH	$63,000	$63,000	8.65%	8.65%	8.65%	12/15/2038	11/15/2007
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$3,000	$3,000	6.75%	6.75%	6.75%	11/1/2018	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$4,000	$4,000	6.75%	6.75%	6.75%	5/1/2019	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$4,000	$4,000	7.00%	7.00%	7.00%	11/1/2019	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$5,000	$5,000	7.00%	7.00%	7.00%	5/1/2020	5/1/2009

41

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$5,000	$5,000	7.00%	7.00%	7.00%	11/1/2020	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$6,000	$6,000	7.50%	7.50%	7.50%	11/1/2022	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$1,000	$1,000	7.50%	7.50%	7.50%	5/1/2023	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$2,000	$2,000	7.50%	7.50%	7.50%	11/1/2023	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$6,000	$6,000	7.75%	7.75%	7.75%	5/1/2024	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$7,000	$7,000	7.75%	7.75%	7.75%	11/1/2024	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$7,000	$7,000	7.75%	7.75%	7.75%	5/1/2025	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$1,000	$1,000	8.00%	8.00%	8.00%	11/1/2025	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$8,000	$8,000	8.00%	8.00%	8.00%	5/1/2026	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$8,000	$8,000	8.00%	8.00%	8.00%	11/1/2026	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$8,000	$8,000	8.00%	8.00%	8.00%	5/1/2027	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$9,000	$9,000	8.00%	8.00%	8.00%	11/1/2027	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$9,000	$9,000	8.00%	8.00%	8.00%	5/1/2028	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$9,000	$9,000	8.00%	8.00%	8.00%	11/1/2028	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$10,000	$10,000	8.00%	8.00%	8.00%	5/1/2029	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$11,000	$11,000	8.00%	8.00%	8.00%	5/1/2030	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$1,000	$1,000	8.25%	8.25%	8.25%	5/1/2031	5/1/2009
THE MOUNT PISGAH MISSIONARY BAPTIST CHURCH	$1,000	$1,000	8.25%	8.25%	8.25%	5/1/2032	5/1/2009
THE NEW YORK DONG YANG FIRST CHURCH	$5,000	$5,000	7.25%	7.25%	7.25%	12/1/2018	12/1/2003
THE SANCTUARY OF WILMINGTON	$2,000	$2,000	5.50%	5.50%	5.50%	4/15/2022	4/15/2013
THE SANCTUARY OF WILMINGTON	$1,000	$1,000	5.75%	5.75%	5.75%	4/15/2023	4/15/2013
THE SANCTUARY OF WILMINGTON	$2,000	$2,000	5.75%	5.75%	5.75%	10/15/2023	4/15/2013
THE SANCTUARY OF WILMINGTON	$1,000	$1,000	6.00%	6.00%	6.00%	4/15/2024	4/15/2013
THE SANCTUARY OF WILMINGTON	$1,000	$1,000	6.00%	6.00%	6.00%	10/15/2024	4/15/2013
THE SANCTUARY OF WILMINGTON	$3,000	$3,000	6.00%	6.00%	6.00%	4/15/2025	4/15/2013
THE SANCTUARY OF WILMINGTON	$49,000	$49,000	6.00%	6.00%	6.00%	4/15/2026	4/15/2013
THE SANCTUARY OF WILMINGTON	$52,000	$52,000	6.00%	6.00%	6.00%	10/15/2026	4/15/2013
THE SANCTUARY OF WILMINGTON	$32,000	$32,000	6.25%	6.25%	6.25%	10/15/2027	4/15/2013
THE SANCTUARY OF WILMINGTON	$55,000	$55,000	6.25%	6.25%	6.25%	4/15/2028	4/15/2013
THE SANCTUARY OF WILMINGTON	$49,000	$49,000	6.25%	6.25%	6.25%	10/15/2028	4/15/2013
THE SANCTUARY OF WILMINGTON	$57,000	$57,000	6.25%	6.25%	6.25%	4/15/2029	4/15/2013
THE SANCTUARY OF WILMINGTON	$12,000	$12,000	6.50%	6.50%	6.50%	10/15/2030	4/15/2013
THE SANCTUARY OF WILMINGTON	$67,000	$67,000	6.50%	6.50%	6.50%	4/15/2031	4/15/2013
THE SANCTUARY OF WILMINGTON	$57,000	$57,000	6.50%	6.50%	6.50%	10/15/2031	4/15/2013
THE SANCTUARY OF WILMINGTON	$25,000	$25,000	6.75%	6.75%	6.75%	4/15/2034	4/15/2013
THE SANCTUARY OF WILMINGTON	$13,000	$13,000	6.75%	6.75%	6.75%	10/15/2034	4/15/2013
THE SANCTUARY OF WILMINGTON	$8,000	$8,000	7.00%	7.00%	7.00%	4/15/2038	4/15/2013
THE SANCTUARY OF WILMINGTON	$51,000	$51,000	6.00%	6.00%	6.00%	4/15/2027	4/15/2013
THE SANCTUARY OF WILMINGTON	$25,000	$25,000	6.00%	6.00%	6.00%	10/15/2025	4/15/2013
UNITY BAPTIST CHURCH	$20,000	$20,000	5.75%	5.75%	5.75%	2/15/2025	8/15/2013

42

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
UNITY BAPTIST CHURCH	$20,000	$20,000	6.00%	6.00%	6.00%	8/15/2026	8/15/2013
UNITY BAPTIST CHURCH	$1,000	$1,000	6.25%	6.25%	6.25%	2/15/2027	8/15/2013
UNITY BAPTIST CHURCH	$7,000	$7,000	6.25%	6.25%	6.25%	8/15/2027	8/15/2013
UNITY BAPTIST CHURCH	$52,000	$52,000	6.25%	6.25%	6.25%	2/15/2028	8/15/2013
UNITY BAPTIST CHURCH	$48,000	$48,000	6.25%	6.25%	6.25%	8/15/2028	8/15/2013
UNITY BAPTIST CHURCH	$3,000	$3,000	6.50%	6.50%	6.50%	2/15/2029	8/15/2013
UNITY BAPTIST CHURCH	$11,000	$11,000	6.50%	6.50%	6.50%	8/15/2029	8/15/2013
UNITY BAPTIST CHURCH	$11,000	$11,000	6.50%	6.50%	6.50%	2/15/2030	8/15/2013
UNITY BAPTIST CHURCH	$2,000	$2,000	6.50%	6.50%	6.50%	8/15/2030	8/15/2013
VERITAS CHAPEL	$4,000	$4,000	2.75%	2.75%	2.75%	10/15/2017	4/15/2016
VERITAS CHAPEL	$4,000	$4,000	3.00%	3.00%	3.00%	4/15/2018	4/15/2016
VERITAS CHAPEL	$4,000	$4,000	3.25%	3.25%	3.25%	10/15/2018	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	3.50%	3.50%	3.50%	4/15/2019	4/15/2016
VERITAS CHAPEL	$4,000	$4,000	3.75%	3.75%	3.75%	10/15/2019	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	4.00%	4.00%	4.00%	4/15/2020	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	4.00%	4.00%	4.00%	10/15/2020	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	4.25%	4.25%	4.25%	4/15/2021	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	4.50%	4.50%	4.50%	10/15/2021	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	4.50%	4.50%	4.50%	4/15/2022	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	4.75%	4.75%	4.75%	10/15/2022	4/15/2016
VERITAS CHAPEL	$6,000	$6,000	5.00%	5.00%	5.00%	4/15/2023	4/15/2016
VERITAS CHAPEL	$5,000	$5,000	5.00%	5.00%	5.00%	10/15/2023	4/15/2016
VERITAS CHAPEL	$6,000	$6,000	5.00%	5.00%	5.00%	04/15/2024	4/15/2016
VERITAS CHAPEL	$6,000	$6,000	5.25%	5.25%	5.25%	10/15/2024	4/15/2016
VERITAS CHAPEL	$6,000	$6,000	5.00%	5.00%	5.00%	4/15/2025	4/15/2016
VERITAS CHAPEL	$6,000	$6,000	5.50%	5.50%	5.50%	10/15/2025	4/15/2016
VERITAS CHAPEL	$7,000	$7,000	5.50%	5.50%	5.50%	4/15/2026	4/15/2016
VERITAS CHAPEL	$6,000	$6,000	5.75%	5.75%	5.75%	10/15/2026	4/15/2016
VERITAS CHAPEL	$7,000	$7,000	5.75%	5.75%	5.75%	4/15/2027	4/15/2016
VERITAS CHAPEL	$7,000	$7,000	6.00%	6.00%	6.00%	10/15/2027	4/15/2016
VERITAS CHAPEL	$7,000	$7,000	6.00%	6.00%	6.00%	4/15/2028	4/15/2016
VERITAS CHAPEL	$7,000	$7,000	6.00%	6.00%	6.00%	10/15/2028	4/15/2016
VERITAS CHAPEL	$8,000	$8,000	6.00%	6.00%	6.00%	4/15/2029	4/15/2016
VERITAS CHAPEL	$8,000	$8,000	6.25%	6.25%	6.25%	10/15/2029	4/15/2016
VERITAS CHAPEL	$8,000	$8,000	6.25%	6.25%	6.25%	4/15/2030	4/15/2016
VERITAS CHAPEL	$8,000	$8,000	6.50%	6.50%	6.50%	10/15/2030	4/15/2016
VERITAS CHAPEL	$9,000	$9,000	6.50%	6.50%	6.50%	4/15/2031	4/15/2016
VERITAS CHAPEL	$9,000	$9,000	6.75%	6.75%	6.75%	10/15/2031	4/15/2016
VERITAS CHAPEL	$9,000	$9,000	6.75%	6.75%	6.75%	4/15/2032	4/15/2016
VERITAS CHAPEL	$10,000	$10,000	7.00%	7.00%	7.00%	10/15/2032	4/15/2016
VERITAS CHAPEL	$10,000	$10,000	7.00%	7.00%	7.00%	4/15/2033	4/15/2016
VERITAS CHAPEL	$10,000	$10,000	7.00%	7.00%	7.00%	10/15/2033	4/15/2016

43

Issuer	Principal Amount	Purchase Price	Coupon	Yield to Maturity	Current Yield	Maturity Date	Original Issue Date
VERITAS CHAPEL	$11,000	$11,000	7.00%	7.00%	7.00%	4/15/2034	4/15/2016
VERITAS CHAPEL	$11,000	$11,000	7.00%	7.00%	7.00%	10/15/2034	4/15/2016
VERITAS CHAPEL	$12,000	$12,000	7.00%	7.00%	7.00%	4/15/2035	4/15/2016
VERITAS CHAPEL	$12,000	$12,000	7.00%	7.00%	7.00%	10/15/2035	4/15/2016
VERITAS CHAPEL	$12,000	$12,000	7.00%	7.00%	7.00%	4/15/2036	4/15/2016
VERITAS CHAPEL	$13,000	$13,000	7.00%	7.00%	7.00%	10/15/2036	4/15/2016
VERITAS CHAPEL	$13,000	$13,000	7.00%	7.00%	7.00%	4/15/2037	4/15/2016
VERITAS CHAPEL	$14,000	$14,000	7.00%	7.00%	7.00%	10/15/2037	4/15/2016
VERITAS CHAPEL	$14,000	$14,000	7.00%	7.00%	7.00%	4/15/2038	4/15/2016
VERITAS CHAPEL	$15,000	$15,000	7.00%	7.00%	7.00%	10/15/2038	4/15/2016
VERITAS CHAPEL	$15,000	$15,000	7.00%	7.00%	7.00%	4/15/2039	4/15/2016
VERITAS CHAPEL	$16,000	$16,000	7.00%	7.00%	7.00%	10/15/2039	4/15/2016
VERITAS CHAPEL	$17,000	$17,000	7.00%	7.00%	7.00%	4/15/2040	4/15/2016
VERITAS CHAPEL	$17,000	$17,000	7.00%	7.00%	7.00%	10/15/2040	4/15/2016
VERITAS CHAPEL	$18,000	$18,000	7.00%	7.00%	7.00%	4/15/2041	4/15/2016

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*Agape Assembly Baptist Church is currently in default.

Mortgage Loan Processing and Underwriting

Our advisor’s personnel process and verify mortgage loan applications. Verification procedures are designed to assure a borrower’s qualification under our Lending Guidelines. Verification procedures include obtaining:

· applications containing key information concerning the prospective borrower

· project description

· financial statements of the prospective borrower

· organizational documents and history of the borrower

· preliminary title report or commitment for mortgagee title insurance

· a real estate appraisal in accordance with our Lending Guidelines

We require that appraisals and financial statements be prepared by independent third-party professionals who are pre-approved based on their experience, reputation and education. Completed loan applications, together with a written summary are presented by a loan analyst to our loan committee for consideration. Our loan committee is usually comprised of both our advisor’s president and our advisor’s vice-president, but at times also includes our advisor’s loan officer/administrator and other officers and employees of the advisor and the advisor’s affiliates. Once the loan committee has met and evaluated and discussed a potential loan, the loan is approved or denied, typically by consensus. If accepted, the loan, the terms of which may have been revised by the committee, is then presented to the potential borrower, who may, from time to time, be permitted to negotiate additional revisions. Once a borrower has accepted a loan proposal, however, it must submit a good faith deposit. At that point, a loan officer of our advisor may begin the loan preparation process by arranging for certain services on behalf of the borrower, in order to achieve pricing and timing efficiencies. Such services may include, but are not limited to: the provision of mortgage title insurance and for the services of professional independent third-party accountants and appraisers regarding delivery of title commitments, preliminary title reports, title policies, environmental evaluations, financial statements, and appraisals meeting our loan lending criteria. Our advisor may arrange for the direct payment for professional services and for the direct reimbursement to it of related expenditures by borrowers and prospective borrowers. Upon closing and funding of mortgage loans, an origination fee based on the original principal amount of each loan is generally charged, of which one-half is payable to us and one-half is payable to our advisor. We may charge a fee to recoup expenses we have incurred. This fee would be calculated based on funds we have paid for appraisal, accounting and title

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work. These costs are usually paid by borrowers from proceeds at closing. We may not recoup these fees if a commitment fee is not charged.

Loan Commitments

Subsequent to approval by our loan committee, and prior to funding a loan, we issue a loan commitment to qualified applicants. We may charge a loan commitment fee, but typically do not. Commitments indicate the loan amount, origination fees, closing costs, underwriting expenses (if any), funding conditions, approval expiration dates, interest rate and other terms. Commitments generally set forth a “prevailing” interest rate that is subject to change in accordance with market interest rate fluctuations until the final loan closing documents are prepared. In certain cases we may establish (“lock-in”) interest rate commitments up to sixty days from the commitment to closing. Interest rate commitments beyond sixty days will not normally be issued unless we receive a fee premium based upon the assessment of the risk associated with a longer “lock-in” period.

Loan Portfolio Management

Our advisor manages and services our portfolio of mortgage loans in accordance with an advisory agreement. Our advisor is responsible for all aspects of our mortgage loan business, including:

· closing and recording of mortgage documents

· collecting principal and interest payments

· enforcing loan terms and other borrower’s requirements

· periodic review of each mortgage loan file

· determination of reserve classifications

· exercising our remedies in connection with defaulted or non-performing loans

Fees and costs of attorneys, insurance, bonds and other direct expenses incurred in connection with the exercise of remedies in connection with a loan default are our responsibility, although they may be recouped from the borrower in the process of pursuing our remedies. Our advisor will not receive any additional compensation for services rendered in connection with ongoing loan portfolio management or exercising our remedies in the event of a loan default.

Loan Funding and Borrowing

Our mortgage loans and purchases of church bonds are funded with available cash resources. Historically, we have obtained cash resources from the sale of our common stock, the repayment of our investments in loans and bonds or the sale of certificates. We may use the proceeds of the sale of certificates to fund mortgage loans and purchase church bonds. We may borrow up to 300% of Stockholders’ equity, unless greater amounts are permitted under certain circumstances.

Lending Guidelines

Our business of mortgage lending to churches and other non-profit religious organizations is managed in accordance with and subject to our Lending Guidelines. Our Lending Guidelines identify our general business guidelines and the parameters of our lending business.

· Loans we make are limited to churches and other non-profit religious organizations and are secured by mortgages. The total principal amount of our second mortgage loans is limited to 20% of our average invested assets. All other loans and bonds will be secured by first mortgages.

· The total principal amount of mortgage-secured debt securities we purchase from churches and other non-profit religious organizations is limited to 30% of our average invested assets.

· The loan amount cannot exceed 75% of the appraised value of the real estate and improvements securing each loan. On all loans, we require a written appraisal certified by a member of the Appraisal Institute or a state-certified appraiser.

· The borrower must furnish us with an ALTA (American Land Title Association) or equivalent mortgagee title policy insuring our mortgage interest.

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· The borrower’s long-term debt (including the proposed loan) cannot exceed four times the borrower’s gross income for the previous 12 months.

· The borrower must furnish us with financial statements (balance sheet and income and expense statement) for its last three (3) complete fiscal years and current financial statements for the period within ninety (90) days of the loan closing date. A borrower must have the last complete fiscal year financial statements reviewed by a certified public accountant (CPA) engaged by the borrower and who is independent of the borrower. On loans in excess of $500,000 our advisor may require the last complete fiscal year be audited by a CPA engaged by the borrower and who is independent of the borrower. In lieu of the above requirement, we or our advisor may employ a qualified accountant. The qualified accountant we employ would be required to be independent of the borrower. Our employed qualified accountant would not be independent of us. Compiled financial statements of the borrower are acceptable from our employed qualified accountant. Along with the compiled financial statements of the borrower, our employed qualified accountant would perform partial and targeted review examination procedures for borrowers. On loans in excess of $500,000, the advisor may require partial and targeted audit examination procedures for borrowers.

· Borrowers in existence for less than three (3) fiscal years must provide financial statements since their inception. No loan will be extended to a borrower in operation less than two (2) calendar years absent express approval by our board of directors.

· Our advisor typically requires the borrower to arrange for automatic electronic or drafting of monthly payments.

· Our advisor may require (i) key-person life insurance on the life of the senior pastor of a church; (ii) personal guarantees of church members and/or affiliates; and (iii) other security enhancements for our benefit.

· The borrower must agree to provide us with annual financial statements within 120 days of each fiscal year end during the term of the loan.

· Our advisor may require the borrower to grant to us a security interest in all personal property located and to be located upon the mortgaged premises (excluding property leased by the borrower).

· We may make fixed-interest rate loans having maturities of three to thirty years.

· We may borrow up to 300% of Stockholders’ equity, unless greater amounts are permitted under certain circumstances.

We require borrowers to maintain a general perils and liability coverage insurance policy naming us as the loss-payee in connection with damage or destruction to the property of the borrower which typically includes weather-related damage, fire, vandalism and theft. In its discretion, our advisor may require the borrower to provide flood, earthquake and/or other special coverage.

These Lending Guidelines are in addition to the prohibited investments and activities set forth in our bylaws, which are discussed in the next section.

Prohibited Investments and Activities

Our bylaws impose certain prohibitions and restrictions on our investment practices and activities, including prohibitions against:

· Investing more than 10% of our total assets in unimproved real property or mortgage loans on unimproved real property;

· Investing in commodities or commodity futures contracts other than “interest rate futures” contracts intended only for hedging purposes;

· Investing in mortgage loans (including construction/interim loans) on any one property which in the aggregate with all other mortgage loans on the property would exceed 75% of the appraised value of the property unless substantial justification exists because of the presence of other underwriting criteria;

· Investing in mortgage loans that are subordinate to any mortgage or equity interest of our advisor or our directors or any of their affiliates;

· Investing in equity securities;

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· Engaging in any short sales of securities or in trading, as distinguished from investment activities;

· Issuing redeemable equity securities;

· Engaging in underwriting or the agency distribution of securities issued by others;

· Issuing options or warrants to purchase our shares at an exercise price less than the fair market value of the shares on the date of the issuance or if the issuance thereof would exceed 10% in the aggregate of our outstanding shares;

· Issuing debt securities unless the debt service coverage for the most recently completed fiscal year, as adjusted for known changes, is sufficient to properly service the higher level of debt;

· Investing in real estate contracts of sale unless such contracts are in recordable form and are appropriately recorded in the chain of title;

· Selling or leasing to our advisor, a director or any affiliate thereof unless approved as being fair and reasonable by a majority of directors (including a majority of independent directors), not otherwise interested in such transaction;

· Acquiring property from our advisor or any director, or any affiliate thereof (other than church bonds from American Investors Group, Inc. in the ordinary course of our investing activities), unless a majority of our directors (including a majority of our independent directors) not otherwise interested in such transaction approve the transaction as being fair and reasonable and at a price no greater than the cost of the asset to our advisor, director or any affiliate thereof, or if the price is in excess of such cost, that substantial justification for such excess exists and such excess is reasonable. In no event shall the cost of such asset exceed its current appraised value;

· Investing or making mortgage loans unless a mortgagee’s or owner’s title insurance policy or commitment as to the priority of the mortgage or condition of title is obtained; or

· Issuing our shares on a deferred payment basis or other similar arrangement.

We do not intend to invest in the securities of other issuers for the purpose of exercising control, to engage in the purchase and sale of investments other than as described in this prospectus, to offer securities in exchange for property unless deemed prudent by a majority of our directors, to repurchase or otherwise reacquire our shares or to make loans to other persons except in the ordinary course of our business as described herein.

We will not make loans to or borrow from, or enter into any contract, joint venture or transaction with, any director or officer of ours, our advisor or any affiliate of any of the foregoing unless a majority of our directors, including a majority of the independent directors, approves the transaction as fair and reasonable to us and the transaction is on terms and conditions no less favorable to us than those available from unaffiliated third parties. If we invest in any property, mortgage or other real estate interest pursuant to a transaction with our advisor or any directors or officers thereof, then the investment will be based upon a current appraisal of the underlying property from an independent qualified appraiser selected by the independent directors and will not be made at a price greater than fair market value as determined by such appraisal.

Policy Changes

Our bylaw relating to policies, prohibitions and restrictions referred to under “Our Business—Prohibited Investments and Activities” may not be changed (except in certain immaterial respects by a majority approval of the board of directors) without the approval of a majority of the independent directors and the approval of the holders of a majority of our shares, at a duly held meeting for that purpose.

Competition

The business of making loans to churches and non-profit religious organizations is competitive. We compete with a wide variety of investors, including banks, savings and loan associations, insurance companies, pension funds and fraternal organizations which may have investment objectives similar to ours. Many competitors have greater financial resources, larger staffs and longer operating histories than we have. We compete in this industry by limiting our business “niche” to lending to churches and other non-profit religious organizations, offering loans with competitive and flexible terms, and emphasizing our expertise in the specialized industry segment of lending to churches and other non-profit religious organizations.

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Allowance for Mortgage Loans Receivable

We record mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans. Our loan loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of a loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2017, we provided $1,363,782 for seventeen mortgage loans, of which seven loans totaling approximately $3,457,000 are three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 are declared to be in default and two loans totaling approximately $633,000 are in the foreclosure process. At December 31, 2016, we provided $1,311,983 for seventeen mortgage loans, of which seven totaling approximately $3,449,000 were three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 were declared to be in default and two loans totaling approximately $627,000 were in the foreclosure process.

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,858,000 and $1,853,000 at June 30, 2017 and December 31, 2016, respectively, which we believe are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $688,000 and $663,000 of our allowance for mortgage loans was allocated to impaired loans at June 30, 2017 and December 31, 2016, respectively.

Loan Loss Provision

We follow a loan loss reserve policy on our portfolio of loans outstanding. This critical policy requires complex judgments and estimates. We record mortgage loans receivable at their estimated net realizable value, which is the unpaid principal balance less the allowance for mortgage loans. Our loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy reserves for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan. Our policy will reserve for the outstanding principal amount of a loan in our portfolio if the amount is in doubt of being collected. Additionally, no interest income is recognized on impaired loans that are in the foreclosure process.

Real Estate Held for Sale/Description of Properties Acquired through Foreclosure

As of June 30, 2017, we had property acquired via deed in lieu of foreclosure, with outstanding loan balances totaling approximately $225,872. The Church is still occupying the property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. The fair value of our real estate held for sale, which represents the carrying value, is $225,872 as of June 30, 2017 after a reserve of approximately $12,000. The general competitive conditions surrounding the potential sale of our properties are tied, in large part, to the fact that they are special-use properties with variable zoning restrictions. We principally lend to churches, which are commonly exempt from zoning restrictions. However, while a church property may be exempt from zoning restrictions, if it is located in a residential area, it still may only be used as a church, thereby limiting the pool of potential buyers. On the other hand, a church or other property that is zoned for commercial use generally experiences higher demand, as potential buyers can convert the property to their own business use. As such, our properties that are located in residential areas typically experience less demand than those zoned for commercial use.

We sold one property and disposed of a second property during the six month period ended June 30, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. The Company realized an additional loss of approximately $67,000 on property that was sold as of June 30, 2017. The Company sold two properties during the six month period ended June 31, 2016. The two properties were sold for approximately $380,000. The Company provided seller financing to the borrowers. The Company realized an additional loss of approximately $52,000 on both properties as of June 30, 2016. We sold one property acquired through foreclosure for approximately $32,000 for the period ended June 30, 2016.

Description of the property we acquired via deed in lieu of foreclosure is listed below.

In 2008, we received a deed in lieu of foreclosure on a church located in Pine Bluff, Arkansas and have recorded the deed in the county where the church is located. Due to the value of the property ($360,000) versus the amount owed to us ($238,000), we have allowed the church to either obtain financing from another source or list the property for sale in hopes of recovering some of its equity. The church is paying us monthly rent until the property is refinanced or sold. We have included this property in Real Estate Held for Sale at $226,000 at June 30, 2017. This property is located in a residential area.

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Listed in the chart below are the foreclosure properties; the city and state in which the property is located; the principal balance outstanding; the reserve or write-down amount of the property; and the current value after realtor fees.

Location of Property Obtained Through Foreclosure	Principal Balance Owed		Reserve Amount		Carrying Value
Pine Bluff, Arkansas*	$	237,760	$	11,888	$	225,872
Totals:	$	237,760	$	11,888	$	225,872

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*This property was obtained through a deed in lieu of foreclosure

Our advisor, Church Loan Advisors, Inc., manages our properties held for sale but receives no additional compensation for this service. The advisor contracts with realtors to provide comparable sales data and has access to our properties to show to prospective buyers. We also engage maintenance personnel recommended by the local listing agent to perform routine maintenance to the properties including repairs to broken windows or doors and cutting of grass and management of weeds during the summer months. Our advisor also pays all bills, at our expense, for items such as insurance, taxes, utilities, alarm system monitoring and maintenance personnel. Our advisor is Church Loan Advisors, Inc., 10237 Yellow Circle Drive Minnetonka, Minnesota 55343, (952) 945-9455. Church Loan Advisors, Inc. has been our advisor since we began active business operations in April 1996.

Employees

We have no employees but we have two executive officers: Philip J. Myers, our Chief Executive Officer and President, and Scott J. Marquis, our Chief Financial Officer and Treasurer. However, our daily operations and other material aspects of our business are managed by Church Loan Advisors, Inc. (the “Advisor”) on a “turn-key” basis using employees of the Advisor and/or its Affiliates. At present, certain officers and directors of American and the Advisor are providing services to us at no charge and which will not be reimbursed to them. These services include, among others, legal and analytic services relating to the execution of our business plan, development and preparation of reports to be filed under the Securities Exchange Act, and utilization of proprietary forms and documents utilized by the Advisor in connection with our business operations.

Subject to the supervision of the board of directors, our business is managed by the Advisor, which provides us investment advisory and administrative services. Philip J. Myers, our Chief Executive Officer, President and a Director, is President of the Advisor and President of American Investors Group, Inc., the underwriter of our past public offerings. The Advisor utilizes two employees of American on a full-time basis and one employee of American on a part-time or other basis. The Company does not presently expect to directly employ anyone in the foreseeable future, since all of our administrative functions and operations are contracted through the Advisor. However, legal, accounting and certain other services are provided to us by outside professionals and paid by us directly.

MANAGEMENT

General

Directors are elected for a term expiring at the next annual meeting of our Stockholders and serve for one-year terms and until their successors are duly elected and qualified. Annual Stockholder meetings are typically held in May. Officers serve at the discretion of the board of directors. Among other requirements, in order to maintain our REIT status, a majority of our directors must be “independent.” Our executive officers and directors are as follows:

Name	Age	Office	Director Since
Philip J. Myers	61	President, Secretary and Chairman	2001
Scott J. Marquis	59	Chief Financial Officer and Treasurer	—
Kirbyjon H. Caldwell	63	Independent Director	1994
Dennis J. Doyle	65	Independent Director	1994
Michael G. Holmquist	67	Independent Director	2003

Philip J. Myers has been our Chairman, President and Secretary since April 2001. He has also served as President, Treasurer, Stockholder and a director of our Advisor, Church Loan Advisors, Inc. since 1994, President, Secretary, majority Stockholder and a director of American Investors Group, Inc., a registered broker-dealer, since 1996, and of its parent company, Apostle Holdings Corp. since 2000. Mr. Myers has been an officer and owner of American Investors Group, Inc. and has engaged directly in church mortgage lending since 1989. He earned his bachelor of arts degree in political science in 1977 from the State University of New York at Binghamton and his juris doctor degree from the State University of New York at Buffalo School of Law in 1980. From 1980 to 1982, Mr. Myers served as an attorney in the Division of Market Regulation of the U.S. Securities and Exchange Commission in Washington, D.C. and, from 1982 to 1984, as an attorney with the Division of Enforcement of the Securities and Exchange Commission in San Francisco. From August 1984 to January 1986, he was employed as an attorney with the San

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Francisco law firm of Wilson, Ryan and Compilongo where he specialized in corporate finance, securities and broker-dealer matters. From January 1986 to January 1989, Mr. Myers was Senior Vice President and General Counsel of Financial Planners Equity Corporation, a 400 broker securities dealer formerly located in Marin County, California. He became affiliated with American Investors Group, Inc. in 1989. He is an inactive member of the New York, California and Minnesota State Bar Associations. Mr. Myers holds General Securities Representative and General Securities Principal licenses with the Financial Industry Regulation Authority (FINRA). Mr. Myers’ 29 years of experience in church lending combined with the practice of law in the securities, corporate and regulatory arenas and his experience as a CEO afford him a comprehensive and broad based insight into managing the direction, opportunities and challenges of the Company.

Scott J. Marquis is our Chief Financial Officer and Treasurer. He was appointed to this position in September of 2009 by our board of directors. He is also currently employed full-time as Chief Financial and Operating Officer of the underwriter, American Investors Group, Inc., where he has been employed since February 1987. Prior to his employment with American Investors Group, Inc., Mr. Marquis was employed for approximately seven years with the Minneapolis-based broker-dealer, Piper Jaffray Companies in various capacities within its operations department. Mr. Marquis attended the University of Minnesota, Minneapolis, Minnesota and served in the United States Coast Guard Reserve (retired). Mr. Marquis is a licensed financial principal and registered representative of American Investors Group, Inc., holds his Series 7, 63 and 27 licenses from the Financial Industry National Regulatory Authority. Mr. Marquis’ knowledge of and experience in operating a public REIT company allow him to provide valuable insights to the board in its oversight of the Company’s operations as a REIT.

Kirbyjon H. Caldwell has served as an independent director of the Company since 1994. He has been Senior Pastor of Windsor Village United Methodist Church in Houston, Texas since January 1982. The membership of Windsor Village exceeds 17,000. Rev. Caldwell received his B.A. degree in Economics from Carlton College (1975), an M.B.A. in Finance from the University of Pennsylvania’s Wharton School (1977), and his Masters in Theology from Southern Methodist University School of Theology (1981). He is Chair of the Goverance & Nominating Committee, Inc. for NRG Energy and a member of the Amegy Bank Advisory Board, Bridgeway Capital Management Board, The Greater Houston Partnership Executive Committee, Houston Gold Assocation Executive Committee, Baylor College of Medicine Executive Committee and M.D. Anderson-The University Cancer Foundation. He is also the founder of community development organizations and a limited partner with the Houston Texans franchise. Pastor Caldwell brings to the Company’s board a unique combination of talents as a former financial services professional with and MBA and a leading denominational pastor with national recognition. He is uniquely qualified to advise management on the direction and thinking of church leaders, the principal market of the Company.

Dennis J. Doyle has served as an independent director of the Company since 1994. He is a Stockholder and co-founder of Welsh Companies, Inc., Minneapolis, Minnesota, a full-service real estate company involved in property management, brokerage, investment sales, construction and commercial development. Since 1977, he has held many positions within Welsh’s services business ranging from manual laborer to licensed broker to positions in executive management. He has served as Chief Executive Officer of Welsh since 1987. He continues to hold a real estate broker’s license in Minnesota. He is the general partner in the Wildamere Capital Management 10 million square foot portfolio of properties. Mr. Doyle is the founder and chief executive officer of Matter, a privately funded, not-for-profit organization established to fight poverty, hunger, and disease by utilizing corporate surplus. Mr. Doyle is a member of the board of director of Tradition Capital Bank. Mr. Doyle’s 30 years in real estate and years as the CEO of a growing commercial real estate company, in addition to his 20 years of service on the Company’s Board allows him to offer profound insight into the management of the Company’s real estate-based lending activities.

Michael G Holmquist has served as an independent director of the Company since 2003. Mr. Holmquist is a Certified Public Accountant practicing from his office in Minnetonka, Minnesota. Prior to entering the accounting field in 1977, he worked for two years as a public school teacher and served four years in the U.S. Coast Guard. He is a graduate of St. Olaf College. Mr. Holmquist was an original incorporator of American Investors Group and an employee of the firm from 1986-1989. Mr. Holmquist’s experience as a CPA and tax professional qualifies him to lead our Sarbanes-Oxley accounting compliance efforts as well as regularly evaluate our internal control and reporting procedures.

Day-to-Day Management of Operations

We have no employees. Our advisor manages our day-to-day operations under the advisory agreement. Our officers receive no compensation for their services, other than through their interests in our advisor and our affiliates. Our officers have no employment contracts with us or our advisor and are considered employees of the advisor “at will.” We believe that because of the depth of management of our advisor and its affiliates the loss of one or more key employees of our advisor, or one or more of our officers, would not have a material adverse effect upon our operations. As required by our bylaws, a majority of our directors are independent directors in that they are otherwise unaffiliated with and do not receive compensation from us (other than in their capacity as directors) or from our advisor or the underwriter.

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Duties of Directors

Our directors are responsible for considering and approving our policies. Directors meet as often and devote such time to our business as their oversight duties may require. Pursuant to our bylaws, the independent directors have the responsibility of evaluating the capability and performance of our advisor and determining that the compensation we pay to our advisor is reasonable. During 2016, our directors held four meetings. The attendance policy of the Board encourages and expects all board members to attend all Board meetings. During 2015, Mr. Myers, Mr. Doyle attended 100% of the meetings held, Mr. Holmquist attended two of the meetings while Reverend Caldwell attended one of the meetings held.

Neither our articles of incorporation or bylaws nor any of our policies restrict officers or directors from conducting, for their own account, or on behalf of others, business activities of the type we conduct.

Directors and officers have a duty to us and our Stockholders. Our directors may be removed by a majority vote of all shares outstanding and entitled to vote at any annual meeting or special meeting called for such purpose.

Executive Compensation

Since inception, the Company has not had employees. The Company has two executive officers, Philip J. Myers, who serves in several capacities and is not compensated for such position and Scott J. Marquis who serves as the Company’s Chief Financial Officer and Treasurer and is not compensated for such position. The Company’s business is managed by the Advisor. The actions and decisions of the Company and the Advisor are governed by the Company’s independent directors and by the Company’s Bylaws and the Advisory Agreement. Both of these documents substantially comply with the NASAA REIT Guidelines, which include substantive limitations on, among other things, conflicts of interest and related party transactions. As such, the Company has not adopted a Code of Ethics.

In addition, because the Company has no employees, and because neither Mr. Myers nor Mr. Marquis is compensated by the Company, there is no Company compensation committee. However, we currently pay each independent director $500 for each board meeting attended ($400 for telephonic meetings), limited to $2,500 per year. We also reimburse directors for travel expenses incurred in connection with their duties as our directors. Please see “Director Compensation.” As a non-independent director, Philip J. Myers receives no compensation or reimbursements in connection with his service on our board of directors.

Director Independence

Our board of directors has determined that each of Dennis J. Doyle, Kirbyjon H. Caldwell and Michael G. Holmquist are “independent,” as that term is defined in NASAA REIT Guidelines and in Rule 4200(a)(15) of the NASDAQ Marketplace Rules. Accordingly, the board is composed of a majority of independent directors. There are no transactions with the directors which were evaluated in connection with the board’s determination of the independence or which have not already been disclosed elsewhere in this registration statement.

Fiduciary Responsibility of Board of Directors and Indemnification

The board of directors and our advisor are accountable to us and to our Stockholders. Consequently, they must exercise good faith and integrity in handling our affairs. Similarly, our advisor has contractual obligations to us which it must discharge with the utmost good faith and integrity.

Our articles require us to indemnify and pay or reimburse reasonable expenses to any individual who is our present or former director, advisor or affiliate, provided that: (i) the director, advisor or affiliate seeking indemnification has determined, in good faith, that the course of conduct which caused the loss or liability was in our best interest; (ii) the director, advisor or affiliate seeking indemnification was acting on our behalf or performing services on our behalf; (iii) such liability or loss was not the result of negligence or misconduct on the part of the indemnified party, except that in the event the indemnified party is or was an independent director, such liability or loss shall not have been the result of gross negligence or willful misconduct; and (iv) such indemnification or agreement to be held harmless is recoverable only out of our assets and not from our Stockholders directly.

We may advance amounts to persons entitled to indemnification for legal and other expenses and costs incurred as a result of legal action instituted against or involving such person if: (i) the legal action relates to the performance of duties or services by the indemnified party for or on our behalf; (ii) the legal action is initiated by a third party who is not a Stockholder, or the legal action is initiated by a Stockholder acting in his or her capacity as such and a court specifically approves such advancement; and (iii) the indemnified party receiving such advances undertakes, in writing, to repay the advanced funds, with interest at the rate we determined, in cases in which such party would not be entitled to indemnification.

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Notwithstanding the foregoing, we may not indemnify our directors, advisor, or affiliates and any persons acting as a broker-dealer for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violations of securities laws.

Subject to the limitations described above, we have the power to purchase and maintain insurance on behalf of an indemnified party. We may procure insurance covering our liability for indemnification. The indemnification permitted by our Articles is more restrictive than permitted under the Minnesota Business Corporation Act.

Warrants and Options

In January 2003, we terminated our stock option plan for directors and the adviser and outstanding stock options were surrendered and cancelled. No options were exercised during the option plan’s existence. No options or warrants are outstanding as of the date of this Prospectus.

EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS; DIRECTOR COMPENSATION

The Company pays no compensation to its officers and has no other employees. The Company has no equity compensation plans. Because no compensation or equity awards have been awarded to, earned by or paid to any executive officer of the Company, the Company has not included any tables or charts describing executive compensation. However, compensation paid to our directors for the fiscal year ended December 31, 2016 is described below.

Name	Fees Earned or Paid in Cash (1)		Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Non-Qualified Incentive Plan Compensation	All Other Compensation		Total
Kirbyjon H. Caldwell	$	1,200	n/a	n/a	n/a	n/a	n/a		$	1,200
Dennis J. Doyle	$	1,600	n/a	n/a	n/a	n/a	n/a		$	1,600
Michael G. Holmquist	$	1,400	n/a	n/a	n/a	n/a	$	536 (2)	$	1,936
Philip J. Myers	n/a		n/a	n/a	n/a	n/a	n/a		—

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(1) All Directors, except Philip J. Myers, are paid $500 per board meeting attended ($400 for telephonic meetings), limited to $2,500 per year, and reimbursed for travel expenses incurred in connection with their duties as directors; no reimbursements were paid in 2016.

(2) Mr. Holmquist was paid an additional $536 during 2016 for auditing and testing the Company’s internal controls to determine if the Company has established and is maintaining an adequate system of controls as defined by Section 404 of the Sarbanes-Oxley Act of 2002

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth as of June 30, 2017, the number of shares beneficially owned by each director and by all executive officers and directors as a group, and the beneficial owner of 5% or more of our outstanding stock, based on 1,677,798 shares of common stock outstanding at that date. Unless otherwise noted, each of the following persons has sole voting and investment power with respect to the shares set forth opposite their respective names.

Name and Address of Beneficial Owner (1)	Number of Shares of Common Stock Beneficially Owned		Percent of Class
Philip J. Myers	83,687	(2)	4.98	%
Scott J. Marquis	1,300		.08	%
Kirbyjon H. Caldwell	—		—
Dennis J. Doyle	—		—
Michael H. Holmquist	319		.02	%
All Executive Officers and Directors as a Group (five individuals)	85,306		5.08	%

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(1) The address for each Director is 10237 Yellow Circle Drive, Minnetonka, Minnesota 55343.

(2) This number includes 25,014 shares owned directly by Mr. Myers and 58,673 shares owned by Apostle Holdings Corp., an affiliate of our Advisor, which is 100% owned by Mr. Myers.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Our advisor, Church Loan Advisors, Inc., manages our business subject to the supervision of our board of directors. Our advisor provides us with lending, marketing, management and administrative services. Our President, Philip J. Myers, owns and is the President of both our advisor and American Investors Group, Inc., the underwriter of this offering, and thus controls both entities. Our Chief Financial Officer and Treasurer, Scott J. Marquis, is both a Vice President of our advisor and Chief Financial Officer and Chief Operating Officer of American Investors Group, Inc. and thus in a position of control of both entities. On our behalf, our advisor regularly uses the services of personnel employed by American Investors Group, Inc., including our President, Philip J. Myers, and Vice-President Scott J. Marquis. We incur no direct cost for such services, except for the advisory fee we pay to our advisor. While our advisor has no employees, it does have two executive officers. See section “The Advisor and Our Advisory Agreement” herein.

Transactions with Our Advisor

We pay our advisor advisory fees and expenses. In addition, our advisor receives a portion of any origination fees associated with a mortgage loan made or renewed by us. The Company paid the advisor management and origination fees of approximately $138,000 for the six months ended June 30, 2017 and $324,000 for the year ended December 31, 2016. We believe that the terms of the advisory agreement are no less favorable to us had we entered into the agreement with an independent third party as advisor.

Transactions with the Underwriter

Effective as of the date of this offering, we have entered into a distribution agreement with the underwriter. Pursuant to the agreement, we will pay the underwriter a commission based on the gross principal amount of certificates sold in this offering and an underwriter’s management fee based on the principal amount and term of certificates sold in this offering. We will also pay the underwriter a non-accountable expense reimbursement of up to $60,000, assuming all of the certificates are sold. The underwriter is an affiliate of our advisor. We believe that the terms of the distribution agreement are no less favorable to us than if we had entered into the agreement with an independent third party. The following table sets forth the name and positions of certain officers and all directors of the underwriter:

Name	Position
Philip J. Myers	President, Treasurer and Director
Scott J. Marquis	Chief Financial and Operating Officer

In the course of our business, we may purchase church bonds being underwritten and sold by American Investors Group, Inc., (“American”). Although we would not pay any commissions, American will benefit from such purchases as a result of commissions paid to it by the issuer of the bonds. American also may benefit from mark-ups on bonds we buy from it and mark-downs on bonds we sell through it on the secondary market. We will purchase church bonds for investment purposes only, and only at the public offering price. Church bonds we purchase in the secondary market, if any, will be purchased at the best price available, subject to customary markups (or in the case of sales - markdowns), on terms no less favorable than those applied to other customers of American. Principals of ours and our advisor may receive a benefit in connection with such transactions due to their affiliation with the underwriter. Other than with respect to the purchase and sale of church bonds for our portfolio in the ordinary course of business, all future transactions between us and our officers, directors and affiliates will be approved, in advance, by a majority of our independent and disinterested directors.

THE ADVISOR AND OUR ADVISORY AGREEMENT

Our Advisor: Church Loan Advisors, Inc.

Subject to the supervision of the board of directors, our business is managed by our advisor, Church Loan Advisors, Inc., which provides investment advisory and administrative services. Church Loan Advisors, Inc. is a Minnesota corporation and has acted as our advisor since inception in 1994. Mr. Myers owns 100% of the Advisor. Our advisor’s offices are located at 10237 Yellow Circle Drive, Minnetonka (Minneapolis), Minnesota 55343. Our advisor renders lending and advisory services solely to us, and administers our business affairs and operations.

The following table sets forth the names and positions of the officers and directors of the advisor:

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Name	Position
Philip J. Myers	President, Treasurer and Director
Scott J. Marquis	Vice President, Secretary

See “Management” for a description of the positions and business experience of Philip J. Myers and Scott J. Marquis.

Our Advisory Agreement

We have entered into a contract with our advisor (the “Advisory Agreement”) under which our advisor furnishes advice and recommendations concerning our affairs, provides administrative services to us, and manages our day-to-day affairs. The Company’s and the advisor’s activities are governed by the Company’s Bylaws and the Advisory Agreement. Both of these documents substantially comply with the NASAA REIT Guidelines, which include substantive limitations on, among other things, conflicts of interest and related party transactions.

Other than with respect to the purchase and sale of church bonds for our portfolio in the ordinary course of business, as described below, all future transactions between us and our officers, directors and affiliates must be approved, in advance, by a majority of our independent directors. Our advisor provides us with the following services:

· serves as our mortgage loan underwriter and advisor in connection with our primary business of making loans to churches

· advises and selects church bonds for us to purchase and hold for investment

· services all mortgage loans that we make

· provides marketing and advertising and generates loan leads directly and through its affiliates

· deals with borrowers, lenders, banks, consultants, accountants, brokers, attorneys, appraisers, insurers and others

· supervises the preparation, filing and distribution of tax returns and reports to governmental agencies, prepares reports to Stockholders and acts on our behalf in connection with Stockholder relations

· reports to us on its performance of the foregoing services

· furnishes advice and recommendations with respect to other aspects of our business.

In performing its services under the Advisory Agreement, our advisor uses facilities, personnel and support services of its affiliates. Expenses, such as legal and accounting fees, director fees, stock transfer agent and registrar and paying agent fees, are our direct expenses and are not provided for by our advisor as part of its services.

The Advisory Agreement is renewable annually by us for one-year periods, subject to a determination, including a majority of our independent directors, that our advisor’s performance has been satisfactory and that the compensation paid by us to our Advisor has been reasonable. The Advisory Agreement was reviewed and renewed for a one-year period ending on April 12, 2017. We may terminate the Advisory Agreement without cause or penalty on 60 days’ written notice. Upon termination of the Advisory Agreement by either party, the advisor may require us to change our name to a name that does not contain the word “American,” “America” or the name of the advisor or any approximation or abbreviation thereof. However, we may continue to use the word “church” in our name. Our directors must determine that any successor advisor possesses sufficient qualifications to perform the advisory function for us and justify the compensation provided for in its contract with us.

Pursuant to the Advisory Agreement, our advisor is required to pay all of the expenses it incurs in providing us services including, but not limited to, personnel expenses, rental and other office expenses of officers and employees of the advisor, and all of its overhead and miscellaneous administrative expenses relating to performance of its functions under the Advisory Agreement. We are required to pay all other expenses, including the costs and expenses of reporting to various governmental agencies and our Stockholders and of conducting our operations as a mortgage lender, fees and expenses of appraisers, directors, auditors, outside legal counsel and transfer agents, and costs directly relating to the closing of loan transactions.

In the event that our total operating expenses exceed in any calendar year the greater of (a) 2% of our average invested assets or (b) 25% of our net income (before interest expense), the advisor is obligated to reimburse us, to the extent of its fees for such calendar year, for the amount by which the aggregate annual operating expenses paid or incurred by us exceed the limitation. Our independent directors may, upon a finding of unusual and non-recurring factors which they deem sufficient, determine that a higher level of expenses is justified in any given year.

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Our Bylaws provide that our independent directors are to determine, at least annually, the reasonableness of the compensation which we pay to our advisor. Factors to be considered in reviewing the advisory fee include the size of the fees of the advisor in relation to the size and composition of our assets, our profitability, the rates charged by other investment advisors performing comparable services, the success of our advisor in generating opportunities that meet our investment objectives, the amount of additional revenues realized by our advisor for other services performed, the quality and extent of service and advice furnished by our advisor, the quality of our investments in relation to investments generated by our advisor for its own account, if any, and the performance of our investments.

Pursuant to the Advisory Agreement, we pay our advisor an annual base management fee of 1.25% of average invested assets on the first $35 million of such assets, 1.00% on assets from $35 million to $50 million, and .75% on assets in excess of $50 million. Our advisor only charges a .25% management fee on the church bond portion of our portfolio. For purposes of the Advisory Agreement, the Company’s Invested Assets means outstanding church loans and bonds and does not include cash or cash equivalent temporary investments. As defined in the Advisory Agreement, we remit to the advisor up to one-half of any origination fee collected from a borrower in connection with mortgage loans made or renewed by us. For the six months ended June 30, 2017 and the year ended December 31, 2016 we paid our advisor approximately $134,000 and $315,000, respectively.

The advisory agreement requires us to indemnify our advisor and each of its directors, officers and employees against expense or liability arising out of such person’s activities in rendering services to us, provided that the conduct against which the claim is made was determined by such person, in good faith, to be in our best interest and was not the result of negligence or misconduct.

The foregoing is a summary of the material provisions of the advisory agreement. Reference is made to the advisory agreement, filed as an exhibit to the registration statement of which this prospectus is a part, for a complete statement of its provisions.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE CERTIFICATES

The discussion set forth below of the material United States federal income tax consequences relating to the acquisition, ownership and disposition of the certificates is a summary and it is not exhaustive of all possible tax considerations. This discussion does not provide a discussion of any estate, state, local, or foreign tax considerations.

Winthrop & Weinstine, P.A. has acted as our special U.S. federal income tax counsel with respect to this offering, has reviewed this summary discussion that is titled “Federal Income Tax Consequences Associated with the Certificates,” and is of the opinion that it fairly summarizes the United States federal income tax consequences that are likely to be material to U.S. persons that acquire, own, and dispose of our certificates. The opinion of Winthrop & Weinstine, P.A. has been filed as an exhibit to the registration statement of which this prospectus is a part. The opinion of Winthrop & Weinstine, P.A. is based on various assumptions, is subject to limitations, and is not binding on the Internal Revenue Service or any court.

The information in this summary is based on the Internal Revenue Code (the “Code”), current and temporary proposed Treasury regulations promulgated under the Code, the legislative history of the Code, current administrative interpretations and practices of the Internal Revenue Service (“IRS”), and court decisions, all as of the date of this prospectus. The administrative interpretation and practices of the IRS upon which this summary is based includes the practices and policies as expressed in private letter rulings, which are not binding on the IRS, except with respect to taxpayers who request and receive such rulings. No assurance can be given that future legislation, Treasury regulations, administrative interpretations and practices, and court decisions will not significantly change current law, or adversely affect the existing interpretations of current law, on which the information in this summary is based. Even if there is no change in applicable law, no assurance can be provided that the statements made in the following summary will not be challenged by the IRS or will be sustained by a court if so challenged, and we will not seek a ruling with respect to any part of the information discussed in this summary. This summary is qualified in its entirety by the applicable Code provisions, Treasury regulations, and administrative and judicial interpretations of the Code.

The discussion applies only to original purchasers of certificates at par value. The discussion is included for general information purposes only and does not deal with persons in special situations, such as banks or other financial institutions, insurance companies, regulated investment companies, dealers in securities or currencies, tax-exempt entities, persons holding certificates in a tax-deferred or tax-advantaged account, traders in securities that elect to use a mark-to-market accounting method for securities holdings, expatriates, persons holding certificates as a hedge against currency or interest-rate risks, as a position in a “straddle,” or as part of a “hedging,” “conversion,” or integrated transaction for federal income tax purposes consisting of the certificates and one or more other investments, holders who are U.S. persons for federal income tax purposes whose functional currency for federal income tax purposes is not the U.S. dollar, holders who are not U.S. persons for federal income tax purposes, trusts and estates, and pass-through entities, any equity holder of which is any of the foregoing. This discussion also assumes that the certificates are held as “capital assets” within the meaning of Section 1221 of the Code.

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YOU ARE ADVISED TO CONSULT WITH YOUR OWN TAX ADVISOR TO DETERMINE THE IMPACT OF YOUR PERSONAL TAX SITUATION ON THE ANTICIPATED TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE CERTIFICATES. THIS INCLUDES THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE CERTIFICATES AND POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

Tax Classification of the Certificates

We believe that the certificates will be classified as debt of our company for federal income tax purposes. By your acceptance of a certificate, and by virtue of any person’s acquisition of a beneficial interest in a certificate, you and or any such beneficial owner agree to treat the certificates as debt for all tax purposes.

Our characterization of the certificates as debt is not binding on the IRS, and the IRS could assert that the certificates represent an ownership interest in the equity of the company or in the mortgage collateral. The IRS’s treatment of the certificates as equity interests could adversely affect our ability to maintain our REIT status, and could result in collateral tax consequences to certificate holders, including changes in the characterization and timing of income received with respect to the certificates and could adversely affect our cash flow. The remainder of this discussion assumes that the certificates are treated as debt for federal income tax purposes.

Interest Income on the Certificates

We will pay interest on the certificates quarterly. Interest paid on the certificates will generally be taxable to you as ordinary income as the interest is paid to you if you are a cash-method taxpayer or as the interest accrues if you are an accrual-method taxpayer.

Treatment of Dispositions of Certificates

Upon the sale, exchange, retirement or other taxable disposition of a certificate, you will recognize gain or loss in an amount equal to the difference between the amount realized on the disposition (other than any amounts attributable to, and taxable as, accrued interest) and your adjusted tax basis in the certificate. Your adjusted tax basis of a certificate generally will equal your original cost for the certificate, increased by any accrued but unpaid interest you previously included in income with respect to the certificate and reduced by any principal payments you previously received with respect to the certificate. Any gain or loss will be capital gain or loss, except for gain representing accrued interest not previously included in your income. This capital gain or loss will be long-term, capital gain or loss if the certificate had been held for more than one year and otherwise short-term capital gain or loss.

Reporting and Backup Withholding

We will report annual interest income paid, and any other information that is required to be reported with respect to the certificates, to the Internal Revenue Service and to holders of record that are not excepted from the reporting requirements.

Under certain circumstances, as a holder of a certificate, you may be subject to “backup withholding.” Backup withholding may apply to you if you are a United States person and, among other circumstances, you fail to furnish your Social Security Number or other taxpayer identification number to us. Backup withholding may apply, under certain circumstances, if you are a foreign person and fail to provide us with the statement necessary to establish an exemption from federal income and withholding tax on interest on the certificates. Backup withholding is not an additional tax and may be applied against your United States federal income tax liability or refunded provided that you furnish the Internal Revenue Service with certain required information.

QUALIFICATION AS A REIT FOR FEDERAL INCOME TAX PURPOSES

The discussion of an entity’s qualification as a real estate investment trust (“REIT”) for federal income tax purposes set forth below is a summary. It does not address fully all requirements for REIT qualification. The Company’s tax counsel has opined that the Company has been organized in a manner that will permit it to satisfy the requirements under Sections 856 through 860 of the Code for qualification and taxation as a REIT for the taxable year 2015 and that the Company’s proposed method of operation, as described herein, will permit the Company to satisfy the requirements for qualification and taxation as a REIT under Sections 856 through 860 of the Code with respect to 2015 and subsequent taxable years.

WHETHER THE COMPANY QUALIFIES AS A REIT FOR FEDERAL INCOME TAX PURPOSES WILL NOT AFFECT WHETHER THE CERTIFICATES ARE CLASSIFIED AS DEBT FOR FEDERAL INCOME TAX PURPOSES OR THE SUMMARY OF THE ANTICIPATED MATERIAL FEDERAL INCOME TAX CONSEQUENCES TO U.S. PERSONS WHO HOLD THE CERTIFICATES THAT IS SET FORTH IN THE PRECEDING DISCUSSION TITLED “MATERIAL FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE CERTIFICATES.” IF THE

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COMPANY WOULD NOT CONTINUE TO QUALIFY AS A REIT FOR FEDERAL INCOME TAX PURPOSES, IT, HOWEVER, COULD AFFECT ADVERSELY THE COMPANY’S ABILITY TO MAKE DEBT SERVICE PAYMENTS TO HOLDERS OF THE CERTIFICATES.

Qualification as a Real Estate Investment Trust

General. The following is a general summary of the requirements to qualify as a REIT for federal income tax purposes. This summary is qualified in its entirety by the applicable Code provisions, rules and regulations promulgated thereunder, and administrative and judicial interpretations thereof. The requirements to qualify as a REIT may be changed, perhaps retroactively, by legislative, administrative or judicial action at any time.

Requirements for Qualification. The Code defines a REIT as a corporation, trust or association (i) which is managed by one or more trustees or directors; (ii) the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; (iii) which would be taxable, but for Sections 856 through 859 of the Code, as a domestic corporation; (iv) which is neither a financial institution nor an insurance company subject to certain provisions of the Code; (v) the beneficial ownership of which is held by 100 or more persons; (vi) during the last half of each taxable year not more than 50% of the outstanding stock of which is owned, directly or indirectly, by five or fewer individuals (which term includes certain entities); and (vii) which meets certain other tests, described below. Conditions (i) to (iv) must be met during the entire taxable year. Condition (v) must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months.

To qualify as a REIT for a taxable year, we must elect or previously have elected to be so treated, which we did, and must meet other requirements, including percentage tests relating to the sources of our gross income, the nature and diversification of our assets and the distribution of our income to our Stockholders. During our history of operations, we have operated as a REIT under the Code. Our ability to continue to qualify to operate as a REIT depends, in part, on the timing and nature of our investments. There can be no assurance that we will continue to qualify as a REIT. Qualification as a REIT is dependent on future events. No assurance can be given that our business or that the actual results of our operation for any particular taxable year will satisfy the REIT requirements.

The Effect of Failure to Qualify as a Real Estate Investment Trust

If we fail to qualify as a REIT in any taxable year and the relief provisions do not apply, then we will be subject to a tax (including any applicable minimum tax) on our taxable income computed in the usual manner for corporate taxpayers without any deduction for dividends paid. In such event, to the extent of current and accumulated earnings and profits, all distributions to Stockholders will be taxable to us at the corporate level as ordinary income, and, subject to certain limitations in the Code, corporate distributees may be eligible for the dividends received deduction. Unless entitled to relief under specific statutory provisions, we will also be prohibited from electing to be taxed as a REIT for the four taxable years following the year during which qualification is lost. To renew our REIT qualifications at the end of such a four-year period, we would be required to distribute all of our current and accumulated earnings and profits before the end of the period.

Loss of REIT status from either our disqualification as a REIT or our revocation of REIT status would not affect whether the certificates are classified as debt for federal income tax purposes, the anticipated federal income tax consequences to U.S. persons who hold the certificates, or whether we may deduct interest paid to certificate holders for United States federal income tax purposes. To generate funds with which to pay federal income taxes because of the loss of REIT status, however, could reduce our funds that are available for investment, could cause us to incur additional indebtedness, or could cause us to liquidate investments, each of which could affect adversely our ability to make debt service payments to holders of certificates.

ERISA CONSIDERATIONS

Certain employee benefit plans and individual retirement accounts and individual retirement annuities (collectively, “Plans”), are subject to various provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Internal Revenue Code. Before investing in the certificates, a Plan fiduciary should ensure that such investment is in accordance with ERISA’s fiduciary standards and that the investment will comply with the diversification, prudence, liquidity, and composition requirements of ERISA. A Plan fiduciary also should consider the prohibitions under ERISA on improper delegation of control over, or responsibility for “plan assets” and ERISA’s imposition of co-fiduciary liability on a fiduciary who participates in, or permits, by action or inaction, the occurrence of, or fails to remedy, a known breach of duty by another fiduciary with respect to “plan assets,” and a Plan fiduciary should consider the need to value the assets of the Plan annually. A Plan fiduciary also should ensure that the investment is in accordance with the governing instruments and the overall policy of the Plan. In addition, provisions of ERISA and the Code prohibit certain transactions in Plan assets that involve persons who have specified relationships with a Plan. The consequences of such prohibited transactions include excise taxes, disqualifications of IRAs and other liabilities. A Plan fiduciary should ensure that any investment in the certificates will not constitute a prohibited transaction. A Plan fiduciary also should consider the illiquid nature of an investment in our certificates and that no secondary market will exist for them.

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DESCRIPTION OF CAPITAL STOCK

General

Our authorized capital stock consists of 50,000,000 undesignated shares, of which our board of directors has established that 30,000,000 shares are Common Stock, par value of $0.01 per share. Pursuant to our articles of incorporation, our board of directors has the authority to divide the balance of the authorized capital stock into classes and series with relative rights and preferences and at such par value as the board of directors may establish from time to time. Each share of Common Stock is entitled to participate equally in dividends when and as declared by the directors and in the distribution of our assets upon liquidation. Each authorized share is entitled to one vote and will be fully paid and nonassessable upon issuance and payment therefor. Each authorized share has no preference, conversion, exchange, preemptive or cumulative voting rights. There are no cumulative voting rights in electing directors. We have 1,677,798 shares of common stock outstanding as of June 30, 2017.

Repurchase of Shares and Restrictions on Transfer

Two of the requirements for qualification for the tax benefits accorded by the real estate investment trust provisions of the Internal Revenue Code are that (i) during the last half of each taxable year not more than 50% of the outstanding capital stock may be owned directly or indirectly by five or fewer individuals and (ii) there must be at least 100 Stockholders for at least 335 out of 365 days of each taxable year or the proportionate amount for any partial taxable year.

Our articles of incorporation prohibit any person or group of persons from holding, directly or indirectly, ownership of a number of shares in excess of 9.8% of the outstanding capital stock. Shares owned by a person or group of persons in excess of such amounts are referred to in the articles of incorporation and herein as “excess shares.” For this purpose, shares shall be deemed to be owned by a person if they are constructively owned by such person under the provisions of Section 544 of the Code (as modified by Section 856(h) of the Code) or are beneficially owned by such person under the provisions of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The term “group” has the same meaning as that term has for purposes of Section 13(d)(3) of the Exchange Act. Accordingly, shares owned or deemed to be owned by a person who individually owns less than 9.8% of the outstanding capital stock may nevertheless be Excess Shares if such person is a member of a group which owns more than 9.8% of the outstanding capital stock.

Our articles of incorporation provide that in the event any person acquires excess shares, we may redeem such Excess Shares, at the discretion of the board of directors. Except as set forth below, the redemption price for excess shares is the closing price on the last business day prior to the redemption date if the shares are traded on an exchange or, if not listed on an exchange, the net asset value of the excess shares as determined in good faith by the board of directors. In no event, however, may the purchase price of the shares redeemed be greater than their net asset value as determined by the board of directors in good faith. To redeem excess shares, the board of directors must give a notice of redemption to the holder of such excess shares not less than 30 days prior to the date fixed by the board of directors for redemption. The redemption price for excess shares will be paid on the redemption date fixed by the board of directors and included in such notice. Excess shares cease to be entitled to any distribution and other benefits from and after the date fixed for redemption, except the right to payment of the redemption price for such shares.

Under our articles of incorporation, any transfer of shares that would result in our disqualification as a real estate investment trust under the Code is void to the fullest extent permitted by law. The board of directors is authorized to refuse to transfer shares to a person if, as a result of the transfer, that person would own excess shares. Upon demand by the board of directors, a Stockholder is required to provide us with an affidavit setting forth, as to that Stockholder, the information required to be reported in returns filed by Stockholders under the Treasury Regulation Section 1.857-9 and in reports filed under Sections 13(d) and 16(b) of the Exchange Act. Each proposed transferee of shares, upon demand of the board of directors, also may be required to provide us with a statement or affidavit setting forth the number of shares already owned by the transferee and any related persons. The transfer or sale of shares also are subject to compliance with applicable state “Blue Sky” laws.

Repurchase of Shares by Us

Although our shares are not redeemable, we may at our complete discretion, repurchase shares offered to us by Stockholders. We may pay whatever price our advisor deems appropriate and reasonable and is acceptable to the selling Stockholder and us. Any shares repurchased will be re-designated as “unissued,” will no longer be entitled to distribution of dividends, and will cease to have voting rights.

Transfer Agent and Registrar

The transfer agent and registrar for our capital stock is Computershare Trust Company, Inc., 350 Indiana Street, Suite 800, Golden, CO 80401, telephone: (303) 262-0600.

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DESCRIPTION OF THE CERTIFICATES

General. The Series E Certificates we are offering by this prospectus are secured debt obligations of American Church Mortgage Company. We have issued three prior series of Secured Investor Certificates: Series A, Series B, Series C and Series D. The following chart summarizes the amount of certificates of each series originally authorized to be sold, the amount actually sold and the amount outstanding as of August 31, 2017:

	Authorized Amount		Amount Sold		Amount Outstanding
Series A	$	15,000,000	$	15,000,000	—
Series B	$	23,000,000	$	14,860,000	$	12,764,000	(1)
Series C	$	20,000,000	$	7,932,000	$	6,734,000
Series D	$	10,000,000	$	8,234,000	$	8,234,000

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(1) Includes $3,500,000 in Series A certificates that were renewed and became Series B certificates.

We will issue the certificates under an indenture between us and Herring Bank, as trustee. The terms and conditions of the certificates include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939. The following is a summary of some, but not all, provisions of the certificates, the indenture and the Trust Indenture Act. For a complete understanding of the certificates, you should review the terms and conditions contained in the global certificate that we will issue to the trustee, the indenture and the Trust Indenture Act, which include definitions of certain terms used below. Copies of the form of the certificates and the indenture are available from us at no charge upon request.

The certificates are secured by our assignment to the trustee of mortgage backed promissory notes or mortgage secured bonds issued by churches and other not-for-profit religious organizations, which we own or will receive as a result of loans we make to churches and other nonprofit religious organizations and bonds we purchase for cash. The mortgages securing the promissory notes will not be assigned to the trustee nor will any bonds be re-registered to the trustee. Further, we are not required to establish or maintain a sinking fund to provide for payment of maturing certificates.

You may determine the amount (any multiple of $1,000) and term (5, 6, 7, 8, 9, 10, 11, 12, 13, 14 or 15 years) of the certificates you would like to purchase when you subscribe, subject to availability. However, we may not always offer certificates of each maturity, depending on market conditions and our capital requirements. Each certificate will mature on the anniversary of the last day of the fiscal quarter in which the certificate is purchased. We will set interest rates based on current market conditions and our need for capital. Interest rates will not be derived from any reference or published interest rate.

The interest rate will be fixed for the term of your certificate and paid quarterly. The current rates we will pay for each maturity of certificates are set forth below. The interest rate will vary based on the term to maturity of the certificate you purchase and these rates may be changed at any time. You should check for any rate supplements at the time of purchase.

Certificate Term	Interest Rate %
5 Year		4.00	%
6 Year		5.00	%
7 Year		5.00	%
8 Year		5.25	%
9 Year		5.25	%
10 Year		5.75	%
11 Year		6.00	%
12 Year		6.00	%
13 Year		6.25	%
14 Year		6.25	%
15 Year		6.50	%

Upon acceptance of your subscription to purchase certificates, the trustee, who is also acting as our servicing agent, will create an account in our book-entry registration system for you and credit the principal amount of your subscription to your account. Our trustee will send you a book-entry receipt that will indicate our acceptance of your subscription. If we reject your subscription, all funds deposited will be promptly returned to you without any interest. Investors whose subscriptions for certificates have been accepted and anyone who subsequently acquires certificates in a qualified transfer are referred to as “holders” or “registered holders” in this document and in the indenture.

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We may modify or supplement the terms of the certificates described in this prospectus from time to time in a supplement to this prospectus. Except as set forth under “Amendment, Supplement and Waiver” below, any modification or amendment will not affect then-outstanding certificates. However, investors are advised to check for prospects supplements as interest rates are subject to change.

Denomination. You may purchase certificates in principal amount of multiples of $1,000. You will determine the original principal amount of each certificate you purchase when you subscribe.

Term and Maturity. We are offering certificates with terms of five and seven to fifteen years.

You will select the term of each certificate you purchase when you subscribe, depending on availability. You may purchase multiple certificates with different terms by filling in investment amounts for more than one term.

The maturity date will be the anniversary of the last day of the fiscal quarter in which you purchase your certificate. For example, if you purchased a thirteen (13) year certificate on July 10, 2017, the certificate will mature on September 30, 2030. We may cease offering specified maturities, and re-continue their offering, at any time during the offering period. We may change the interest rate offered on any unsold certificates without prior notice.

Collateral. We will assign to the trustee to secure the certificates mortgage secured promissory notes and bonds issued by churches and other nonprofit religious organizations evidencing loans made by us or cash which have an aggregate unpaid principal balance of at least 100% of the aggregate outstanding principal amount of the certificates. Unless there is an event of default, we will not assign the mortgages securing the assigned promissory notes and bonds to the trustee.

We will be obligated to replace a promissory note or bond that we have assigned to the trustee if the church obligor prepays the promissory note or bond or if it defaults in the payment of principal or interest on the promissory note or bond and the default continues for at least 90 consecutive days. We will assign additional promissory notes and bonds or cash to the trustee as necessary to maintain the aggregate outstanding principal balance of the assigned notes at a level of at least 100% of the outstanding principal balance of the certificates sold in this offering.

We will furnish the following to the trustee in connection with our assigning mortgage-secured promissory notes to the trustee:

· An opinion of counsel to the effect that all necessary action has been taken to create and perfect a first lien and security interest in favor of the trustee in the assigned promissory notes and bonds.

· Annual opinions of counsel to the effect that all necessary action has been taken to maintain a first lien and security interest in favor of the trustee in the assigned promissory notes and bonds.

· Annual certification of our officers that all provisions of the indenture relating the deposit, release and substitution of collateral have been complied with.

Generally, neither we, nor the trustee will be required to provide reports to holders concerning the deposit, release or substitution of promissory notes and bonds securing the certificates. However, the trustee will be required to report to holders if we default in our obligations to maintain the 100% collateral coverage requirement and that default has not been cured within 90 days.

Interest Rate. The interest rate on a particular certificate will be the interest rate for the particular term of the certificate at the time of subscription or renewal. Please see the “Interest Rate” chart above or in an applicable supplement. The interest rate will remain fixed for the original or renewal term of the certificate. We will set interest rates based on current market conditions and our need for capital. Interest rates will not be derived from any reference or published interest rate. We will establish and may change the interest rates payable for unsold certificates of various terms in a supplement to this prospectus.

Computation of Interest. We will compute interest on certificates on the basis of an actual calendar year. Interest will accrue from the date of purchase, but will not be compounded. The date of purchase will be the first business day immediately following the date we receive funds. Our business days are Monday through Friday, except for legal holidays recognized by FINRA.

Interest Payment Dates. Interest will be payable quarterly and interest checks will be mailed to certificate holders on the last day of each calendar quarter (i.e., March 31, June 30, September 30 and December 31). If the last day of a quarter falls on a weekend or a holiday, we will pay interest on the next business day.

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Place and Method of Payment. We will pay principal and interest on the certificates through the trustee, who will act as our paying agent, by check mailed on each interest payment date to your address appearing in the certificate register. If the foregoing payment method is not available, principal and interest on the certificates will be payable at our principal executive office or at such other place as we may designate for payment purposes. We will not wire or electronically transmit interest payments to holders of certificates.

Servicing Agent. We have engaged Herring Bank, who is also acting as the trustee in this offering, to act as our servicing agent for the certificates. The trustee’s responsibilities as servicing agent will include serving as our registrar and transfer agent and fulfilling certain of our responsibilities to the holders.

You may contact the trustee as follows with any questions about the certificates:

Herring Bank
1608 S. Polk St.
Amarillo, TX 79102
(806) 378-6655

Book-Entry Registration and Transfer. You will not receive or be entitled to receive physical delivery of a certificate. The issuance and transfer of certificates will be accomplished exclusively through the crediting and debiting of the appropriate accounts in our book-entry registration and transfer system. However, you will receive a book-entry acknowledgement from the trustee that will show all pertinent information regarding your certificate, including the principal amount of your certificate, its interest rate and maturity, and verification of its registration. The trustee will maintain our book-entry system.

The holders of the accounts established upon the purchase or transfer of certificates will be deemed to be the owners of the certificates under the indenture. The holders of certificates must rely upon the procedures established by the trustee to exercise any rights of a holder of certificates under the indenture. The servicing agent will determine the interest payments to be made to the book entry accounts and maintain, supervise and review any records relating to book-entry beneficial interests in the certificates.

Book-entry notations in the accounts evidencing ownership of the certificates are exchangeable for actual certificates only if: (i) we, at our option, advise the trustee in writing of our election to terminate the book-entry system, or (ii) after the occurrence of an event of default under the indenture, holders of the certificates aggregating more than 50% of the aggregate outstanding amount of the certificates advise the trustee in writing that the continuation of a book-entry system is no longer in the best interests of the holders of certificates and the trustee notifies all registered holders of the occurrence of any such event and the availability of definitive certificates. Subject to the exceptions described above, the book-entry interests in these securities will not be exchangeable for fully registered certificates. The trustee will also issue fully registered certificates if required by the administrator of an Individual Retirement Account or similar tax deferred account in which a holder has acquired a certificate. The trustee may charge a $10 fee per certificate issuance.

Right to Reject Applications. We may reject any application for certificates in our sole discretion.

Renewal or Payment on Maturity. Approximately 30 days prior to maturity of your certificate, you will be notified that your certificate is about to mature and whether we will allow you to renew the certificate. If we are offering renewal of certificates, we will provide you with a schedule of interest rates then in effect, which will apply if you elect to renew your certificate, along with a form on which you may elect to renew or not to renew your certificate. You will have until 10 days prior to the maturity date to exercise one of the following options:

· You can inform us in writing on or before 10 days prior to the scheduled maturity date that you would like to renew the certificate, in which case the principal amount of your certificate will be renewed for the same term at the interest rate we are offering at the time of renewal and we will pay you accrued interest through the maturity date of your certificate. No commission will be charged for renewals.

· You can do nothing or inform us that you would like us to pay the certificate in full; in either case we will pay the principal amount and accrued interest when due.

· We reserve the right to stop offering the option to renew certificates and to refuse to renew any certificate in our complete discretion. Interest will accrue from the first day of each renewed certificate term. Each renewed certificate will continue in all its provisions, including provisions relating to payment, except that the interest rate payable during any renewed term will be the interest rate that we are then offering at the time of renewal.

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· If your certificate is not renewed for any reason, no interest will accrue after the stated date of maturity and we will pay you the principal and unpaid accrued interest on your certificate within 5 business days of the stated maturity date.

Redemption Prior to Stated Maturity. The certificates may be redeemed prior to stated maturity only as set forth below. You will have no right to require us to prepay any certificate prior to its maturity date except as indicated below.

Discretionary Redemption by Us on Thirty Days’ Notice. We have the option to redeem all or a portion of the outstanding certificates at any time, in our sole discretion. If we exercise this option, we will give affected certificate holders 30 days’ notice that we intend to redeem their outstanding certificates.

Offer to Redeem by Us upon a Change of Our Advisor. Our advisor is currently Church Loan Advisors, Inc. If we terminate our advisory agreement with our current advisor for any reason, we are required to offer to redeem all certificates outstanding as of the date of such termination. In such case, certificates will be redeemable at the option of the holders. If we terminate our advisory agreement with our current advisor, we will provide our certificate holders with notices offering to redeem all outstanding certificates within 10 days of the termination. Holders of outstanding certificates will have 30 days after the date of the notice to inform us in writing whether they will require us to redeem their certificates. The redemption price will be the principal amount of the certificate, plus interest accrued and not previously paid up to the date of redemption.

Redemption by the Holder upon Death. Certificates may be redeemed upon the death of a holder who is a natural person (including certificates held in an individual retirement account), by his or her estate giving us written notice within 45 days following his or her death. The redemption price will be the principal amount of the certificate, plus interest accrued and not previously paid up to the date of redemption. Subject to the limitations described below, we will pay the redemption price within 10 days of receiving notice of the holder’s death. If spouses are joint registered holders of a certificate, the election to redeem will apply when either registered holder dies. If the certificate is held by a person who is not a natural person such as a trust, partnership, corporation or other similar entity, the right of redemption upon death does not apply. In addition, we will not be required to redeem any certificates at the request of the holder in excess of $25,000 aggregate principal amount for all holders per calendar quarter. For purposes of the $25,000 limit, redemption requests will be honored in the order in which they are received and any redemption request not honored in a calendar quarter will be honored, to the extent possible, in the next calendar quarter. Redemptions in the next calendar quarter are also subject to the $25,000 limitation. We will not redeem certificates in connection with a holder’s death if an uncured event of default exists with respect to the outstanding certificates.

Discretionary Redemption. If you request us to redeem your certificate prior to maturity, we may do so and charge you early redemption penalties, both at our complete discretion.

Transfers. The certificates are not negotiable debt instruments and, subject to certain exceptions, will be issued only in book-entry form. The book-entry receipt issued upon our acceptance of a subscription is not a negotiable instrument, and no rights of record ownership can be transferred without our advisor’s prior written consent. Transfers of certificates will generally be prohibited. However, our advisor intends to approve transfers of certificates upon a demonstrated need for liquidity, such as upon the death or bankruptcy of a certificates holder, or to facilitate estate planning objectives. Ownership of certificates may be transferred on our register only as follows:

· The holder must deliver written notice requesting a transfer to the trustee signed by the holder(s) or such holder’s duly authorized representative on a form to be supplied by our servicing agent.

· Our advisor must provide its written consent to the proposed transfer.

· The trustee may require a signature guarantee in connection with such transfer.

Upon transfer of a certificate, the trustee will provide the new holder of the certificate with a book-entry receipt which will evidence the transfer of the account on our records. The record date of any transfer will be the last day of the quarter in which the transfer is made. The transferee will be entitled to all interest accruing in the quarter in which the transfer is made.

No Sinking Fund. We will not contribute funds to a separate account, commonly known as a sinking fund, to repay principal or interest on the certificates upon maturity or default.

Restrictive Covenants. The indenture contains certain covenants that require us to maintain certain financial standards and restrict us from certain actions as set forth below.

Maintenance of Certain Financial Standards. The indenture provides that, so long as the certificates are outstanding:

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· we will maintain a positive net worth, which includes Stockholders’ equity and subordinated debt; and

· our long-term liabilities will not exceed 300% of our Stockholders’ equity at the end of any fiscal year, or such higher amount as authorized by our bylaws from time to time.

Prohibition on Certain Actions. The indenture provides that, so long as the certificates are outstanding:

· we will not pay any dividends on our common or preferred stock if there is an uncured event of default with respect to the certificates;

· we will not allow any other lien to be created or maintained on the collateral securing the certificates; and

· we will not guarantee, endorse or otherwise become liable for any obligations of any of our control persons, or other parties controlled by or under common control with any of our control persons.

Consolidation, Merger or Sale. The indenture generally permits a consolidation or merger between us and another entity. It also permits the sale or transfer by us of all or substantially all of our property and assets. These transactions are permitted if:

· the resulting or acquiring entity, if other than us, is organized and existing under the laws of a domestic jurisdiction and assumes all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the certificates and performance of the covenants in the applicable indenture; and

· immediately after the transaction, and giving effect to the transaction, no event of default under the indenture exists.

If we consolidate or merge with or into any other entity or sell or lease all or substantially all of our assets, according to the terms and conditions of the indenture, the resulting or acquiring entity will be substituted for us in the indenture with the same effect as if it had been an original party to the indenture. As a result, such successor entity may exercise our rights and powers under the indenture, in our name and, except in the case of a lease, we will be released from all our liabilities and obligations under the indenture and under the certificates.

Events Of Default. The indenture provides that each of the following constitutes an event of default:

· any default for thirty days in the payment of interest when due on the certificates;

· any default for thirty days in payment of principal when due on the certificates;

· if we default in our obligations to maintain the 100% collateral coverage requirement and that default has not been cured within 90 days;

· our failure to observe or perform any material covenant or our breach of any material representation or warranty, but only after we have been given notice of such failure or breach and such failure or breach is not cured within 30 days after our receipt of notice;

· defaults in certain of our other financial obligations; and

· certain events of bankruptcy or insolvency with respect to us.

If any event of default occurs and is continuing, the trustee or the holders of at least a majority in principal amount of the then-outstanding certificates may declare the unpaid principal of and any accrued interest on the certificates to be due and payable immediately. In the case of an event of default arising from certain events of bankruptcy or insolvency, with respect to us, all outstanding certificates will become due and payable without further action or notice. Holders of the certificates may not enforce the indenture or the certificates except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the then-outstanding certificates may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the certificates notice of any continuing default or event of default (except a default or event of default relating to the payment of principal or interest) if the trustee determines that withholding notice is in the interest of the holders.

The holders of a majority in aggregate principal amount of the certificates then outstanding by notice to the trustee may, on behalf of the holders of all of the certificates, waive any existing default or event of default and its consequences under the indenture, except a continuing default or event of default in the payment of interest on, or the principal of, the certificates.

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Amendment, Supplement and Waiver. Except as provided in this prospectus or the indenture, the terms of the certificates then outstanding may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the certificates then outstanding, and any existing default or compliance with any provision of the indenture or the certificates may be waived with the consent of the holders of a majority in principal amount of the then outstanding certificates.

Notwithstanding the foregoing, without the consent of any holder of the certificates, we or the trustee may amend or supplement the indenture or the certificates:

· to cure any ambiguity, defect or inconsistency;

· to provide for assumption of our obligations to holders of the certificates in the case of a merger or consolidation;

· to make any change that would provide any additional rights or benefits to the holders of the certificates or that does not materially adversely affect the legal rights under the indenture of any such holder, including an increase in the aggregate dollar amount of certificates which may be outstanding under the indenture;

· to modify our policy regarding redemptions elected by a holder of certificates and our policy regarding redemptions of the certificates upon the death of any holder of the certificates, but such modifications shall not materially adversely affect any then outstanding certificates;

· to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act; or

· to maintain our status as a REIT.

The Trustee. Herring Bank has agreed to be the trustee under the indenture. The indenture contains certain limitations on the rights of the trustee, should it become one of our creditors, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any claim as security or otherwise. The trustee will be permitted to engage in other transactions with us and our affiliates.

The indenture provides that in case an event of default specified in the indenture shall occur and not be cured, the trustee will be required, in the exercise of its power, to use the degree of care of a reasonable person in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of certificates, unless the holder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.

Resignation or Removal of The Trustee. The trustee may resign at any time, or may be removed by the holders of a majority of the principal amount of then-outstanding certificates. In addition, upon the occurrence of contingencies relating generally to the insolvency of the trustee or the trustee’s ineligibility to serve as trustee under the Trust Indenture Act of 1939, as amended, we may remove the trustee or a court of competent jurisdiction may remove the trustee upon petition of a holder of certificates. However, no resignation or removal of the trustee may become effective until a successor trustee has been appointed.

No Personal Liability of Directors, Officers, Employees, Stockholders and Servicing Agent. No director, officer, employee, incorporator or Stockholder of ours or our servicing agent, will have any liability for any of our obligations under the certificates, the indenture or for any claim based on, in respect to, or by reason of, these obligations or their creation. Each holder of the certificates waives and releases these persons from any liability. The waiver and release are part of the consideration for issuance of the certificates. We have been advised that the waiver may not be effective to waive liabilities under the federal securities laws since it is the view of the Securities and Exchange Commission that such a waiver is against public policy.

Service Charges. We and the trustee may assess service charges for changing the registration of any certificate to reflect a change in name of the holder or transfers (whether by operation of law or otherwise) of a certificate.

Variations By State. We may offer different securities and vary the terms and conditions of the offer (including, but not limited to, different interest rates and maturity dates) depending upon the state where the purchaser resides.

Interest Withholding. We or the trustee will withhold the required portion of any interest paid to any investor who has not provided us with a Social Security Number, Employer Identification Number, or other satisfactory equivalent in the account application (or another document) or where the Internal Revenue Service has notified us that back-up withholding is otherwise required.

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Liquidity. THERE IS NO MARKET FOR THE CERTIFICATES. We do not believe that a public market will develop for the certificates. You may not be able to sell your certificates. You should be prepared to hold any certificates you purchase until maturity.

Reports. We have published and filed with the Securities and Exchange Commission annual reports on Form 10-K, and will continue to publish and file annual reports on Form 10-K, containing financial statements, and have published and filed quarterly reports on Form 10-Q, and will continue to publish and file quarterly reports on Form 10-Q, containing financial information for the first three quarters of each fiscal year. See “Additional Information.” We will send copies of our reports at no charge to any certificate holder who requests them in writing. They are also available for viewing on the SEC’s website www.sec.gov.

SUMMARY OF THE ORGANIZATIONAL DOCUMENTS

The following is a summary of certain provisions of our organizational documents, which consist of our Amended and Restated Articles of Incorporation (“Articles”) and the Third Amended and Restated Bylaws (“Bylaws”). This summary is qualified in its entirety by specific reference to the organizational documents filed as exhibits to the registration statement of which this prospectus is a part.

Certain Articles of Incorporation and Bylaws Provisions

Stockholders’ rights and related matters are governed by the Minnesota Business Corporation Act, our Articles and our Bylaws. Certain provisions of our Articles and Bylaws, which are summarized below, may make it more difficult to change the composition of our board and may discourage an attempt by a person or group to obtain control of us through acquisitions of shares.

Stockholder Meetings

Our Bylaws provide for annual meetings of Stockholders. We typically hold our annual meeting of Stockholders during the second quarter of each year. Special meetings of Stockholders may be called by (i) our Chief Executive Officer, (ii) a majority of the members of our board of directors or a majority of our independent directors, or (iii) Stockholders holding at least 10% of the outstanding shares of common stock entitled to vote at the meeting.

Board of Directors

Our Bylaws provide that our board establishes the number of our directors, which may not be fewer than three (3) nor more than nine (9), and a majority of which must be independent directors. Any vacancy will be filled by a majority of the remaining directors, except that a vacancy of an independent director position must follow a nomination by the remaining independent directors. The directors may leave a vacancy unfilled until the next regular meeting of the Stockholders.

Limitations on Director Actions

Without concurrence of a majority of the outstanding shares, the directors may not: (i) amend our Articles or Bylaws, except for amendments which do not adversely affect the rights, preferences and privileges of Stockholders including amendments to provisions relating to, director qualifications, fiduciary duty, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (ii) sell all or substantially all of our assets other than in the ordinary course of our business or in connection with liquidation and dissolution; (iii) cause us to merge with another entity or otherwise reorganize; or (iv) cause us to dissolve or liquidate.

A majority of the then outstanding shares may, without the necessity for concurrence by our directors, vote to: (i) amend the Bylaws; (ii) terminate the corporation; or (iii) remove the directors.

Minnesota Anti-Takeover Law

We are governed by the provisions of Sections 302A.671 and 302A.673 of the Minnesota Business Corporation Act. In general, Section 302A.671 provides that the shares of a corporation acquired in a “control share acquisition” have no voting rights unless voting rights are approved in a prescribed manner. A “control share acquisition” is an acquisition, directly or indirectly, of beneficial ownership of shares that would, when added to all other shares beneficially owned by the acquiring person, entitle the acquiring person to have voting power of 20% or more in the election of directors. In general, Section 302A.673 prohibits a public Minnesota corporation from engaging in a “business combination” with an “interested Stockholder” for a period of four years after the date of the transaction in which the person became an interested Stockholder, unless the business combination is approved in a prescribed manner. “Business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested Stockholder. An “interested Stockholder” is a person who is the beneficial owner, directly or indirectly, of 10% or more of

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the corporation’s voting stock or who is an affiliate or associate of the corporation and at any time within four years prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the corporation’s stock.

Restrictions on Roll-Ups

“Roll-up” means a transaction involving our acquisition, merger, conversion, or consolidation (either directly or indirectly) and the issuance of securities of a roll-up entity. Such term does not include: (i) a transaction involving our securities that have been for at least 12 months listed on a national securities exchange or traded through the NASDAQ National Market System; or (ii) a transaction involving the conversion to corporate, trust, or association form if, as consequence of the transaction, there will be no significant adverse change in any of the following: (a) Stockholders’ voting rights; (b) our term of existence; (c) sponsor or advisor compensation; (d) our investment objectives. “Roll-up entity” means a partnership, real estate investment trust, corporation, trust, or other entity created or surviving after the completion of a roll-up transaction.

In connection with a roll-up, an appraisal of all of our assets would be required to be obtained from a competent independent expert. The appraiser would evaluate all relevant information, indicate the value of the assets as of a date immediately prior to the announcement of the roll-up and assume an orderly liquidation of the assets over a 12-month period. Notwithstanding the foregoing, we may not participate in any proposed roll-up which would:

· result in our Stockholders having rights to meeting less frequently or which are more restrictive to Stockholders than those provided in our Bylaws;

· result in our Stockholders having voting rights that are less than those provided in our Bylaws;

· result in our Stockholders having greater liability than as provided in our Bylaws;

· result in our Stockholders having rights to receive reports that are less than those provided in our Bylaws;

· result in our Stockholders having access to records that are more limited than those provided in our Bylaws;

· include provisions which would operate to materially impede or frustrate the accumulation of shares by any purchaser of the securities of the roll-up entity (except to the minimum extent necessary to preserve the tax status of the roll-up entity);

· limit the ability of an investor to exercise the voting rights of its securities in the roll up entity on the basis of the number of the shares held by that investor;

· result in investors in the roll-up entity having rights of access to the records of the roll-up entity that are less than those provided in our Bylaws; or

· place upon us any of the costs of the transaction if the roll-up is not approved by the Stockholders.

Nothing prevents our participation in any proposed roll-up resulting in Stockholders having rights and restrictions comparable to those contained in our Bylaws, with the prior approval of a majority of our Stockholders.

Stockholders voting against a proposed roll-up have the choice of (i) accepting the securities of the roll-up entity offered in the proposed roll-up; or (ii) one of either: (a) remaining as our Stockholders and preserving their interests therein on the same terms and conditions as previously existed, or (b) receiving cash in an amount equal to the Stockholders’ pro rata share of the appraised value of our net assets. We do not intend to participate in a roll up transaction.

Limitation on Total Operating Expenses

Our Bylaws provide that, subject to the conditions described in this paragraph, our annual total operating expenses cannot exceed the greater of 2% of our average invested assets or 25% our net income, computed before interest expense. The independent directors have a fiduciary responsibility to limit our annual total operating expenses to amounts that do not exceed the foregoing limitations. The independent directors may determine that a higher level of operating expenses is justified for such period because of unusual and non-recurring expenses. Any such finding by the independent directors and the reasons in support thereof must be recorded in the minutes of the meeting of the board of directors. We will send a written disclosure to our Stockholders within 60 days after the end of any fiscal quarter for which operating expenses (for the 12 months then ended) exceed 2% of the average invested assets or 25% of net income. In the event the operating expenses exceed the limitations described above and if our directors are unable to conclude that such excess was justified then within 60 days after the end of our fiscal year, our advisor must reimburse us for the amount by which the aggregate annual total operating expenses paid or incurred by us exceed the limitation.

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Transactions with Affiliates

Our Bylaws restrict our dealings with our advisor, sponsor and any director or affiliates thereof. In approving any transaction or series of transactions with such persons or entities, a majority of our directors not otherwise interested in such transaction, including a majority of the independent directors must determine that:

(a) the transaction as contemplated is fair and reasonable to us and our Stockholders and its terms and conditions are not less favorable to us than those available from unaffiliated third parties;

(b) if the transaction involves compensation to any advisor or its affiliates for services rendered in a capacity other than contemplated by the advisory arrangements, such compensation is not greater than the customary charges for comparable services generally available from other competent unaffiliated persons and is not in excess of compensation paid to any advisor and its affiliates for any comparable services;

(c) if the transaction involves the making of loans (other than in the ordinary course of our business) or the borrowing of money, the transaction is fair, competitive, and commercially reasonable and no less favorable to us than loans between unaffiliated lenders and borrowers under the same circumstances; and

(d) if the transaction involves the investment in a joint venture, the transaction is fair and reasonable and no less favorable to us than to other joint venturers.

If the proposed transaction involves a loan to any advisor, director or any affiliate thereof, or to a wholly-owned subsidiary of ours, a written appraisal of the underlying property must be obtained from an independent expert. The appraisal must be maintained in our records for at least five years and be available for inspection and duplication by any Stockholder. Such loan is subject to all requirements of our Financing Policy.

We cannot borrow money from any advisor, director or any affiliate thereof, unless a majority of our directors (including a majority of the independent directors) not otherwise interested in the transaction approve the transaction as being fair, competitive, and commercially reasonable and no less favorable to us than loans between unaffiliated parties under the same circumstances.

We cannot make or invest in any mortgage loans subordinate to any mortgage or equity interest of our advisor, directors, sponsors or any of our affiliates.

Restrictions on Investments

The investment policies and restrictions set forth in our Bylaws have been approved by a majority of our independent directors. In addition to other investment restrictions imposed by the directors consistent with our objective to qualify as a REIT, we will observe the guidelines and prohibitions on our investments set forth in our Bylaws. These guidelines and prohibitions are discussed at the section headed “Our Business—Prohibited Investments and Activities.”

PLAN OF DISTRIBUTION

General

The underwriter is offering the certificates pursuant to the terms and conditions of a distribution agreement (a copy of which is filed as an exhibit to the Registration Statement of which this prospectus is a part). The underwriter is offering $10,000,000 principal amount of certificates on our behalf on a “best efforts” basis. “Best efforts” means that the underwriter is not obligated to purchase any certificates. This is a “no minimum” offering. No minimum principal amount of certificates must be sold, and we will receive the proceeds from the sale of certificates as they are sold. This offering will be conducted on a continuous basis pursuant to applicable rules of the Securities and Exchange Commission and will terminate upon completion of the sale of all certificates. We may terminate this offering at any time.

Compensation

We will pay to the underwriter a commission based on the principal amount of certificates sold. The amount of this commission is 2.75% for sales of new certificates sold. We will also pay the underwriter a 0.75% management fee upon the original issuance of each certificate. A fee not to exceed 1.25% may be charged for renewals and is paid to the underwriter. Because there is sharing of employees with the underwriter, the underwriting compensation described above does not include the salaries or other

67

amounts that such shared employees will receive from their employer, which amounts would be paid to those employees whether or not the offering occurred. A portion of shared employee salary may be considered as underwriting compensation. This compensation, and all compensation to be received by the underwriter and related persons, will not exceed ten percent (10%) of the total offering proceeds. Shared employees are not directly involved in the sale of certificates and do not receive transaction-based compensation.

We have agreed to pay the underwriter a non-accountable expense allowance of up to $60,000 to reimburse the underwriter for certain expenses incurred by it in connection with the offer and sale of the shares, $10,000 of which is payable upon the sale of each $1,000,000 of certificates up to $5,000,000 of certificates, and $1,000 for each additional $1,000,000 of certificates offered hereby up to the completion or termination of this offering, whichever occurs first.

Other Compensation Information. We have agreed to pay the underwriter’s legal fees, to be worth no more than $5,000 in value. We will not pay or award any commissions or other compensation to any person engaged by a potential investor for investment advice to induce such person to advise the investor to purchase certificates. This provision does not prohibit the normal sales commission payable to a registered broker-dealer or other properly licensed person for selling certificates.

Subscription Process

Our certificates will be offered to the public through the underwriter and soliciting dealers. The certificates are being sold when, and if we receive and accept account applications. We have the right to accept or reject any application. If we reject your application, your funds will be returned to you, without interest. We will not accept applications for less than $1,000 for each maturity term of certificates.

The underwriter may offer the certificates through its own registered representatives and broker-dealers who are members of the FINRA (“soliciting dealers”). The underwriter may re-allow to soliciting dealers a portion of its commissions, fees and reimbursable expenses payable to it under the distribution agreement. In no event will the compensation re-allowed by the underwriter to soliciting dealers exceed the total of compensation payable to the underwriter under the distribution agreement.

Clients of soliciting dealers who wish to purchase certificates must remit payment for the purchase of certificates directly to the underwriter payable to “American Investors Group, Inc.” and will receive a confirmation of their purchase directly from the underwriter.

A sale will be deemed to have been made on the date reflected in the written confirmation. The confirmation will be sent to each purchaser by the underwriter on the first business day following the date upon which we advise the underwriter in writing that an application has been accepted. Generally, payment for certificates should accompany the account application. You may rescind your purchase of certificates for up to five (5) business days after you have received a final prospectus.

The distribution agreement provides for reciprocal indemnification between us and the underwriter against certain liabilities in connection with this offering, including liabilities under the Securities Act of 1933.

The foregoing discussion of the material terms and provisions of the distribution agreement is qualified in its entirety by reference to the detailed terms and provisions of the distribution agreement, a copy of which has been filed as an exhibit to the Registration Statement of which this prospectus is a part.

Determination of Investor Suitability

We, the underwriter and each soliciting dealer will make reasonable efforts to determine that those persons being offered or sold the certificates are appropriate in light of the suitability standards set forth herein and are appropriate to such investor’s investment objectives and financial situation. The soliciting dealer must ascertain that you can reasonably benefit from an investment in our certificates. The following shall be relevant to such determination: (i) you are capable of understanding the fundamental aspects of our business, which capacity may be evidenced by the following: (a) employment experience; (b) educational level achieved; (c) access to advice from qualified sources, such as attorneys, accountants, tax advisors, etc.; and (d) prior experience with similar investments; (ii) you have apparent understanding of (a) the fundamental risk and possible financial hazards of this type of investment; (b) the lack of liquidity of this investment; (c) that the investment will be directed and managed by the Advisor; and (d) the tax consequences of the investment; and (iii) you have the financial capability to invest in our certificates.

By executing your account application, each soliciting dealer acknowledges its determination that the certificates are a suitable investment for you, and will be required to represent and warrant its compliance with the applicable laws requiring the determination of the suitability of the certificates as an investment for you. In addition to the foregoing, we will coordinate the processes and procedures utilized by the underwriter and soliciting dealers and, where necessary, implement additional reviews and

68

procedures deemed necessary to determine that you meet the suitability standards set forth herein. The underwriter and/or the soliciting dealers must maintain for at least six (6) years a record of the information obtained to determine that you meet the suitability standards imposed on the offer and sale of certificates and your representation that you are investing for your own account or, in lieu of such representation, information indicating that you met the suitability standards.

Suitability of the Investment

Our certificates are suitable only for investment by persons who have adequate financial means and can commit their investment for the full term of the certificates purchased. You will be required to provide us with certain financial information in your account application. You may purchase up to $5,000 of certificates if you meet one of the following standards: (i) a net worth (excluding home, home furnishings and automobiles) of at least $45,000 and a minimum gross income (without regard to investment in the certificates) of at least $45,000; or (ii) a net worth (excluding home, home furnishings and automobiles) of at least $150,000. To purchase in excess of $5,000 of certificates, you must meet one of the following standards: (i) a net worth (excluding home, home furnishings and automobiles) of at least $70,000 and a minimum gross income (without regard to investment in the certificates) of at least $70,000; or (ii) a net worth (excluding home, home furnishings and automobiles) of at least $250,000. Suitability standards may be higher in certain states. Please see Exhibit B. In the case of gifts to minors or purchases in trusts, the suitability standards must be met by the custodian or the grantor. By acceptance of the confirmation of purchase or delivery of the certificates, you will represent satisfaction of the applicable suitability standards and acknowledge receipt of this prospectus.

The account application to be signed by all purchasers of the Series E Secured Investor Certificates contains an arbitration agreement. By this agreement, each purchaser agrees that all controversies relating to the Certificates will be determined by arbitration before FINRA. However, the arbitration agreement does not preclude investors from contacting state securities commissioners with respect to compliance with state securities laws or regulations in relation to a dispute or problem with an investment or their account.

COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or controlling persons pursuant to our bylaws, or otherwise, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is therefore, unenforceable.

LEGAL MATTERS

Certain legal matters, including the legality of the certificates being offered hereby and certain federal income tax matters, are being passed upon for us by Winthrop & Weinstine, P.A., Minneapolis, Minnesota.

EXPERTS

Our balance sheets as of December 31, 2016 and 2015 and related statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2016 and 2015 included in this prospectus have been audited by Baker Tilly Virchow Krause, LLP, independent registered public accounting firm, as set forth in the report thereon appearing elsewhere herein, and are included herein in reliance upon such report given on the authority of said firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-11, including exhibits and schedules filed with the registration statement of which this prospectus is a part, under the Securities Act of 1933, as amended, with respect to the Certificates to be sold in this offering. This prospectus does not contain all of the information set forth in the registration statement and exhibits and schedules to the registration statement. For further information with respect to us and the Certificates to be sold in this offering, reference is made to the registration statement, including the exhibits and schedules to the registration statement. Copies of the registration statement, including the exhibits and schedules to the registration statement, may be examined without charge at the public reference room of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Information about the operation of the public reference room may be obtained by calling the SEC at 1-800-SEC-0330. Copies of all or a portion of the registration statement may be obtained from the public reference room of the SEC upon payment of prescribed fees. Our SEC filings, including our registration statement, are also available to you, free of charge, on the SEC’s website at www.sec.gov.

We are required to file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. Our current and future SEC filings are and will be made publicly available, free of charge, on our website at http://www.church-loans.net under the heading “Regulatory Filings”.

69

INDEX TO FINANCIAL STATEMENTS

Financial Statements

Audited Financial Statements

Report of Independent Registered Public Accounting Firm F-1

Balance Sheets as of December 31, 2016 and 2015 F-2

Statements of Operations for the fiscal years ended December 31, 2016 and 2015 F-4

Statements of Stockholders’ Equity for the fiscal years ended December 31, 2016 and 2015 F-5

Statements of Cash Flows for the fiscal years ended December 31, 2016 and 2015 F-6

Notes to Financial Statements F-8

Unaudited Interim Financial Statements

Balance Sheets as of June 30, 2017 and December 31, 2016 F-20

Statements of Operations for the six month periods ended June 30, 2017 and 2016 F-22

Statements of Operations for the three month periods ended June 30, 2017 and 2016 F-23

Statements of Cash Flows for the six month periods ended June 30, 2017 and 2016 F-24

Notes to Unaudited Condensed Financial Statements F-26

F-i

EXHIBIT A

 

A-1

 

A-2

EXHIBIT B

STATE SUITABILITY REQUIREMENTS

If you are a resident of one of the states listed below, you must be able to represent that you meet the financial suitability requirements for the state in which you live to invest in the Series E Secured Investor Certificates being offered by American Church Mortgage Company.  The investment firms that solicit purchases are required by law to ask you whether you meet these requirements to determine whether a purchase of the certificates is suitable for you.  When you sign the Subscription Agreement that is part of the Account Application you are required to represent that you meet the suitability standards contained under the caption “Who May Invest” (at page 11 of this Prospectus), and if applicable, the higher standards set forth in the table below.

IF YOU ARE A RESIDENT OF ONE OF THE STATES BELOW, YOU MUST SATISFY THE NET WORTH REQUIREMENT OR THE COMBINED NET WORTH- NET INCOME REQUIREMENT SET FORTH OPPOSITE THE STATE.  When considering the net worth standards, you cannot include the value of your home, furnishings and automobiles.

STATE	ALTERNATIVE 1 NET WORTH		ALTERNATIVE 2 NET INCOME + NET WORTH		MINIMUM INVESTMENT	MAXIMUM INVESTMENT
Arizona	$	250,000	$	70,000 net income PLUS $70,000 net worth	N/A	N/A
Iowa	$	350,000	$	100,000 net income PLUS $100,000 net worth	N/A	10% of Net Worth
Texas	$	250,000	$	70,000 net income PLUS $70,000 net worth	N/A	N/A

B-1

Prospective investors may rely only on the information contained in this prospectus.  Neither American Church Mortgage Company nor the Underwriter has authorized anyone to provide any other information.  This prospectus is not an offer to sell to — nor is it seeking an offer to buy securities from — any person in any jurisdiction in which it is illegal to make an offer or solicitation.  The information here is correct only on the date of this prospectus, regardless of the time of the delivery of this prospectus or any sale of these securities.

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	6
WHO MAY INVEST	12
USE OF PROCEEDS	13
COMPENSATION TO ADVISOR AND AFFILIATES	13
CONFLICTS OF INTEREST	14
DISTRIBUTIONS	17
CAPITALIZATION	19
SELECTED FINANCIAL DATA	20
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 2OPERATIONS	21
OUR BUSINESS2OPERATIONS	28
MANAGEMENT	49
EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS; DIRECTOR COMPENSATION	52
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	52
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	53
THE ADVISOR AND OUR ADVISORY AGREEMENT	53
MATERIAL FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE CERTIFICATES	55
QUALIFICATION AS A REIT FOR FEDERAL INCOME TAX PURPOSES	56
ERISA CONSIDERATIONS	57
DESCRIPTION OF CAPITAL STOCK	58
DESCRIPTION OF THE CERTIFICATES	59
SUMMARY OF THE ORGANIZATIONAL DOCUMENTS	65
PLAN OF DISTRIBUTION	67
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	69
LEGAL MATTERS	69
EXPERTS	69
ADDITIONAL INFORMATION	69
INDEX TO FINANCIAL STATEMENTS	F-i

Until September XX, 2018, all dealers effecting transactions in the securities offered by this prospectus, whether or not participating in the offering, may be required to deliver a prospectus. Dealers may also be required to deliver a prospectus when acting as underwriters and for their unsold allotments or subscriptions.
	American Church Mortgage Company $10,000,000 of Series E Secured Investor Certificates
		PROSPECTUS
	American Investors Group, Inc. September XX, 2017

AMERICAN CHURCH MORTGAGE COMPANY

Minnetonka, Minnesota

Financial Statements

As of and for the Years Ended December 31, 2016 and 2015

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

American Church Mortgage Company

Minnetonka, MN

We have audited the accompanying balance sheets of American Church Mortgage Company (the “company”) as of December 31, 2016 and 2015, and the related statements of operations, stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of its internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Church Mortgage Company as of December 31, 2016 and 2015 and the results of its operations and cash flows for the years then ended, in conformity with United States generally accepted accounting principles.

/s/ Baker Tilly Virchow Krause, LLP

Minneapolis, Minnesota

March 31, 2017

F-1

AMERICAN CHURCH MORTGAGE COMPANY
Balance Sheets
	As of December 31,
ASSETS	2016		2015
Current Assets
Cash and equivalents	$	3,382,994	$	4,377,110
Accounts receivable		219,352		189,609
Interest receivable		175,912		172,169
Investments		2,410		—
Current maturities of mortgage loans receivable, net of
allowance of $41,912 and $57,663 and deferred
origination fees of $22,444 and $23,406 at December
31, 2016 and 2015, respectively		725,727		1,134,157
Current maturities of bond portfolio		111,000		84,000
Prepaid expenses		1,489		19,904
Total current assets		4,618,884		5,976,949
Mortgage Loans Receivable, net of current maturities,
allowance of $1,270,071 and $1,147,170 and deferred
origination fees of $276,055 and $311,938 at December
31, 2016 and 2015, respectively		22,396,071		22,680,542
Bond Portfolio, net of current maturities		11,371,616		10,429,428
Real Estate Held for Sale		340,872		697,422
Deferred Offering Costs, net of accumulated amortization
of  $1,101,441 and $974,991 at December 31, 2016 and
2015, respectively		839,195		861,810
Total Assets	$	39,566,638	$	40,646,151
Notes to Financial Statements are an integral part of this Statement.

F-2

AMERICAN CHURCH MORTGAGE COMPANY
Balance Sheets
	As of December 31,
LIABILITIES AND STOCKHOLDERS’ EQUITY	2016			2015
Current Liabilities
Current maturities of secured investor certificates	$	2,803,000		$	3,120,000
Accounts payable		36,951			29,417
Dividends payable		100,668			125,836
Total current liabilities		2,940,619			3,275,253
Deposit on real estate held for sale		—			—
Secured Investor Certificates, Series B, net of current maturities		11,486,000			13,074,000
Secured Investor Certificates, Series C, net of current maturities		6,339,000			6,723,000
Secured Investor Certificates, Series D		7,296,000			5,329,000
Total liabilities		28,061,619			28,401,253
Stockholders’ Equity
Common stock, par value $.01 per share
authorized, 30,000,000 shares,
issued and outstanding, 1,677,798 shares at
December 31, 2016 and 2015		16,778			16,778
Additional paid-in capital		19,113,458			19,113,458
Accumulated deficit		(7,625,217	)		(6,885,338	)
Total stockholders’ equity		11,505,019			12,244,898
Total liabilities and stockholders' equity	$	39,566,638		$	40,646,151
Notes to Financial Statements are an integral part of this Statement.

F-3

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Operations
	Years Ended December 31,
	2016			2015
Interest and Other Income	$	2,698,186		$	2,936,326
Interest Expense		2,025,000			1,997,249
Net Interest Income		673,186			939,077
Provision for losses on mortgage loans receivable		155,056			188,634
Net Interest Income after Provision for Mortgage		518,130			750,443
Operating Expenses
Other than temporary impairment on bond portfolio		258,000			—
Other operating expenses		597,337			792,730
		855,337			792,730
Operating Loss		(337,207	)		(42,287	)
Other Income		—			4,053
Net Loss	$	(337,207	)	$	(38,234	)
Basic and Diluted Loss Per Share	$	(0.20	)	$	(0.02	)
Dividends Declared Per Share	$	0.24		$	0.23
Weighted Average Common Shares Outstanding -
Basic and Diluted		1,677,798			1,677,798
Notes to Financial Statements are an integral part of this Statement.

F-4

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Stockholders’ Equity
Years Ended December 31, 2016 and 2015
					Additional
	Common Stock				Paid-In		Accumulated
	Shares		Amount		Capital		Deficit
Balance, December 31, 2014		1,677,798	$	16,778	$	19,113,458	$	(6,419,265	)
Net loss		—		—		—		(38,234	)
Dividends declared		—		—		—		(427,839	)
Balance, December 31, 2015		1,677,798		16,778		19,113,458		(6,885,338	)
Net loss		—		—		—		(337,207	)
Dividends declared		—		—		—		(402,672	)
Balance, December 31, 2016		1,677,798	$	16,778	$	19,113,458	$	(7,625,217	)
Notes to Financial Statements are an integral part of this Statement.

F-5

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Cash Flows
	Years Ended December 31,
	2016			2015
Cash Flows from Operating Activities
Net loss	$	(337,207	)	$	(38,234	)
Adjustments to reconcile net loss to net cash
from operating activities:
Net loss on sales and impairment on real estate held for sale		78,473			296,727
Provision for losses on mortgage loans receivable		155,056			188,634
Other than temporary impairment on bond portfolio		258,000			—
Accretion of deferred loan origination fees		(36,845	)		(126,998	)
Amortization of deferred costs		126,450			130,548
Change in assets and liabilities
Accounts receivable		(29,743	)		55,516
Interest receivable		(3,743	)		(43,269	)
Prepaid expenses		18,415			(14,025	)
Accounts payable		7,534			43,536
Net cash provided by operating activities		236,390			492,435
Cash Flows from Investing Activities
Investment in mortgage loans		(1,076,520	)		(2,922,335	)
Collections of mortgage loans		1,897,287			4,845,882
Investments purchased		(2,410	)		—
Investment in bonds		(1,622,000	)		(1,850,053	)
Proceeds from bonds		394,812			145,228
Proceeds from real estate held for sale		32,000			—
Net cash (used for) provided by investing activities		(376,831	)		218,722
Cash Flows from Financing Activities
Proceeds from secured investor certificates		1,452,000			1,877,000
Payments on secured investor certificate maturities		(1,774,000	)		(1,377,000	)
Payments for deferred costs		(103,835	)		(131,366	)
Dividends paid		(427,840	)		(469,783	)
Net cash used for financing activities		(853,675	)		(101,149	)
Net (Decrease) Increase in Cash and Equivalents		(994,116	)		610,008
Cash and Equivalents - Beginning of Year		4,377,110			3,767,102
Cash and Equivalents - End of Year	$	3,382,994		$	4,377,110
Notes to Financial Statements are an integral part of this Statement.

F-6

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Cash Flows - Continued
	Years Ended December 31,
	2016		2015
Supplemental Cash Flow Information
Dividends payable	$	100,668	$	125,836
Loan origination fees	$	13,665	$	109,997
Interest paid	$	1,898,550	$	1,866,701
Loans transferred to real estate held for sale	$	134,173	$	473,105
Non-cash investing activity:
Real estate held for sale financed through
mortgage loans receivable	$	380,250	$	—
Notes to Financial Statements are an integral part of this Statement.

F-7

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

Concentration of Credit Risk

The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor.

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $14,841 and $2,233,533 in a money market fund account at December 31, 2016 and 2015, respectively. The Company has not experienced any losses in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $111,000 and $84,000 in bonds as current assets as of December 31, 2016

F-8

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

and 2015, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2016 and 2015, respectively.

Allowance for Mortgage Loans Receivable

The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2016, the Company reserved $1,311,983 for seventeen mortgage loans. Twelve of these loans are three or more mortgage payments in arrears of which three are declared to be in default and two are in the foreclosure process. The total principal amount of these twelve loans totals approximately $5,302,000 at December 31, 2016. At December 31, 2015, the Company reserved $1,204,833 for eighteen mortgage loans. Thirteen of these loans are three or more mortgage payments in arrears of which two are declared to be in default and three loans are in the foreclosure process. The total principal amount of these thirteen loans totals approximately $5,503,000

A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows:

	2016			2015
Balance at beginning of year	$	1,204,833		$	1,177,231
Provision for losses on mortgage loans receivable		155,056			188,634
Reclassified to real estate held for sale		(29,806	)		—
Charge-offs		(18,100	)		(161,032	)
Balance at end of year	$	1,311,983		$	1,204,833

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,853,000 and $1,779,000 at December 31, 2016 and 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $663,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2016. Approximately $581,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2015.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for

F-9

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. No interest income was recognized on non-accrual loans for the years ended December 31, 2016 and 2015.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,449,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2016 and 2015, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments.

Real Estate Held for Sale

As of December 31, 2016, the company has two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with net carrying balances totaling approximately $341,000. We have listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying the property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is approximately $341,000 as of December 31, 2016 after total impairment of approximately $277,000.

Foreclosure was completed in 2004 on a church located in Battle Creek, Michigan. The church congregation disbanded and the church property is currently unoccupied. The Company owns and took possession of the church and has listed the property for sale through a local realtor.

A deed in lieu of foreclosure was received in 2008 from a church located in Pine Bluff, Arkansas. The Company owns and took possession of the church while the church attempts to obtain financing from

F-10

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

another lender. If alternative financing cannot be obtained, the Company will list the church for sale with a local realtor. The church is paying monthly rent until the property is refinanced or sold.

Foreclosure was completed in 2016 on a church located in Detroit, Michigan. The Company took possession of the property in March 2016 and listed it for sale through a local realtor.

Carrying Value of Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life.

Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals.

Revenue Recognition

Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.

Deferred Financing Costs

The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method.

Income (loss) Per Common Share

No adjustments were made to income (loss) for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

F-11

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

Income Taxes

The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its Stockholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code.

The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure.

Subsequent Events

The Company has evaluated events and transaction through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2016 financial statements.

2. FAIR VALUE MEASUREMENT

The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data.

Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate other than temporary impairment for losses on our Agape bonds (Note 3), which totaled $458,000 and $200,000 for the years ended December 31, 2016 and 2015, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis:

				Fair Value Measurement
December 31, 2016		Fair Value		Level 3
Bond portfolio	$	11,482,616	$	11,482,616

F-12

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

				Fair Value Measurement
December 31, 2015		Fair Value		Level 3
Bond portfolio	$	10,513,428	$	10,513,428

We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows:

	Bond Portfolio
Balance at December 31, 2015	$10,513,428
Purchases	1,622,000
Proceeds	(394,812)
Other than temporary investment	(258,000)
Balance at December 31, 2016	$11,482,616

Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $19,173 and $193,104 for the years ended December 31, 2016 and 2015, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis:

	December 31, 2016
	Level 1		Level 2		Level 3		Fair Value at December 31, 2016
Impaired Loans	$	—	$	—	$	1,189,873	$	1,189,873
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,530,745	$	1,530,745

	December 31, 2015
	Level 1		Level 2		Level 3		Fair Value at December 31, 2015
Impaired Loans	$	—	$	—	$	1,197,302	$	1,197,302

F-13

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

Real estate held for resale		—		—		697,422		697,422
	$	—	$	—	$	1,894,724	$	1,894,724

The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows:

	Impaired Loans	Real Estate Held for Sale
Balance at December 31, 2015	$1,197,302	$697,422
Additions/Acquisitions	221,683	134,173
Dispositions/Proceeds	(134,173)	(471,550)
Impairment	(111,362)	(  19,173)
Balance at December 31, 2016	$1,173,450	$340,872

3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO

At December 31, 2016, the Company had first mortgage loans receivable totaling $24,732,280. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.25% at December 31, 2016. The Company had first mortgage loans receivable totaling $25,354,876 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.35% at December 31, 2015.

The Company has a portfolio of secured church bonds at December 31, 2016 and December 31, 2015, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 2.75% to 9.75%. The aggregate par value of secured church bonds equaled approximately $11,940,616 at December 31, 2016 with a weighted average interest rate of 6.77% and approximately $10,713,428 at December 31, 2015 with a weighted average interest rate of 6.92%. These bonds are due at various maturity dates through May 2046. The Company has recorded an aggregate other than temporary impairment of $458,000 and $200,000 at December 31, 2016 and 2015, respectively, for the First Mortgage Bonds issued by Agape Assembly Baptist Church. This bond series in the aggregate constitute approximately 8.50% and 10.00% of the bond portfolio at December 31, 2016 and 2015, respectively. The Company had maturities and redemptions of bonds of approximately $395,000 and $145,000 in 2016 and 2015, respectively.

The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of December 31, 2016, is as follows:

	Mortgage Loans	Bond Portfolio
2017	$    790,083	$    111,000
2018	3,283,240	139,000
2019	1,326,144	144,000
2020	1,389,493	156,000

F-14

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

2021	814,392	221,000
Thereafter	17,128,928	11,169,616
	24,732,280	11,940,616
Less loan loss and other than temporary impairment on bonds allowance	(1,311,983)	(458,000)
Less deferred origination income	(298,499)	___-____
Totals	$23,121,798	$11,482,616

The Company currently owns $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. Agape is currently performing under a loan modification agreement. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate other than temporary impairment of $458,000 and $200,000 for the First and Second Mortgage Bonds at December 31, 2016 and 2015, respectively, which effectively reduces the bonds to the fair value amount management believes will be recovered.

4. SECURED INVESTOR CERTIFICATES

Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.47% and 6.44% at December 31, 2016 and 2015, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $831,000 and $958,000 during 2016 and 2015, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures.

The estimated maturity schedule for the secured investor certificates at December 31, 2016 is as follows:

2017	$  2,803,000
2018	4,116,000
2019	2,333,000
2020	4,058,000

F-15

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

2021	1,928,000
Thereafter	12,686,000
Totals	$27,924,000

In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series D secured investor certificates. The offering was declared effective by the SEC on August 12, 2014. The offering was renewed with an effective date of September 23, 2016. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At December 31, 2016, approximately 7,296 Series D certificates had been issued and were outstanding for $7,296,000.

5. TRANSACTIONS WITH AFFILIATES

The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. For its services, the Advisor is entitled to receive a management fee equal to 1.25% annually of the Company's Average Invested Assets, plus one-half of any origination fee charged to borrowers on mortgage loans made by the Company. A majority of the independent board members approve the Advisory Agreement on an annual basis. The Company paid the Advisor management and origination fees of approximately $324,000 and $393,000 during the years ended December 31, 2016 and 2015, respectively.

6. INCOME TAXES

As discussed in Note 1, a REIT is subject to taxation to the extent that taxable income exceeds dividend distributions to Stockholders. In order to maintain status as a REIT, the Company is required to distribute at least 90% of its taxable income. In 2016, the Company had pretax loss of $(337,207) and distributions to Stockholders in the form of dividends during the tax year of $402,672. The tax benefit based on statutory rates to the Company, pre-dividends would have been $(114,650) in 2016. In 2015, the Company had pretax loss of $(38,234) and distributions to Stockholders in the form of dividends during the tax year of $469,783. The tax based on statutory rates to the Company, pre-dividends, would have been $(13,000) in 2015. The Company paid out 100% of taxable income in dividends in 2016 and 2015.

The following reconciles the income tax provision with the expected provision obtained by applying statutory rates to pretax income:

	2016			2015
Tax based on statutory rates	$	(114,650	)	$	(13,000	)
Tax effect on realized losses on properties		(361,276	)		—

F-16

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

Benefit of REIT distributions		475,926		13,000
Total tax provision	$	—	$	—

The components of deferred income tax assets are as follows:

	2016			2015
Loan origination fees	$	101,490		$	114,017
Loan and bond loss provisions		446,074			477,643
Real-estate impairment		94,254			271,984
Valuation allowance		(641,818	)		(863,644	)
Deferred income tax asset, net	$	—		$	—

The change in the valuation allowance was approximately $(222,000) and $(64,000) for 2016 and 2015, respectively.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument.

The fair value estimates presented herein are based on relevant information available to management as of December 31, 2016 and 2015, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company.

The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows:

	December 31, 2016		December 31, 2015
	Carrying	Fair	Carrying	Fair
	Amount	Value	Amount	Value
Cash and equivalents	$   3,382,994	$   3,382,994	$   4,377,110	$   4,377,110
Accounts receivable	219,352	219,352	189,609	189,609
Interest receivable	175,912	175,912	172,169	172,169
Mortgage loans receivable	24,732,280	25,646,901	25,354,876	29,054,399
Bond portfolio	11,940,616	11,940,616	10,713,428	10,713,428
Secured investor certificates	27,924,000	35,415,944	28,246,000	36,995,152

F-17

AMERICAN CHURCH MORTGAGE COMPANY

Notes to Financial Statements

December 31, 2016 and 2015

The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and equivalents

Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value.

Accounts receivable

The carrying amount of accounts receivable approximates fair value.

Interest receivable

The carrying amount of interest receivable approximates fair value.

Mortgage loans receivable

The fair value of the mortgage loans receivable is currently more than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality. The credit markets in which the Company conducts business have experienced an increase in interest rates resulting in the fair value of the mortgage loans falling during the fiscal year ended December 31, 2016.

Bond portfolio

We determine the fair value of the bond portfolio shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

Secured investor certificates

The fair value of the secured investor certificates is currently greater than the carrying value due to higher interest rates than current market rates.

F-18

AMERICAN CHURCH MORTGAGE COMPANY

Minnetonka, Minnesota

Financial Statements

June 30, 2017

F-19

AMERICAN CHURCH MORTGAGE COMPANY
Balance Sheets
ASSETS	June 30, 2017	December 31, 2016
	(unaudited)
Current Assets
Cash and equivalents	$               963,383	$            3,382,994
Accounts receivable	237,509	219,352
Interest receivable	178,477	175,912
Investments	2,410	2,410
Current maturities of mortgage loans receivable, net of
allowance of $101,393 and $41,912 and deferred
origination fees of $41,611 and $22,444 at June 30,
2017 and December 31, 2016, respectively	1,725,407	725,727
Current maturities of bond portfolio	131,000	111,000
Prepaid expenses	11,109	1,489
Total current assets	3,249,295	4,618,884
Mortgage Loans Receivable, net of current maturities,
allowance of $1,262,389 and $1,270,071 and deferred
origination fees of $278,338 and $276,055 at June
30, 2017 and December 31, 2016, respectively	21,721,841	22,396,071
Bond Portfolio, net of current maturities	12,915,616	11,371,616
Real Estate Held for Sale	225,872	340,872
Deferred Offering Costs, net of accumulated amortization
of  $1,161,088 and $1,101,441 at June 30, 2017 and
December 31, 2016, respectively	819,087	839,195
Total Assets	$          38,931,711	$          39,566,638
Notes to Financial Statements are an integral part of this Statement.

F-20

AMERICAN CHURCH MORTGAGE COMPANY
Balance Sheets
LIABILITIES AND STOCKHOLDERS’ EQUITY	June 30, 2017	December 31, 2016
	(unaudited)
Current Liabilities
Current maturities of secured investor certificates	$            1,461,000	$            2,803,000
Accounts payable	49,204	36,951
Dividends payable	117,446	100,668
Total current liabilities	1,627,650	2,940,619
Secured Investor Certificates, Series B, net of current maturities	11,800,000	11,486,000
Secured Investor Certificates, Series C, net of current maturities	6,237,000	6,339,000
Secured Investor Certificates, Series D	7,965,000	7,296,000
Total liabilities	27,629,650	28,061,619
Stockholders’ Equity
Common stock, par value $.01 per share
authorized, 30,000,000 shares, issued and outstanding, 1,677,798 at June 30, 2017 and December 31, 2016	16,778	16,778
Additional paid-in capital	19,113,458	19,113,458
Accumulated deficit	(7,828,175)	(7,625,217)
Total stockholders’ equity	11,302,061	11,505,019
Total liabilities and stockholders' equity	$          38,931,711	$          39,566,638
Notes to Financial Statements are an integral part of this Statement.

F-21

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Operations
	For the Six Months Ended
	June 30, 2017	June 30, 2016
	(Unaudited)	(Unaudited)
Interest and Other Income	$             1,382,792	$             1,338,230
Interest Expense	955,754	1,005,657
Net Interest Income	427,038	332,573
Provision for losses on mortgage loans receivable	51,799	144,476
Net Interest Income after Provision for Mortgage Losses	375,239	188,097
Other than temporary impairment on bond portfolio	-	120,000
Operating Expenses	343,305	342,236
Operating Income (Loss)	31,934	(274,139)
Other Income	-	-
Net Income (Loss)	$                  31,934	$              (274,139)
Basic and Diluted Income (Loss) Per Share	$                      0.02	$                    (0.16)
Dividends Declared Per Share	$                      0.07	$                      0.06
Weighted Average Common Shares Outstanding -
Basic and Diluted	1,677,798	1,677,798
Notes to Unaudited Financial Statements are an integral part of this Statement.

F-22

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Operations
	For the Three Months Ended
	June 30, 2017	June 30, 2016
	(Unaudited)	(Unaudited)
Interest and Other Income	$                700,067	$                661,666
Interest Expense	474,622	506,338
Net Interest Income	225,445	155,328
Provision for losses on mortgage loans receivable	28,425	92,377
Net Interest Income after Provision for Mortgage Losses	197,020	62,951
Other than temporary impairment on bond portfolio	-	60,000
Operating Expenses	143,632	177,310
Operating Income (Loss)	53,388	(174,359)
Other Income	-	-
Net Income (Loss)	$                  53,388	$              (174,359)
Basic and Diluted Income (Loss) Per Share	$                      0.03	$                    (0.10)
Dividends Declared Per Share	$                      0.07	$                      0.06
Weighted Average Common Shares Outstanding -
Basic and Diluted	1,677,798	1,677,798
Notes to Unaudited Financial Statements are an integral part of this Statement.

F-23

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Cash Flows
	For the Six Months Ended
	June 30, 2017	June 30, 2016
	(Unaudited)	(Unaudited)
Cash Flows from Operating Activities
Net income (loss)	$                  31,934	$              (274,139)
Adjustments to reconcile net income (loss) to net cash
from operating activities:
Net gain (loss) on sales and impairment on real estate held for sale	66,971	(62,043)
Provision for losses on mortgage loans receivable	51,799	144,476
Other than temporary impairment on bond portfolio	-	120,000
Accretion of deferred loan origination fees	21,450	6,000
Amortization of deferred costs	59,647	64,082
Change in assets and liabilities
Accounts receivable	(18,157)	(16,858)
Interest receivable	(2,565)	(2,411)
Prepaid expenses	(9,620)	10,772
Accounts payable	(15,276)	38,156
Management fee payable	27,529	-
Net cash provided by operating activities	213,712	28,035
Cash Flows from Investing Activities
Investment in mortgage loans	(3,088,230)	(690,497)
Collections of mortgage loans	2,689,530	1,035,652
Proceeds from sale of real estate held for sale	48,029	-
Investment in bonds	(1,621,000)	(930,000)
Proceeds from bonds	57,000	44,000
Net cash (used for) investing activities	(1,914,671)	(540,845)
Cash Flows from Financing Activities
Proceeds from secured investor certificates	661,000	996,000
Payments on secured investor certificate maturities	(1,122,000)	(151,000)
Payments for deferred costs	(39,538)	(60,522)
Dividends paid	(218,114)	(226,504)
Net cash (used for) provided by financing activities	(718,652)	557,974
Net (Decrease) Increase in Cash and Equivalents	(2,419,611)	45,164
Cash and Equivalents - Beginning of Period	3,382,994	4,377,110
Cash and Equivalents - End of Period	$                963,383	$             4,422,274
Notes to Unaudited Financial Statements are an integral part of this Statement.

F-24

AMERICAN CHURCH MORTGAGE COMPANY
Statements of Cash Flows - Continued
	For the Six Months Ended
	June 30, 2017	June 30, 2016
	(Unaudited)	(Unaudited)
Supplemental Cash Flow Information
Dividends payable	$                117,446	$                    100,668
Loan origination fees	$                  31,750	$                               -
Interest paid	$                896,108	$                    942,575
Non-cash investing activity:
Real estate held for sale financed through
mortgage loans receivable	$                            -	$                    340,872
Notes to Unaudited Financial Statements are an integral part of this Statement.

F-25

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with the instructions for interim statements and, therefore, do not include all information and disclosures necessary for fair presentation of results of operations, financial position, and changes in cash flow in conformity with generally accepted accounting principles. However, in the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for fair presentation of financial position, results of operations, and cash flows for the period presented.

The unaudited financial statements of the Company should be read in conjunction with the December 31, 2016 audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the year ended December 31, 2016. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

Nature of Business

American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

Concentration of Credit Risk

The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor.

F-26

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $629 and $14,841 in money market fund accounts at June 30, 2017 and December 31, 2016, respectively. The Company has not experienced any losses in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320. The Company classifies the bond portfolio as “available-for-sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available-for-sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $131,000 and $111,000 in bonds as current assets as of June 30, 2017 and December 31, 2016, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, respectively.

Allowance for Mortgage Loans Receivable

The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans. The Company’s loan loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of a loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2017, the Company provided $1,363,782 for seventeen mortgage loans, of which seven totaling approximately $3,457,000 are three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 are declared to be in default and two loans totaling approximately $633,000 are in the foreclosure process. At December 31, 2016, the Company provided $1,311,983 for seventeen mortgage loans, of which seven totaling approximately $3,449,000 were three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 were declared to be in default and two loans totaling approximately $627,000 were in the foreclosure process.

F-27

A summary of transactions in the allowance for credit losses for the three months ended June 30, 2017 is as follows:

Balance at December 31, 2016	$  1,311,983
Provision for additional losses	51,799
Balance at June 30, 2017	$  1,363,782

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,858,000 and $1,853,000 at June 30, 2017 and December 31, 2016, respectively. Which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $688,000 and $663,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at June 30, 2017 and December 31, 2016, respectively.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,457,000 and $3,449,000 exceeded 90 days past due but continued to accrue interest at June 30, 2017 and December 31, 2016, respectively. The Company believes that the loans are well secured, not deemed to be in default and the Company is actively pursuing collection of past due payments.

F-28

Real Estate Held for Sale

As of June 30, 2017, the Company had one property acquired via deed in lieu of foreclosure, with outstanding loan balances totaling $225,872. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is $225,872 as of June 30, 2017. There was no additional impairment for the six month period ended June 30, 2017.

The Company sold one property and disposed of a second property during the six month period ended June 30, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. The Company realized an additional loss of approximately $67,000 on property that was sold as of June 30, 2017. The Company sold two properties during the six month period ended June 31, 2016. The two properties were sold for approximately $380,000. The Company provided seller financing to the borrowers. The Company realized an additional loss of approximately $52,000 on both properties as of June 30, 2016.

Carrying Value of Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life.

Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An allowance for losses is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals.

Revenue Recognition

Interest income on mortgage loans receivable and the bond portfolio is recognized as earned. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.

F-29

Deferred Financing Costs

The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method.

Income (Loss) Per Common Share

No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

2. FAIR VALUE MEASUREMENTS

The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data.

Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our Balance Sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate allowance for losses on our Agape bonds (see Note 3), which totaled $458,000 for both periods ended June 30, 2017 and December 31, 2016.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis:

		Fair Value Measurement
June 30, 2017	Fair Value	Level 3
Bond portfolio	$13,046,616	$13,046,616

		Fair Value Measurement
December 31, 2016	Fair Value	Level 3
Bond portfolio	$11,482,616	$11,482,616

We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds, and uses

F-30

observable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows:

	Bond Portfolio
Balance at December 31, 2016	$11,482,616
Purchases	1,621,000
Proceeds	(57,000)
Balance at June 30, 2017	$13,046,616

Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $0 and $19,173 for the six month periods ended June 30, 2017 and December 31, 2016, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis:

	June 30, 2017
	Level 1		Level 2		Level 3		Fair Value at March 31, 2017
Impaired Loans	$	—	$	—	$	1,172,294	$	1,172,294
Real estate held for resale		—		—		225,872		225,872
	$	—	$	—	$	1,398,166	$	1,398,166

	December 31, 2016
	Level 1		Level 2		Level 3		Fair Value at December 31, 2016
Impaired Loans	$	—	$	—	$	1,189,873	$	1,189,873
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,530,745	$	1,530,745

F-31

The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows:

		Impaired Loans			Real Estate Held for Sale
Balance at December 31, 2016	$	1,189,873		$	340,872
Additions		7,036			—
Dispositions		—			(115,000	)
Provision for other than temporary losses		(24,615	)		—
Balance at June 30, 2017	$	1,172,294		$	225,872

3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO

At June 30, 2017, the Company had mortgage loans receivable totaling $25,130,979. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.20% at June 30, 2017. The Company had mortgage loans receivable totaling $24,732,280 that bore interest ranging from 0% to 10.25% with a weighted average of approximately 8.25% at December 31, 2016.

The Company has a portfolio of secured church bonds at June 30, 2017 and December 31, 2016, which are carried at fair value. The bonds pay quarterly interest ranging from 2.75% to 9.75%. The aggregate value of secured church bonds equaled approximately $13,505,000 at June 30, 2017 with a weighted average interest rate of 6.84% and approximately $11,941,000 at December 31, 2016 with a weighted average interest rate of 6.77%. These bonds are due at various maturity dates through May 15, 2046.

The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of June 30, 2017, is as follows:

	Mortgage Loans	Bond Portfolio
July 1, 2017 through June 30, 2018	$     1,868,411	$  131,000
July 1, 2018 through December 31, 2018	2,742,724	83,000
2019	1,301,152	155,000
2020	1,362,089	168,000
2021	784,343	236,000
Thereafter	17,072,260	12,731,616
	25,130,979	13,504,616
Less loan loss and bond other than temporary impairment	(1,363,782)	(458,000)
Less deferred origination income	(319,949)	______-__
Totals	$23,447,248	$ 13,046,616

F-32

The Company currently owns $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate other than temporary impairment of $458,000 for the First and Second Mortgage Bonds at June 31, 2017 and December 31, 2016, which effectively reduces the bonds to the fair value amount management believes will be recovered. The Church has subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the six month period ended June 30, 2017. However, the trustee made a distribution to bondholders during the quarter of $18.75 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826.

4. SECURED INVESTOR CERTIFICATES

Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.45% and 6.47% at March 31, 2017 and December 31, 2016, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $141,000 and $174,000 for the three months ended June 30, 2017 and 2016, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures.

The estimated maturity schedule for the secured investor certificates at June 30, 2017 is as follows:

July 1, 2017 through June 30, 2018	$    1,461,000
July 1, 2018 through December 31, 2018	3,539,000
2019	2,333,000
2020	4,062,000
2021	1,928,000
Thereafter	14,140,000
Totals	$27,463,000

In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series D secured investor certificates. The offering was

F-33

declared effective by the SEC on August 12, 2014. The offering was renewed with an effective date of September 23, 2016. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At June 30, 2017, approximately 7,965 Series D certificates had been issued and were outstanding for $7,965,000. The offering will be terminated in September 2017.

5. TRANSACTIONS WITH AFFILIATES

The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. A majority of the independent board members approve the advisory agreement on an annual basis. The Company paid the Advisor management fees of approximately $81,000 and $80,000 during the three months ended June, 2017 and 2016, respectively and management fees of approximately $162,000 and $160,000 for the six months ended June 30, 2017 and 2016, respectively.

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument.

The fair value estimates presented herein are based on relevant information available to management as of June 30, 2017 and December 31, 2016, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company.

The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows:

	June 30, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and equivalents	$	963,383	$	963,383	$	3,382,994	$	3,382,994
Accounts receivable		237,509		237,509		219,352		219,352
Interest receivable		178,477		178,477		175,912		175,912
Mortgage loans receivable		23,227,248		27,494,751		24,732,280		25,646,901

F-34

Bond portfolio	13,046,616	13,046,616	11,940,616	11,940,616
Secured investor certificates	27,463,000	33,746,095	27,924,000	35,415,944

The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and equivalents

Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value.

Accounts receivable

The carrying amount of accounts receivable approximates fair value.

Interest receivable

The carrying amount of interest receivable approximates fair value.

Mortgage loans receivable

The fair value of the mortgage loans receivable is currently greater than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality.

Bond portfolio

We determine the fair value of the bond portfolio shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the Company’s bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

Secured investor certificates

The fair value of the secured investor certificates is currently greater than the carrying value due to higher interest rates than current market rates.

F-35

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 31. Other Expenses of Issuance and Distribution.

Item	Estimated Cost
SEC Registration Fee	$	1,159
FINRA Filing Fee	$	2,500
Blue Sky Qualification Fees and Expenses*	$	10,000
Underwriter’s Expense Allowance**	$	60,000
Printing and Engraving*	$	2,000
Legal Fees and Expenses*	$	55,000
Accounting Fees and Expenses*	$	5,000
Total	$	135,159

                           *       Estimated

**       Assumes sale of all securities offered

Item 32. Sales to Special Parties.

None.

Item 33. Recent Sales of Unregistered Securities.

None.

Item 34. Indemnification of Directors and Officers.

Our Articles require us to indemnify and pay or reimburse reasonable expenses to any individual who is our present or former director, advisor or affiliate, provided that: (i) the director, advisor or affiliate seeking indemnification has determined, in good faith, that the course of conduct which caused the loss or liability was in our best interest; (ii) the director, advisor or affiliate seeking indemnification was acting on our behalf or performing services on our behalf; (iii) such liability or loss was not the result of negligence or misconduct on the part of the indemnified party, except that in the event the indemnified party is or was an independent director, such liability or loss shall not have been the result of gross negligence or willful misconduct; and (iv) such indemnification or agreement to be held harmless is recoverable only out of our assets and not from our Stockholders directly.

We may advance amounts to persons entitled to indemnification for legal and other expenses and costs incurred as a result of legal action instituted against or involving such person if: (i) the legal action relates to the performance of duties or services by the indemnified party for or on our behalf; (ii) the legal action is initiated by a third party who is not a Stockholder, or the legal action is initiated by a Stockholder acting in his or her capacity as such and a court specifically approves such advancement; and (iii) the indemnified party receiving such advances undertakes, in writing, to repay the advanced funds, with interest at the rate we determined, in cases in which such party would not be entitled to indemnification.

Notwithstanding the foregoing, we may not indemnify our directors, advisor, or affiliates and any persons acting as a broker-dealer for any losses, liabilities or expenses arising from or out of an Subject to the limitations described above, we have the power to purchase and maintain insurance on behalf of an indemnified party. We may procure insurance covering our liability for indemnification. The indemnification permitted by our Articles is more restrictive than permitted under the Minnesota Business Corporation Act.

Item 35. Treatment of Proceeds From Stock Being Registered.

None.

Item 36. Financial Statements and Exhibits.

(a) Financial Statements:

Audited Financial Statements

Reports of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2016 and 2015

Statements of Operations for the fiscal years ended December 31, 2016 and 2015

Statements of Stockholders’ Equity for the fiscal years ended December 31, 2016 and 2015

Statements of Cash Flows for the fiscal years ended December 31, 2016 and 2015

Notes to Financial Statements

Unaudited Internal Financial Statements

Balance Sheets as of June 30, 2017 and December 31, 2016 (audited)

Statements of Operations for the six months ended June 30, 2017 and 2016

Statements of Operations for the three months ended June 30, 2017 and 2016

Statements of Cash Flows for the six months ended June 30, 2017 and 2016

Notes to Financial Statements

(b) Exhibits:

See attached exhibit index.

Item 37. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

a. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.

b. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

c. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

a. If the registrant is relying on Rule 430B:

i. Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

ii. Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

b. If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

c. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

d. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

e. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

f. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

g. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. If a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(6) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(7) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(8) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-11 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Minnetonka, state of Minnesota, on September 20, 2017.

AMERICAN CHURCH MORTGAGE COMPANY

By /s/ Philip J. Myers

Philip J. Myers, President and Chief Executive Officer

By /s/ Scott J. Marquis

Scott J. Marquis, Chief Financial Officer and Treasurer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

/s/ Philip J. Myers	Director, President and Secretary. (Principal Executive Officer)	September 20, 2017
Philip J. Myers
/s/ Scott J. Marquis	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	September 20, 2017
Scott J. Marquis
/s/ Kirbyjon H. Caldwell*	Director	September 20, 2017
Kirbyjon H. Caldwell
/s/ Dennis J. Doyle*	Director	September 20, 2017
Dennis J. Doyle
/s/ Michael G. Holmquist*	Director	September 20, 2017
Michael G. Holmquist
*By Philip J. Myers and Scott J. Marquis, Attorneys-in-Fact

INDEX TO EXHIBITS

Exhibit No.	Title
1.1	Form of Distribution Agreement by and between the Company and American Investors Group, Inc.	1
1.2	Form of Soliciting Dealers Agreement	1
3.1	Amended and Restated Articles of Incorporation	3
3.2	Third Amended and Restated Bylaws	4
4.1	Form of Trust Indenture between the Company and Herring Bank	1
5	Form of Opinion Letter of Winthrop & Weinstine, P.A. as to the legality of the securities	1
8	Form of Opinion Letter of Winthrop & Weinstine, P.A. as to certain tax matters relating to the securities	1
10.1	Amended and Restated REIT Advisory Agreement by and between the Company and Church Loan Advisory, Inc. dated January 22, 2004	5
10.5	Form of Security Agreement by and between the Company and Herring Bank	1
21	Subsidiaries of the Registrant	6
23.1	Consent of Counsel (included in Exhibit 5 and 8)	1
23.2	Consent of Independent Registered Public Accounting Firm Baker Tilly Virchow Krause, LLP	1
25	Statement of Eligibility of Trustee	1, 7
101	The following financial information from our Quarterly Report on Form 10-Q for the second quarter of fiscal year 2017 filed with the Securities and Exchange Commission on August 14, 2017, is formatted in eXtensible Business Reporting Language (XBRL):  (i) the Consolidated Balance Sheets at June 30, 2017 and December 31, 2016; (ii) Consolidated Statements of Operations for both the six months and three months ended June 30, 2017 and 2016; (iii) the Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016; and (iv) the Notes to Financial Statements (Unaudited).	1
	The following financial information from our Annual Report on Form 10-K/A for the fiscal year 2016 (as amended) filed with the Securities and Exchange Commission on May 10, 2017, is formatted in eXtensible Business Reporting Language (XBRL):  (i) the Consolidated Balance Sheets at December 31, 2016 and December 31, 2015; (ii) Consolidated Statements of Operations for the years ended December 31, 2016 and 2015; (iii) the Statement of Stockholder’s Equity for the years ended December 31, 2016 and 2015 (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015; and (v) the Notes to Financial Statements.	1

_______________

(1) Filed herewith.

(2) To be filed by Amendment.

(3)       Incorporated herein by reference to the Company’s Registration Statement on Form 8-A filed April 30, 1999

(Commission File No. 000-25919).

(4) Incorporated herein by reference to the Company’s Current Report on Form 8-K filed July 3, 2007.

(5) Incorporated herein by reference to the Company’s Current Report on Form 8-K filed August 1, 2007.

(6) Incorporated herein by reference to the Company’s Prospectus filed April 1, 2009.

(7) Articles of Incorporation and By-Laws of the Trustee incorporated herein by reference to Exhibit 25 to the Company’s Registration Statement, SEC File #333-197326 filed July 9, 2014.

EX-1.1

EXHIBIT 1.1

DISTRIBUTION AGREEMENT

$10,000,000 SERIES E SECURED INVESTOR CERTIFICATES



AMERICAN CHURCH MORTGAGE COMPANY (THE “COMPANY”)

AMERICAN INVESTORS GROUP, INC. (THE “UNDERWRITER”)




September __, 2017

TABLE OF CONTENTS
	Page
ARTICLE I. DEFINITIONS		1
Section 1.01. Defined Terms.		1
Section 1.02. Accounting Terms.		3
ARTICLE II. APPOINTMENT OF UNDERWRITER AND RELATED AGREEMENTS3		3
Section 2.01. Appointment; Exclusivity		3
Section 2.02. Compensation to Underwriter.		3
Section 2.03. Brokers and Dealers		4
Section 2.04. Underwriter’s Unrelated Activities.		4
Section 2.05. Best Efforts; Independent Contractor.		4
ARTICLE III. SERVICES; STANDARD OF CARE		5
Section 3.01. Services		5
Section 3.02. Reports to the Company.		5
ARTICLE IV. REPRESENTATIONS AND COVENANTS OF THE COMPANY		6
Section 4.01. Representations, Warranties and Agreements of the Company.		6
Section 4.02. Covenants of the Company		11
ARTICLE V. REPRESENTATIONS AND COVENANTS OF UNDERWRITER; CONDITIONS		13
Section 5.01. Representations and Warranties of Underwriter		13
Section 5.02. Covenants of Underwriter.		14
ARTICLE VI. CONDITIONS15		15
Section 6.01. Conditions of the Underwriter’s Obligations.		15
ARTICLE VII. INDEMNIFICATION AND CONTRIBUTION		16
Section 7.01. Company’s Indemnification of Underwriter.		16
Section 7.02. Underwriter’s Indemnification of the Company.		17
Section 7.03. Notice of Indemnification Claim.		18
Section 7.04. Contribution.		18
Section 7.05. Notice of Contribution Claim.		19
Section 7.06. Reimbursement.		20
Section 7.07. Arbitration.		20
ARTICLE VIII. TERM AND TERMINATION		20
Section 8.01. Effective Date of this Agreement.		20
Section 8.02. Termination Prior to Effective Date.		20
Section 8.03. Notice of Termination.		21
Section 8.04. Termination After Effective Date.		21
ARTICLE IX. MISCELLANEOUS		22
Section 9.01. Survival.		22
Section 9.02. Notices		22
Section 9.03. Successors and Assigns; Transfer		22
Section 9.04. Cumulative Remedies.		23
Section 9.05. Attorneys’ Fees.		23
Section 9.06. Entire Agreement		23
Section 9.07. Choice of Law.		23
Section 9.08. Confidentiality.		23
Section 9.09. Rights to Investor Lists.		23
Section 9.10. Waiver: Subsequent Modification.		23
Section 9.11. Severability.		23
Section 9.12. Joint Preparation.		24
Section 9.13. Captions.		24
Section 9.14. Counterparts.		24

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT is entered into as of this __ day of September, 2017, by and between American Church Mortgage Company, a Minnesota corporation (the “Company”), and American Investors Group, Inc., a Minnesota corporation, as underwriter (the “Underwriter”).

RECITALS

WHEREAS, the Company proposes to register and publicly offer and sell up to $10,000,000 aggregate principal amount of Series E Secured Investor Certificates of the Company (the “Certificates”);

WHEREAS, the Company desires to appoint the Underwriter to act as the Company’s exclusive selling agent in connection with the offer, sale and renewal of the Certificates on a best efforts basis, and the Underwriter desires to accept such appointment, all as provided for by the terms of this Agreement.

NOW, THEREFORE, in consideration of the above and for other good and valuable consideration, receipt of which is acknowledged, and in consideration of the mutual promises, covenants, representations and warranties hereinafter set forth, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.01.Defined Terms. Whenever used in this Agreement, the following terms have the respective meanings set forth below. The definitions of such terms are applicable to the singular as well as to the plural forms of such terms.

(a) Advisor. Church Loan Advisors, Inc., or any successor or subsequent advisor of the Company’s business activities.

(b) Agreement. This Distribution Agreement, including any exhibits or attachments hereto, as originally executed, and as amended or supplemented from time to time in accordance with the terms hereof.

(c) Blue Sky laws. State laws and regulations governing the sale of securities.

(d) Blue Sky Memorandum. Memorandum compiling the results of a review of Blue Sky laws and the application of such laws in connection with the Offering.

(e) Certificate Holder. The purchaser of any Certificate or any subsequent transferee or other holder thereof.

(f) Certificates. Up to $10,000,000 aggregate principal amount of Series E Secured Investor Certificates of the Company with substantially the same terms as are described in the Prospectus, and any additional principal amount of Certificates as may be registered from time to time pursuant to the Registration Statement.

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(g) Commission or SEC. The Securities and Exchange Commission.

(h) Company. American Church Mortgage Company, or its successors in interest.

(i) Effective Date. The date and time the Registration Statement is or was declared effective by the Commission.

(j) Exchange Act. The Securities Exchange Act of 1934, as amended.

(k) FINRA. The Financial Industry Regulatory Agency.

(l) Governmental Rule. Any law, rule, regulation, ordinance, order, code, interpretation, judgment, decree, policy, decision or guideline by any governmental authority.

(m) Indenture. That certain Indenture dated on or about September __, 2017, by and between the Company and the Trustee with respect to the Certificates.

(n) Offering. The offer and sale of the Certificates in accordance with the terms and subject to the conditions set forth in the Registration Statement.

(o) Preliminary Prospectus. Any preliminary prospectus included in the Registration Statement prior to the time it becomes or became effective under the Securities Act, including the respective copies thereof filed with the Commission.

(p) Prospectus. The prospectus included in the Registration Statement at the time it is or was declared effective by the Commission, except that if any prospectus provided to the Underwriter by the Company for use in connection with the offering of the Certificates differs from the prospectus as filed with the Commission, the term “Prospectus” shall refer to such differing prospectus from and after the time such prospectus is first provided to the Underwriter by the Company for such use, including the respective copies thereof filed with the Commission.

(q) Registration Statement. That certain Registration Statement on Form S-11 (File No. ) of the Company with respect to the Certificates filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended and declared effective on the date hereof, including the respective copies thereof filed with the Commission.

(r) Rules and Regulations. The rules and regulations under the Securities Act.

(s) Securities Act. The Securities Act of 1933, as amended.

(t) Trustee. Herring Bank, or its successors or assigns.

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(u) Underwriter. American Investors Group, Inc., a Minnesota corporation, or its successors in interest.

Section 1.02.Accounting Terms. Unless otherwise specified in this Agreement, all accounting terms used in this Agreement shall be interpreted, all accounting determinations under this Agreement shall be made, and all financial statements required to be delivered by any person pursuant to this Agreement shall be prepared, in accordance with generally accepted accounting principles as in effect from time to time applied on a consistent basis. To the extent generally accepted accounting practices do not apply to certain reports or accounting practices of the Underwriter, the parties will mutually agree on the accounting practices and assumptions.

ARTICLE II.

APPOINTMENT OF UNDERWRITER AND RELATED AGREEMENTS

Section 2.01.Appointment; Exclusivity. Subject to the terms and conditions set forth herein, the Company appoints the Underwriter as its exclusive agent to sell the Certificates upon the terms and conditions set forth herein. The Underwriter agrees to use its best efforts as such agent to procure purchasers for the Certificates until the later of the termination of the Offering or the sale of all offered Certificates. It is understood and agreed that there is no firm commitment on the part of the Underwriter to purchase any of the Certificates. The Company agrees to direct to the Underwriter all inquiries it receives with respect to the Certificates.

Section 2.02.Compensation to Underwriter.

(a) Underwriter’s Commissions. In consideration of the agreement of the Underwriter to provide its services of the Underwriter as set forth in this Agreement, the Company will pay the Underwriter a commission based on the gross proceeds received on the sale of each Certificate, both in accordance with the schedule set forth as Exhibit A hereto.

(b) Non-Accountable Expenses. To compensate the Underwriter for its other expenses incurred in connection with the Offering, the Company agrees to pay the Underwriter a non-accountable expense allowance of up to $60,000, payable as follows:

(i) $10,000 is payable upon the sale of each $1,000,000 of Certificates up to the sale of $5,000,000 of Certificates; and

(ii) $2,000 is payable upon the sale of each additional $1,000,000 of Certificates up to completion of the sale of all Certificates or the termination of this offering, whichever is first.

Section 2.03.Brokers and Dealers. The Underwriter may, in its sole discretion and at no additional obligation to the Company, use the services of other brokers or dealers who are members of FINRA in connection with the offer and sale of the Certificates. The Underwriter may enter into agreements with any such broker or dealers to act as sub-agents for the sale of the Certificates and pay any portion of the Underwriter’s compensation hereunder to such brokers or dealers.

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Section 2.04.Underwriter’s Unrelated Activities. The Underwriter may sell other securities in offerings similar to the Offering for other issuers during the course of the Offering. The Underwriter shall have the right to advertise or otherwise disclose to unrelated prospective issuers, at its own expense, its relationship with the Company, the services it provides in connection with the Certificates and the amount of money that it raised through the Offering.

Section 2.05.Best Efforts; Independent Contractor. Anything in this Agreement to the contrary notwithstanding, the Underwriter shall have no obligation to sell any minimum principal amount of Certificates or to purchase Certificates for its own account, for resale or for any other purpose. All actions taken by the Underwriter pursuant to this Agreement shall be in the capacity of an independent contractor, all sales of Certificates conducted by the Underwriter shall be solely for the account and at the risk of the Company, and in no event shall the Underwriter have any obligations with regard to or under the Certificates.

ARTICLE III.

SERVICES; STANDARD OF CARE

Section 3.01.Services. The services to be provided to the Company by the Underwriter pursuant to this Agreement shall include the following:

(a) Corporate Finance. The Underwriter shall advise the Company regarding the structure of the Certificates and provide sample document forms. Throughout the Offering, the Underwriter shall assist the Company in determining appropriate Certificate interest rates based on current market conditions and the Company’s capital goals.

(b) Marketing. The Underwriter shall develop and execute a direct response marketing strategy for the Certificates designed to meet the Company’s capital goals in a timely manner. The Underwriter shall manage the process of creating, producing and placing any newspaper, radio, Internet and direct mail advertisements. The Underwriter shall also oversee designing and printing all marketing materials, in accordance with applicable SEC and FINRA rules and regulations.

(c) Company Logo, Etc. During the term of this Agreement, Company shall allow the Underwriter to use the Company’s logo, corporate colors, trademarks, tradenames, fonts, and other aspects of corporate identity in advertisements and marketing materials related to the Certificates.

(d) Securities Issuance; Registrar; Transfer Agent. Upon delivery of each completed subscription agreement for Certificates to the Underwriter, the Underwriter shall deliver such subscription agreement to the Advisor for acceptance or rejection. The Underwriter shall return funds accompanying each rejected subscription to the person submitting the subscription. The Underwriter shall pay funds, net of commissions and expenses, to the Company in connection with accepted subscriptions as received. Certificates shall be issued by the Trustee on the Company’s behalf in book-entry form only and the Trustee shall deliver written book entry receipts with respect to all accepted subscription agreements.    

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(e) Investor Relations. The Underwriter shall handle all inquiries from prospective investors, mail investment kits, meet with prospective investors, process subscription agreements and respond to all written or telephonic questions by prospective investors relating to the Certificates.

Section 3.02.Reports to the Company. From time to time as requested by the Company, the Underwriter shall provide the Company with reports and analysis regarding the status of the offering, the marketing efforts and the principal amount of Certificates remaining available for sale under the Registration Statement.

ARTICLE IV.

REPRESENTATIONS AND COVENANTS OF THE COMPANY

Section 4.01.Representations, Warranties and Agreements of the Company. The Company represents and warrants to and agrees with the Underwriter as follows, which representations and warranties shall be deemed to be made continuously throughout the term of this Agreement:

(a) The Registration Statement on Form S-11 (File No. ) with respect to the Certificates, including the Prospectus subject to completion, has been prepared by the Company in conformity with the requirements of the Securities Act, and the Rules and Regulations of the Commission thereunder and has been filed with the Commission under the Securities Act.

(b) As of the Effective Date, and at all times subsequent thereto until the termination of the Offering, the Registration Statement and Prospectus, and all amendments thereof and supplements thereto, will comply or complied with the provisions and requirements of the Securities Act and the Rules and Regulations. Neither the Commission nor any state securities authority has issued any order preventing or suspending the use of any Preliminary Prospectus or requiring the recirculation of a Preliminary Prospectus, or issued a stop order with respect to the offering of the Certificates (if the Registration Statement has been declared effective), or instituted or, to the Company’s knowledge, threatened the institution of, proceedings for any of such purposes. When the Registration Statement shall become effective and when any post-effective amendment thereto shall become effective, the Registration Statement will not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. When the Registration Statement is or was declared effective by the Commission and at all times subsequent thereto until the termination of the offering, the Prospectus (as amended or supplemented, if the Company shall have filed with the Commission any amendment thereof or supplement thereto) will not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading.

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(c) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Minnesota, with full power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and Prospectus. The Company is duly qualified to do business and is in good standing in each jurisdiction in which the ownership or lease of its properties or the conduct of its business requires such qualification and in which the failure to be qualified or in good standing would have a material adverse effect on the condition (financial or otherwise), earnings, operations or business of the Company, and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.

(d) The Company has operated and is operating in material compliance with all authorizations, licenses, certificates, consents, permits, approvals and orders of and from all state, federal and other governmental regulatory officials and bodies necessary to own its properties and to conduct its business as described in the Registration Statement and Prospectus, all of which are, to the Company’s knowledge, valid and in full force and effect. The Company is conducting its business in substantial compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, and the Company is not in material violation of any applicable law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or over its properties.

(e) The Company is not in violation of its articles of incorporation or bylaws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness or in any contract, lease, indenture, mortgage, loan agreement, joint venture or other agreement or instrument to which it is a party or by which it or its properties are bound.

(f) The Company has full requisite power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement on the part of the Company, enforceable against the Company in accordance with its terms. The performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation of any of the terms and provisions of, or constitute a default under:

(i) any indenture, mortgage, deed of trust loan agreement, bond, debenture, note, agreement or other evidence of indebtedness, any lease, contract, joint venture or other agreement or instrument to which the Company is a party or by which the Company or its properties may be bound;

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(ii) the articles of incorporation or bylaws of the Company: or

(iii) any applicable law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or over its properties.

(g) No consent, approval, authorization or order of or qualification with any court, governmental agency or body, domestic or foreign, having jurisdiction over the Company or over its properties is required for the execution and delivery of this Agreement and the consummation by the Company of the transactions herein contemplated, except such as may be required under the Securities Act, the Exchange Act, or under state or other securities or Blue Sky laws, all of which requirements have been satisfied.

(h) Except as is otherwise expressly described in the Registration Statement or Prospectus, there is neither pending nor, to the best of the Company’s knowledge, threatened, any action, suit, claim or proceeding against the Company or any of its officers or any of its properties, assets or rights before any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or over its officers or properties or otherwise which (A) might result in any material adverse change in the condition (financial or otherwise), earnings, operations or business of the Company or might materially and adversely affect its properties, assets or rights, or (B) might prevent consummation of the transactions contemplated hereby.

(i) The Certificates to be sold hereunder by the Company have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered against payment therefor in accordance with the terms of this Agreement, will be duly and validly issued and fully paid and non-assessable and will be sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest; and no preemptive right, co-sale right, registration right, right of first refusal or other similar right exists with respect to any of the Certificates to be sold hereunder by the Company or the issuance and sale thereof. The Indenture has been duly authorized, executed and delivered by the Company and the Trustee and is a valid and binding agreement on the part of the Company, enforceable against the Company in accordance with its terms. The Certificates will comply as to form with all applicable laws.

(j) Baker Tilly Virchow Krause, LLP which has expressed its opinion with respect to certain of the financial statements included as a part (whether filed or incorporated by reference) of the Registration Statement, is an independent registered public accounting firm within the meaning of the Securities Act, the Public Company Accounting Oversight Board (PCAOB), and the Rules and Regulations. The financial statements of the Company set forth in the Registration Statement and Prospectus (or incorporated therein by reference) comply in all material respects with the requirements of the Securities Act and fairly present the financial position and the results of operations of the Company at the respective dates and for the respective periods to which they apply in accordance with generally accepted accounting principles consistently applied throughout the periods involved; and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. The selected and summary financial included in the Registration Statement (or incorporated therein by reference) present fairly the information shown therein and have been compiled on a basis consistent with the audited financial statements presented therein. No other financial statements or schedules are required by the Securities Act or the Rules and Regulations to be included in the Registration Statement.

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(k) Subsequent to the respective dates as of which information is given in the Registration Statement and Prospectus, except as is otherwise disclosed in the Registration Statement or Prospectus, there has not been:

(i) any change in the capital stock or long term debt (including any capitalized lease obligation) or material increase in the short-term debt of the Company;

(ii) any material adverse change, or any development involving a material adverse change, in or affecting the condition (financial or otherwise), earnings, operations, business or business prospects, management, financial position, shareholders’ equity, results of operations or general condition of the Company;

(iii) any transaction entered into by the Company that is material to the Company;

(iv) any obligation, direct or contingent, incurred by the Company, except obligations incurred in the ordinary course of business that, in the aggregate, are not material; or

(v) any loss or damage (whether or not insured) to the property of the Company which reasonably could be expected to have a material adverse effect on the condition (financial or otherwise), earnings, operations or business of the Company.

(l) Except as is otherwise expressly disclosed in the Registration Statement or Prospectus:

(i) the Company has good and marketable title to all of the property, real and personal, and assets described in the Registration Statement or Prospectus as being owned by it, free and clear of any and all pledges, liens, security interests, encumbrances, equities, charges or claims, other than such as would not have a material adverse effect on the condition (financial or otherwise), earnings, operations or business of the Company;

8

(ii) the agreements to which the Company is a party described in the Registration Statement and Prospectus are valid agreements, enforceable by the Company except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by judicial limitations on the right of specific performance; and

(iii) the Company has valid and enforceable leases for all properties described in the Registration Statement and Prospectus as leased by it, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by judicial limitations on the right of specific performance. Except as set forth in the Registration Statement and Prospectus, the Company owns or leases all such properties as are necessary to its operations as now conducted.

(m) The Company was organized and has been operated to qualify as a real estate investment trust under Section 856 of the Internal Revenue Code and, to the knowledge of the Company, no event has occurred that would cause the Company to fail to so qualify.

(n) The Company has timely filed (or has timely requested an extension of time to file) all necessary federal and state income and franchise tax returns and has paid all taxes shown thereon as due; there is no tax deficiency that has been or, to the best of the Company’s knowledge, could be asserted against the Company that might have a material adverse effect on the condition (financial or otherwise), earnings, operations, business or properties of the Company, and all tax liabilities are adequately provided for in the books of the Company.

(o) The Company owns, or possesses adequate rights to use, all patents, patent rights, inventions, trade secrets, know-how, technology, service marks, trade names, copyrights, trademarks and proprietary rights or information which are necessary for the conduct of its present or intended business as described in the Registration Statement or Prospectus. The expiration of any patents, patent rights, trade secrets, trademarks, service marks, trade names or copyrights would not have a material adverse effect on the condition (financial or otherwise), earnings, operations or business of the Company and the Company has not received any notice of, and has no knowledge of, any infringement of or conflict with the asserted rights of others with respect to any patent, patent rights, inventions, trade secrets, know-how, technology, trademarks, service marks, trade names or copyrights that, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, might have a material adverse effect on the condition (financial or otherwise), earnings, operations, business or business prospects of the Company.

9

(p) The Company has not taken and will not take, directly or indirectly, any action (and does not know of any action by its directors, officers, members or others) which has constituted or is designed to, or which might reasonably be expected to, cause or result in stabilization or manipulation, as defined in the Exchange Act or otherwise, of the price of any security of the Company to facilitate the sale or resale of the Certificates. The Company has not distributed and will not distribute prior to the completion of the distribution of the Certificates, any offering material in connection with the offering and sale of the Certificates other than any Preliminary Prospectus, the Prospectus, the Registration Statement and other materials, if any, permitted by the Securities Act.

(q) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that transactions are executed in accordance with management’s general or specific authorizations and transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles. To maintain accountability for assets, access to assets is permitted only in accordance with management’s general or specific authorization, and the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(r) Except as set forth in the Registration Statement and Prospectus:

(i) the Company and each entity that owns or possesses real property in which the Company holds a security interest is in material compliance with all material rules, laws and regulations relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (the “Environmental Laws”) which are applicable to its business;

(ii) the Company has received no notice from any governmental authority or third party of an asserted claim under Environmental Laws, which claim is required to be disclosed in the Registration Statement and the Prospectus;

(iii) the Company will not be required to make any future material capital expenditures to comply with Environmental Laws; and

(iv) no property which is owned, leased or occupied by the Company or in which the Company holds a security interest has been designated as a Superfund site pursuant to the Comprehensive Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et seq.), or otherwise designated as a contaminated site under applicable state or local law.

(s) No person or entity other than the Underwriter is entitled to any compensation or other payments from either the Company or the Underwriter, as a finder, underwriter or agent in connection with the Offering or any other proposed transaction between the Company and the Underwriter. The Company agrees to promptly notify the Underwriter of any such relationships, including consulting or prior agency agreements entitling other parties to compensation for the transaction described herein and agrees to provide the Underwriter with a copy of such agreements.

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(t) Any certificate signed by any officer of the Company and delivered to the Underwriter or to the Underwriter’s Counsel shall be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.

Section 4.02.Covenants of the Company. The Company hereby covenants and agrees with the Underwriter as follows:

(a) If the Registration Statement has not already been declared effective by the Commission, the Company will use its best efforts to cause the Registration Statement and any post-effective amendments thereto to become effective as promptly as possible. The Company will notify the Underwriter promptly of the time when the Registration Statement or any post-effective amendment to the Registration Statement has become effective or any supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or additional information. The Company will prepare and file with the Commission, promptly upon the Underwriter’s request, any amendments or supplements to the Registration Statement or Prospectus that, in the Underwriter’s opinion, may be necessary or advisable in connection with the distribution of the Certificates by the Underwriter. The Company will not file any amendment or supplement to the Registration Statement or Prospectus to which the Underwriter shall reasonably object by notice to the Company after having been furnished a copy a reasonable time prior to the filing.

(b) The Company will advise the Underwriter, promptly after it shall receive notice or obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Certificates for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose. The Company will promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued.

(c) Within the time during which a prospectus relating to the Certificates is required to be delivered under the Securities Act, the Company will comply as far as it is able with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Certificates as contemplated by the provisions hereof and the Prospectus. If, during the longer of such period or the term of this Agreement, any event or change occurs that could reasonably be considered material to the Offering or that causes any of the representations and warranties of the Company contained herein to be untrue, or as a result of which the Prospectus would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if, during such period, it is necessary to amend the Registration Statement or supplement the Prospectus to comply with the Securities Act, the Company will promptly notify the Underwriter, and will amend the Registration Statement or supplement the Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

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(d) The Company will use its best efforts to arrange for the qualification of the Certificates for offering and sale under the securities laws of such jurisdictions as the Underwriter may designate and to continue such qualifications in effect for so long as may be required for purposes of the distribution of the Certificates. In each jurisdiction in which the Certificates shall have been qualified as herein provided, the Company will make and file such statements and reports in each year as are or may be reasonably required by the laws of such jurisdiction.

(e) The Company will furnish to the Underwriter copies of the Registration Statement, each Preliminary Prospectus, the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Underwriter may from time to time reasonably request.

(f) At all times during the term of this Agreement, the Company shall provide all information reasonably requested by the Underwriter in a timely manner and shall use its best efforts to insure that such information is complete and accurate.

(g) The Company will apply the net proceeds from the sale of the Certificates substantially in the manner set forth under the caption “Use of Proceeds” in the Prospectus.

ARTICLE V.

REPRESENTATIONS AND COVENANTS OF UNDERWRITER; CONDITIONS

Section 5.01.Representations and Warranties of Underwriter. The Underwriter hereby represents and warrants to the Company as follows, which representations and warranties shall be deemed to be made continuously throughout the term of this Agreement.

(a) The Underwriter (i) has been duly organized, is validly existing and in good standing as a Delaware corporation, (ii) has qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, and (iii) has full power, authority and legal right to own its property, to carry on its business as presently conducted, and to enter into and perform its obligations under this Agreement.

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(b) The execution and delivery by the Underwriter of this Agreement are within the power of the Underwriter and have been duly authorized by all necessary corporate action on the part of the Underwriter. Neither the execution and delivery of this Agreement nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any Governmental Rule binding on the Underwriter, the charter or by-laws of the Underwriter, or any of the provisions of any indenture, mortgage, contract or other instrument to which the Underwriter is a party or by which it is bound; nor will they result in the creation or imposition of any lien, charge or encumbrance upon any of the Underwriter’s property pursuant to the terms of any indenture, mortgage, contract or other instrument.

(c) The Underwriter has all governmental consents, licenses, approvals and authorizations, registrations and declarations which are necessary for the execution, delivery, performance, validity and enforceability of the Underwriter’s obligations under this Agreement.

(d) This Agreement has been duly executed and delivered by the Underwriter and, constitutes a legal, valid and binding instrument enforceable against the Underwriter in accordance with its terms.

(e) There are no actions, suits or proceedings pending or, to the knowledge of the Underwriter, threatened against or affecting the Underwriter, before or by any court, administrative agency, arbitrator or governmental body with respect to any of the transactions contemplated by this Agreement, or which will, if determined adversely to the Underwriter, materially and adversely affect it or its business, assets, operations or condition, financial or otherwise, or adversely affect the Underwriter’s ability to perform its obligations under this Agreement. The Underwriter is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement.

Section 5.02.Covenants of Underwriter. The Underwriter hereby covenants to the Company as follows, which covenants shall be deemed in force unless and until this Agreement is terminated as provided herein:

(a) The Underwriter shall keep in full effect its existence, rights and franchises as a corporation under the laws of the State of Delaware and retain and preserve its right to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Certificates and this Agreement and shall hold all licenses in all jurisdictions which are necessary to perform its obligations under this Agreement.

(b) The Underwriter shall punctually perform and observe all of its obligations and agreements contained in this Agreement.

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(c) Except as provided in this Agreement, the Underwriter shall not take any action, or permit any action to be taken by others, which would excuse any person from any of its covenants or obligations under any of the Certificates, or under any other instrument related to the Certificates, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the Securities or any such instrument or any right in favor of the Company in any of the Certificates or such instrument, without the written consent of the Company.

(d) The Underwriter shall not assign this Agreement or any of its rights, powers, duties or obligations hereunder without the express prior written consent of the Company, which shall not be unreasonably withheld; provided that the Underwriter may assign its rights, powers, duties or obligations hereunder to an affiliate of the Underwriter or pursuant to a sale of all or substantially all of the Underwriter’s assets without the prior written consent of the Company.

(e) The Underwriter shall take such additional action as is reasonably requested by the Company in order to carry out the purposes of this Agreement.

ARTICLE VI.

CONDITIONS

Section 6.01.Conditions of the Underwriter’s Obligations. The obligation of the Underwriter to sell the Certificates on a best efforts basis as provided herein shall be subject to the accuracy of the representations and warranties of the Company, to the performance by the Company of its obligations hereunder, and to the satisfaction of the following additional conditions:

(a) The Registration Statement shall have become effective not later than 4:00 p.m. Minneapolis, Minnesota time on the date of this Agreement, or such later date or time as shall be consented to in writing by the Underwriter (the “Effective Date”), and no stop order suspending the effectiveness thereof shall have been issued and no proceedings for that purpose shall have been initiated or, to the knowledge of the Company, or the Underwriter, threatened by the Commission or any state securities commission or similar regulatory body. Any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the satisfaction of the Underwriter and the Underwriter’s counsel.

(b) The Underwriter shall not have advised the Company that the Registration Statement or Prospectus, or any amendment thereof or supplement thereto, contains any untrue statement of a fact which is material or omits to state a fact which is material and is required to be stated therein or is necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

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(c) Subsequent to the Effective Date and prior to termination of the offering, there shall not have occurred any change, or any development involving a prospective change, which materially and adversely affects the Company’s condition (financial or otherwise), earnings, operations, properties, business or business prospects from that set forth in the Registration Statement or Prospectus, and which, in the Underwriter’s sole judgment, is material and adverse and that makes it, in the Underwriter’s sole judgment, impracticable or inadvisable to proceed with the offering of the Certificates as contemplated by the Prospectus and this Agreement.

(d) All corporate proceedings and other legal matters in connection with this Agreement, the form of Registration Statement and the Prospectus, and the registration, authorization, issue, sale and delivery of the Certificates shall have been reasonably satisfactory to the Underwriter’s counsel, and the Underwriter’s counsel shall have been furnished with such papers and information as it may reasonably have requested to enable it to pass upon the matters referred to in this Section.

(e) At the time of execution of this Agreement, the Underwriter shall have received from Baker Tilly Virchow Krause, LLP a letter dated the date of such execution, in form and substance satisfactory to the Underwriter, to the effect that they are independent registered public accountants with respect to the Company within the meaning of the Securities Act, the PCAOB, and the applicable published instructions, and the Rules and Regulations thereunder, and further stating in effect that in their opinion, the audited financial statements included (or incorporated by reference) in the Registration Statement and Prospectus covered by their report included therein comply as to form in all material respects with the applicable requirements of the Securities Act, the PCAOB, the published instructions and the Rule and Regulations.

(f) Winthrop & Weinstine, P.A. shall have delivered to the Underwriter a Blue Sky Memorandum reasonably satisfactory to the Underwriter confirming that all requisite actions for the offer and sale of the Certificates in all jurisdictions requested by the Underwriter have been taken.

(g) The Company shall have furnished to the Underwriter such additional certificates, documents and evidence as the Underwriter shall reasonably request.

All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory to the Underwriter and the Underwriter’s counsel. All statements contained in any certificate, letter or other document delivered pursuant hereto by, or on behalf of, the Company shall be deemed to constitute representations and warranties of the Company.

The Underwriter may waive in writing the performance of any one or more of the conditions specified in this Section or extend the time for their performance.

If any of the conditions specified in this Section shall not have been fulfilled when and as required by this Agreement to be fulfilled and if the fulfillment of said condition has not been waived by the Underwriter, this Agreement and all obligations of the Underwriter hereunder may be canceled at, or at any time prior to, the Effective Date by the Underwriter. Any such cancellation shall be without liability of the Underwriter to the Company and shall not relieve the Company of its obligations under Article VII hereof. Notice of such cancellation shall be given to the Company as specified in Section 8.03.

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ARTICLE VII.

INDEMNIFICATION AND CONTRIBUTION

Section 7.01.Company’s Indemnification of Underwriter. The Company hereby agrees to indemnify and hold harmless the Underwriter, and each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Underwriter or each such controlling person may become subject under the Securities Act, the Exchange Act, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, (i) any breach of any representation, warranty, agreement or covenant of the Company contained in this Agreement; (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or supplement thereto, or the omission or alleged omission to state in the Registration Statement or any amendment thereof or supplement thereto a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (iii) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, if used prior to the Effective Date of the Registration Statement, or in the Prospectus (as amended or as supplemented), or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iv) any untrue statement or alleged untrue statement of a material fact contained in any application or other statement executed by the Company or based upon written information furnished by the Company filed in any jurisdiction in order to qualify the Certificates under, or exempt the Certificates or the sale thereof from qualification under, the securities laws of such jurisdiction, or the omission or alleged omission to state in such application or statement a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company will reimburse the Underwriter and each such controlling person for any legal or other expenses incurred by the Underwriter or controlling person in connection with investigating or defending against any such loss, claim, damage, liability or action. However, the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use in the preparation of the Registration Statement or any such post-effective amendment thereof, any such Preliminary Prospectus, or the Prospectus, or any such amendment thereof or supplement thereto, or in any application or other statement executed by the Company or the Underwriter filed in any jurisdiction in order to qualify the Certificates under, or exempt the Certificates or the sale thereof from qualification under, the securities laws of such jurisdiction. This indemnity agreement is in addition to any liability which the Company may otherwise have.

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Section 7.02.Underwriter’s Indemnification of the Company. The Underwriter agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the Registration Statement, and each person who controls the Company within the meaning of Section 15 of the Securities Act against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person may become subject under the Securities Act, the Exchange Act, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or supplement thereto, or the omission or alleged omission to state in the Registration Statement or any amendment thereof or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, if used prior to the Effective Date of the Registration Statement, or in the Prospectus (as amended or as supplemented), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) any untrue statement or alleged untrue statement of a material fact contained in any application or other statement executed by the Company or by the Underwriter and filed in any jurisdiction in order to qualify the Certificates under, or exempt the Certificates or the sale thereof from qualification under, the securities laws of such jurisdiction, or the omission or alleged omission to state in such application or statement a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by, or on behalf of, the Underwriter specifically for use in the preparation of the Registration Statement or any such post-effective amendment thereof, any such Preliminary Prospectus, or the Prospectus or any such amendment thereof or supplement thereto, or in any application or other statement executed by the Company or by the Underwriter and filed in any jurisdiction. The Underwriter will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, or controlling person in connection with investigating or defending against any such loss, claim, damage, liability or action. This indemnity agreement is in addition to any liability which the Underwriter may otherwise have.

Section 7.03.Notice of Indemnification Claim. Promptly after receipt by an indemnified party under Section 7.01 or 7.02 of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under Section 7.01 or 7.02, notify in writing the indemnifying party of the commencement thereof. Failure to so notify the indemnifying party will relieve it from any liability under Section 7.01 or 7.02 as to the particular item for which indemnification is then being sought, but not from any other liability which it may have to any indemnified party. In case any such action is brought against any indemnified party, and the indemnified party notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof, with counsel who shall be reasonably satisfactory to such indemnified party. After notice from the indemnifying party to such indemnified party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under Section 7.01 or 7.02 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party, and the indemnified party shall have reasonably concluded that there may be legal defenses available to it or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select as separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties, in which event the fees and expenses of such separate counsel shall be borne by the indemnifying party. Any such indemnifying party shall not be liable to any such indemnified party on account of any settlement of any claim or action effected without the consent of such indemnifying party.

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Section 7.04.Contribution. In order to provide for just and equitable contribution in any action in which the Underwriter or the Company (or any person who controls the Underwriter or the Company within the meaning of Section 15 of the Securities Act) makes claim for indemnification pursuant to Section 7.01 or 7.02 hereof, but such indemnification is unavailable or insufficient to hold harmless and indemnify a party under Section 7.01 or 7.02, as applicable, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in Section 7.01 or 7.02, as applicable, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other from the offering of the Securities hereunder or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of the Company on the one hand and the Underwriter on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriter on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Securities (before deducting expenses) received by the Company bear to the total commissions received by the Underwriter. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriter and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriter agree that it would not be just and equitable if contributions pursuant to this Section 7.04 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the first sentence of this Section 7.04. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 7.04 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim which is the subject of this Section 7.04. Notwithstanding the provisions of this Section, the Underwriter shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities distributed to the public were offered to the public exceeds the amount of any damages that the Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation.

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Section 7.05.Notice of Contribution Claim. Promptly after receipt by a party to this Agreement of notice of the commencement of any action, suit or proceeding, such person will, if a claim for contribution in respect thereof is to be made against another party (the “Contributing Party”), notify the Contributing Party of the commencement thereof, but the failure to so notify the Contributing Party will not relieve the Contributing Party from any liability which it may have to any party other than under Section 7.04. Any notice given pursuant to Section 7.03 hereof shall be deemed to be like notice under this Section 7.05. In case any such action, suit or proceeding is brought against any party, and such person notifies a Contributing Party of the commencement thereof, the Contributing Party will be entitled to participate therein with the notifying party and any other Contributing Party similarly notified.

Section 7.06.Reimbursement. In addition to its other obligations under Section 7.01 and 7.04 hereof, the Company agrees that, as an interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding described in Section 7.01, it will reimburse the Underwriter on a monthly basis for all legal or other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Company’s obligation to reimburse the Underwriter for such expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. To the extent that any such interim reimbursement payment is so held to have been improper, the Underwriter shall promptly return such payment to the Company.

Section 7.07.Arbitration. It is agreed that any controversy arising out of the operation of the interim reimbursement arrangements set forth in Section 7.06 hereof, including the amounts of any requested reimbursement payments and the method of determining such amounts, shall be settled by arbitration conducted pursuant to the Code of Arbitration Procedure of FINRA. Any such arbitration must be commenced by service of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. If the party demanding arbitration does not make such designation of an arbitration tribunal in such demand or notice, then the party responding to said demand or notice is authorized to do so. Any such arbitration will be limited to the operation of the interim reimbursement provisions contained in Section 7.06 hereof and will not resolve the ultimate propriety or enforceability of the obligation to indemnify for expenses which is created by the provisions of Section 7.01 and 7.02 hereof or the obligation to contribute to expenses which is created by the provisions of Section 7.04 hereof.

ARTICLE VIII.

TERM AND TERMINATION

Section 8.01.Effective Date of this Agreement. This Agreement shall become effective on the Effective Date immediately after the time at which the Registration Statement shall become effective under the Securities Act.

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Section 8.02.Termination Prior to Effective Date. This Agreement may be terminated by the Underwriter, at its option, by giving notice to the Company, if (i) the Company shall have failed, refused, or been unable, at or prior to the Effective Date, to perform any agreement on its part to be performed hereunder; (ii) any other condition of the Underwriter’s obligations hereunder is not fulfilled or waived by the Underwriter; (iii) a banking moratorium shall have been declared by federal, New York or Minnesota authorities; (iv) there shall have been such a serious, unusual and material change in general economic, monetary, political or financial conditions, or the effect of international conditions on the financial markets in the United States shall be such as, in the judgment of the Underwriter, makes it inadvisable to proceed with the delivery of the Certificates; (v) the enactment, publication, decree or other promulgation of any federal or state statute, regulation, rule or order of any court or other governmental authority which, in the judgment of the Underwriter, materially and adversely affects or will materially and adversely affect the business or operations of the Company; or (vi) there shall be a material outbreak of hostilities or material escalation and deterioration in the political and military situation between the United States and any foreign power, or a formal declaration of war by the United States of America shall have occurred. Any such termination shall be without liability of any party to any other party, except as provided in Sections 7.01, 7.02 and 7.04 hereof; provided, however, that the Company shall remain obligated to pay costs and expenses of the Company and the Underwriter (but only to the extent of actual accountable out-of-pocket expenses) to the extent provided in Section 2.02 hereof.

Section 8.03.Notice of Termination. If the Underwriter elects to prevent this Agreement from becoming effective or to terminate this Agreement as provided in Section 8.02, it shall notify the Company and the Company’s counsel promptly by telephone or transmitted by any standard form of telecommunication, confirmed by letter sent to the address specified in Section 9.02 hereof. If the Company shall elect to prevent this Agreement from becoming effective, it shall notify the Underwriter promptly by telephone or transmitted by any standard form of telecommunication, confirmed by letter sent to the addresses specified in Section 9.02 hereof.

Section 8.04.Termination After Effective Date. The Company or the Underwriter may terminate this Agreement at any time subsequent to the Effective Date as provided below, and in such case, the Underwriter will be paid fees and commissions accrued up to the date of such termination plus its expenses accrued as of such date within thirty (30) days of such termination:

(a) The Company will have the ability to terminate this Agreement by notice to the Underwriter upon the occurrence of any of the following:

(i) any of the circumstances described in clauses (iii) through (vi) of Section 8.02;

(ii) the Company has given the Underwriter notice of the Underwriter’s default in any material term of this Agreement, or material non-compliance with any representation or warranty of the Underwriter contained herein, and such default or non-compliance is not cured within 30 days of such notice; or

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(iii) termination of the Offering by the Company.

(b) The Underwriter will have the ability to terminate this Agreement by notice to the Company upon the occurrence of any of the following:

(i) any of the circumstances described in clauses (iii) through (vi) of Section 8.02;

(ii) the Underwriter has given the Company notice of the Company’s default in any material term of this Agreement, or material non-compliance with any representation or warranty of the Underwriter contained herein, and such default or non-compliance is not cured within thirty (30) days of such notice; or

(iii) termination of the Offering by the Company.

ARTICLE IX.

MISCELLANEOUS

Section 9.01.Survival. The respective indemnity and contribution agreements of the Company and the Underwriter contained in the representations, warranties, covenants, and agreements of the Company set forth in Article IV hereof, shall remain operative and in full force and effect, regardless of any investigation made by, or on behalf of, the Underwriter, the Company, any of its officers and directors, or any controlling person referred to in Article VII and shall survive the sale of the Certificates. The aforesaid indemnity and contribution agreements shall also survive any termination or cancellation of this Agreement. Any successor of any party or of any such controlling person, or any legal representative of such controlling person, as the case may be, shall be entitled to the benefit of the respective indemnity and contribution agreements.

Section 9.02.Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed, delivered or transmitted by any standard form of telecommunication, as follows:

If to the Underwriter, to: American Investors Group, Inc.

10237 Yellow Circle Drive

Minnetonka, Minnesota 55343

Attention: Philip Myers

Tel. (952) 945-9455 x 126

If to the Company, to: American Church Mortgage Company

10237 Yellow Circle Drive

Minnetonka, Minnesota 55343

Attention: Philip Myers

Tel. (952) 945-9455 x 126

In either case

with a copy to: Winthrop & Weinstine, P.A.

225 South Sixth Street

Suite 3500

Minneapolis, Minnesota 55402

Attention: Philip T. Colton

Tel. (612) 604-6729

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Section 9.03.Successors and Assigns; Transfer. This Agreement shall inure to the benefit of and be binding upon the Underwriter and the Company and their respective successors and assigns, and the officers, directors and controlling persons referred to in Article VII. Nothing expressed in this Agreement is intended or shall be construed to give any person or corporation, other than the parties hereto, their respective successors and assigns, and the controlling persons, officers and directors referred to in Article VII, any legal or equitable right, remedy or claim under, or in respect of, this Agreement or any provision herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective executors, administrators, successors, assigns and such controlling persons, officers and directors, and for the benefit of no other person or corporation. No purchaser of any Certificates shall be construed a successor, assignee or third party beneficiary of this Agreement merely by reason of such purchase. Except as provided in Section 5.02(d), neither party may assign its rights and obligations under this Agreement without the written consent of the other party.

Section 9.04.Cumulative Remedies. Unless otherwise expressly provided herein, the remedies of the parties provided for herein shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of the party for whose benefit such remedy is provided, and may be exercised as often as occasion therefor shall arise.

Section 9.05.Attorneys’ Fees. In the event of any action to enforce or interpret this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs, whether or not such action proceeds to judgment.

Section 9.06.Entire Agreement. Except as otherwise expressly provided herein, this Agreement constitutes the entire agreement of the parties hereto with respect to the matters addressed herein and supersedes all prior or contemporaneous contracts, promises, representations, warranties and statements, whether written or oral, with respect to such matters.

Section 9.07.Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without regard to conflict of law principles.

Section 9.08.Confidentiality. The Company agrees to keep confidential all non-public information concerning the marketing, selling and administration of the Certificates, except as disclosure may be required by law. The Underwriter agrees to keep confidential all non-public information supplied to it by the Company, including without limitation, all non-public information obtained during any due diligence investigation of the Company.

Section 9.09.Rights to Investor Lists. The Offering will produce a list of investors that purchase Certificates, a list of prospects that respond to advertisements but do not purchase any Certificates and a list of former investors whose Certificates have been repaid by the Company. Both the Company and the Underwriter shall be able to use these lists for their own business purposes as long as doing so does not interfere with the marketing, sale or administration of the Certificates.

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Section 9.10.Waiver: Subsequent Modification. Except as expressly provided herein, no delay or omission by any party in insisting upon the strict observance or performance of any provision of this Agreement, or in exercising any right or remedy, shall be construed as a waiver or relinquishment of such provision, nor shall it impair such right or remedy, and no waiver by any party or any failure or refusal of the other party to comply with its obligations under this Agreement shall be deemed a waiver of any other or subsequent failure or refusal to so comply by such other party. No waiver or modification of the terms hereof shall be valid unless in writing and signed by the party to be charged, and then only to the extent therein set forth.

Section 9.11.Severability. If any term or provision of this Agreement or application thereof to any person or circumstance shall, to any extent, be found by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

Section 9.12.Joint Preparation. The preparation of this Agreement has been a joint effort of the parties and the resulting document shall not, solely as a matter of judicial construction, be construed more severely against one of the parties than the other.

Section 9.13.Captions. The title of this Agreement and the headings of the various articles, section and subsections have been inserted only for the purpose of convenience, are not part of this Agreement and shall not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement.

Section 9.14.Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, this Distribution Agreement is hereby entered into by the undersigned parties as of the date first set forth above.

THE COMPANY: AMERICAN CHURCH MORTGAGE COMPANY

By: ________________________

Philip J. Myers, President

THE UNDERWRITER: AMERICAN INVESTORS GROUP, INC.

By: ________________________

Philip J. Myers, President

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EXHIBIT A

COMPENSATION TO THE UNDERWRITER

Compensation for Sale of Certificates: The Company shall pay the Underwriter a commission and an underwriter’s management fee upon each sale of a Certificate based on the principal amount of the Certificates sold in the Offering as follows:

§ upon an original issuance, the commission shall be 2.75% plus an additional 1.00% underwriter’s management fee on the sale.

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EX-1.2

EXHIBIT 1.2

AMERICAN CHURCH MORTGAGE COMPANY

SOLICITING DEALERS AGREEMENT

Ladies and Gentlemen:

We have entered into an agreement (the "Distribution Agreement") which is a part hereof and attached hereto, with American Church Mortgage Company, a Minnesota corporation (the "Company"), under which we have agreed to use our best efforts to solicit subscriptions for the Series E Secured Investor Certificates (the "Certificates") of the Company. The Company is offering to the public an aggregate maximum of $10,000,000 worth of Certificates at a price of $1,000 per Certificate (the "Offering").

In connection with the performance of our obligations under Section 2 of the Distribution Agreement, we are authorized to use the services of securities dealers who are members of the Financial Industry Regulatory Agency (the "Soliciting Dealers") to solicit subscriptions. You are hereby invited to become a Soliciting Dealer and, as such, to use your best efforts to solicit subscribers for Certificates, in accordance with the following terms and conditions:

1.A registration statement (the "Registration Statement") with respect to $10,000,000 worth of Certificates has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), and has become effective. Additional copies of the Prospectus will be supplied to you in reasonable quantities upon request. We will also provide you with reasonable quantities of any supplemental literature prepared by the Company in connection with the offering of the Certificates.

2.Solicitation and other activities by the Soliciting Dealers hereunder shall be undertaken only in accordance with the Distribution Agreement, this Agreement, the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the applicable rules and regulations of the Commission, the Blue Sky Memorandum hereinafter referred to and the Rules of FINRA. In offering the sale of Certificates to any person, each Soliciting Dealer shall have reasonable grounds to believe (based on such information as the investment objectives, other investments, financial situation and needs of the person or any other information known by you after due inquiry) that: (i) such person is or will be in a financial position appropriate to enable such person to realize to a significant extent the benefits described in the Prospectus and has a net worth sufficient to sustain the risks inherent in the program, including loss of investment and lack of liquidity, (ii) the purchase of the Certificates is otherwise suitable for such person, and each Soliciting Dealer shall maintain records disclosing the basis upon which each Soliciting Dealer determined the suitability of any persons offered Certificates; and (iii) such person meets the suitability standards established for the offering in the states in which the Soliciting Dealer is soliciting transactions.

Each Soliciting Dealer agrees: (i) to deliver to each person who subscribes for the Certificates, a Prospectus, as then supplemented or amended, prior to the tender of his account application (the "Account Application"); (ii) to comply promptly with the written request of any person for a copy of the Prospectus during the period between the effective date of the Registration Statement and the later of the termination of the distribution of the Certificates or

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the expiration of 90 days after the first date upon which the Certificates were offered to the public; (iii) deliver in accordance with applicable law or as prescribed by any state securities administrator to any person a copy of any document included within the Registration Statement, including delivering the Articles and Bylaws (as each is defined in the Prospectus) to investors who are residents of states which we advise you in writing require delivery of such additional documents to prospective investors resident in their states; and (iv) to maintain in its files for at least six years documents disclosing the basis upon which the determination of suitability was reached as to each purchaser of Certificates.

3.Subject to the terms and conditions set forth herein and in the Distribution Agreement, the Company shall pay to you (i) a selling commission of 2.75% per Share for all Certificates sold for which you have acted as Soliciting Dealer pursuant to this Agreement. Notwithstanding the foregoing, it is understood and agreed that no commission shall be payable with respect to particular Certificates if the Company rejects a proposed subscriber's Account Application.

4.We reserve the right to notify you by telegram or by other means of the number of Certificates reserved for sale by you. Such Certificates will be reserved for sale by you until the time specified in our notification to you. Sales of any reserved Certificates after the time specified in the notification to you or any requests for additional Certificates will be subject to rejection in whole or in part.

5.Payments for Certificates shall be made payable to "American Church Mortgage Company" and forwarded together with a copy of the Account Application, which is attached to the Prospectus, executed by the subscriber, to American Investors Group, Inc., 10237 Yellow Circle Drive, Minnetonka, Minnesota 55343, shall be transmitted not later than noon of the next business day after receipt of such Account Application and check (when your internal supervisory procedures are completed at the site at which the Account Application and check were received by you) or, when your internal supervisory procedures are performed at a different location (the "Final Review Office"), you shall transmit the check and Account Application to the Final Review Office by noon of the next business day following your receipt of the Account Application and check. The Final Review Office will, by noon of the next business day following its receipt of the Account Application and check, forward both to the Underwriter as processing broker-dealer. If any Account Application solicited by you is rejected by the Company, the Account Application and check will be forwarded by the Company back to us for prompt return to the rejected subscriber.

6.We will inform you in writing as to the jurisdictions in which we have been advised by the Company that the Certificates have been qualified for sale or are exempt under the respective securities or "blue sky" laws of such jurisdictions; but we have not assumed and will not assume any obligation or responsibility as to your right to act as a broker with respect to the Certificates in any such jurisdiction. You agree that you will not make any offers except in states in which we may advise you that the Offering has been qualified or is exempt and further agree to assure that each person to whom you sell Certificates (at both the time of the initial purchase as well as at the time of any subsequent purchases) meets any special suitability standards which apply to sales in a particular jurisdiction, as described in the Blue Sky Memorandum and the Account Application. Neither we, nor the Company assume any

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obligation or responsibility in respect of the qualification of the Certificates covered by the Prospectus under the laws of any jurisdiction or your qualification to act as a broker with respect to the Certificates in any jurisdiction. The Blue Sky Memorandum which has been or will be furnished to you indicates the jurisdictions in which it is believed that the offer and sale of Certificates covered by the Prospectus is exempt from, or requires action under, the applicable blue sky or securities laws thereof, and what action, if any, has been taken with respect thereto. It is understood and agreed that under no circumstances will you, as a Soliciting Dealer, engage in any activities hereunder in any jurisdiction in which you may not lawfully so engage or in any activities in any jurisdiction with respect to the Certificates in which you may lawfully so engage unless you have complied with the provisions hereof.

7.Neither you nor any other person is authorized by the Company or by us to give any information or make any representations in connection with this Agreement or the offer of Certificates other than those contained in the Prospectus, as then amended or supplemented, or any sales literature approved by us and the Company. You agree not to publish, circulate or otherwise use any other advertisement or solicitation material without our prior written approval. You are not authorized to act as our agent in any respect, and you agree not to act as such agent and not to purport to act as such agent.

8.We shall have full authority to take such action as we may deem advisable with respect to all matters pertaining to the Offering or arising thereunder. We shall not be under any liability (except for our own want of good faith and for obligations expressly assumed by us hereunder) for or in respect of the validity or value of or title to, the Certificates; the form of, or the statements contained in, or the validity of, the Registration Statement, the Prospectus or any amendment or supplement thereto, or any other instrument executed by Church Loan Advisors, Inc., the Company's advisor (the "Advisor"), the Company or by others; the form or validity of the Distribution Agreement or this Agreement; the delivery of the Certificates; the performance by the Advisor, the Company or by any of them of any agreement on its or their part; the qualification of the Certificates for sale under the laws of any jurisdiction; or any matter in connection with any of the foregoing; provided, however, that nothing in this paragraph shall be deemed to relieve the Company or the undersigned from any liability imposed by the Act. No obligations on the part of the Company or the undersigned shall be implied or inferred herefrom.

9.Under the Distribution Agreement, the Company has agreed to indemnify you and us and each person, if any, who controls you or us, in certain instances and against certain liabilities, including liabilities under the Act in certain circumstances. You agree to indemnify the Company and each person who controls it as provided in the Distribution Agreement and to indemnify us to the extent and in the manner that you agree to indemnify the Company in such Distribution Agreement.

10.Each Soliciting Dealer hereby authorizes and ratifies the execution and delivery of the Distribution Agreement by us as Distribution for ourselves and on behalf of the Soliciting Dealers and authorizes us to agree to any variation of its terms or provisions and to execute and deliver any amendment, modification or supplement thereto. Each Soliciting Dealer hereby agrees to be bound by all provisions of the Distribution Agreement relating to Soliciting Dealers. Each Soliciting Dealer also authorizes us to exercise, in our discretion, all the authority or discretion now or hereafter vested in us by the provisions of the Distribution Agreement and to

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take all such action as we may believe desirable in order to carry out the provisions of the Distribution Agreement and of this Agreement.

11.This Agreement, except for the provisions of Sections 8 and 9 hereof, may be terminated at any time by either party hereto by two days' prior written notice to the other party and, in all events, this Agreement shall terminate on the termination date of the Distribution Agreement, except for the provisions of Sections 8 and 9 hereof.

12.Any communications from you should be in writing addressed to us at American Investors Group, Inc., 10237 Yellow Circle Drive, Minnetonka, Minnesota 55343, Attention: Philip J. Myers. Any notice from us to you shall be deemed to have been duly given if mailed, telegraphed or delivered by overnight courier to you at your address shown below.

13.Nothing herein contained shall constitute the Soliciting Dealers or any of them as an association, partnership, limited liability company, unincorporated business or other separate entity.

14.Prior to offering the Certificates for sale, each Soliciting Dealer shall have conducted an inquiry such that you have reasonable grounds to believe, based on information made available to you by the Company or the Advisor through the Prospectus or other materials, that all material facts are adequately and accurately disclosed and provide a basis for evaluating a purchase of Certificates. In determining the adequacy of disclosed facts pursuant to the foregoing, each Soliciting Dealer may obtain, upon request, information on material facts relating at a minimum to the following:

(1) items of compensation;

(2) loan policies and investment guidelines;

(3) tax aspects;

(4) financial stability and experience of the Company and the Advisor;

(5) conflicts and risk factors; and

(6) other pertinent reports.

Notwithstanding the foregoing, each Soliciting Dealer may rely upon the results of an Inquiry conducted by another Soliciting Dealer, provided that:

(i) such Soliciting Dealer has reasonable grounds to believe that such inquiry was conducted with due care;

(ii) the results of the inquiry were provided to you with the consent of the Soliciting Dealer conducting or directing the inquiry; and

(iii) no Soliciting Dealer that participated in the inquiry is an affiliate of the Company.

Prior to the sale of the Certificates, each Soliciting Dealer shall inform the prospective purchaser of all pertinent facts relating to the liquidity and marketability of the Certificates during the term of the investment.

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If the foregoing is in accordance with your understanding, please sign and return the attached duplicate. Your indicated acceptance thereof shall constitute a binding agreement between you and us.

Very truly yours,

AMERICAN INVESTORS GROUP, INC.

                                                                            By _____________________________

                                                                                   Philip J. Myers

      Its President

Dated: _______________________

We confirm our agreement to act as a Soliciting Dealer pursuant to all the terms and conditions of the above Soliciting Dealer Agreement and the attached Distribution Agreement. We hereby represent that we will comply with the applicable requirements of the Act and the Exchange Act and the published Rules and Regulations of the Commission thereunder, and applicable blue sky or other state securities Laws. We confirm that we are a member in good standing of the FINRA. We hereby represent that we will comply with the FINRA rules and all rules and regulations promulgated by the FINRA.

Dated: _______________________                      ____________________________________________

Name of Soliciting Dealer

Address of Soliciting Dealer

Federal Tax Identification Number

By: _________________________________

         Authorized Signature

Title:________________________________

Kindly have checks representing commissions forwarded as follows (if different than above):

Name of Firm: ___________________________________

Address:      ___________________________________

                        ___________________________________

Telephone:        ___________________________________

Attention:          ___________________________________

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EX-4.1

EXHIBIT 4.1

INDENTURE

AMERICAN CHURCH MORTGAGE COMPANY, as obligor

Series E Secured Investor Certificates

$10,000,000

HERRING BANK, as trustee

Dated as of September __, 2017

TABLE OF CONTENTS

CROSS-REFERENCE TABLE	iv
ARTICLE I.   DEFINITIONS AND INCORPORATION BY REFERENCE		1
Section 1.1   Definitions		1
Section 1.2   Other Definitions		4
Section 1.3   Incorporation by Reference of Trust Indenture Act		4
Section 1.4   Rules of Construction		5
ARTICLE II.   THE SECURITIES		5
Section 2.1   Unlimited Amount; Accounts; Interest; Maturity		5
Section 2.2   Transaction Statement; Rescission		6
Section 2.3   Registrar and Paying Agent		6
Section 2.4   Deposit of Principal and Interest With Paying Agent		6
Section 2.5   List of Holders		7
Section 2.6   Transfer and Exchange		7
Section 2.7   Payment of Principal and Interest; Principal and Interest Rights Preserved		7
Section 2.8   Reserved		8
Section 2.9   Outstanding Securities		8
Section 2.10   Treasury Securities		9
Section 2.11   Reserved		9
Section 2.12   Reserved		9
Section 2.13   Defaulted Interest		9
Section 2.14   Book-Entry Registration		9
Section 2.15   Initial and Periodic Statements		10
ARTICLE III.   REDEMPTION		10
Section 3.1   Redemption of Securities at the Company's Election		10
Section 3.2   Redemption of Securities at the Holder's Election		11
Section 3.3   Offer to Redeem Securities Upon Change of the Company's Advisor.		11
ARTICLE IV.   COVENANTS		12
Section 4.1   Payment of Securities		12
Section 4.2   Maintenance of Office or Agency		12
Section 4.3   SEC Reports and Other Reports		13
Section 4.4   Compliance Certificate		13
Section 4.5   Stay, Extension and Usury Laws		14
Section 4.6   Liquidation		14
Section 4.7   Financial Covenants		14
Section 4.8   Restrictions on Dividends and Certain Transactions with Affiliates		14
Section 4.9   Collateral		15
Section 4.10   Appointment as Attorney-in-Fact.		16
ARTICLE V.   SUCCESSORS		18
Section 5.1   When the Company May Merge, etc.		18
Section 5.2   Successor Corporation Substituted		18
ARTICLE VI.   DEFAULTS AND REMEDIES		19
Section 6.1   Events of Default		19
Section 6.2   Acceleration		20
Section 6.3   Other Remedies		20
Section 6.4   Waiver of Past Defaults		21
Section 6.5   Control by Majority		21
Section 6.6   Limitation on Suits		21
Section 6.7   Rights of Holders to Receive Payment		21
Section 6.8   Collection Suit by Trustee		22
Section 6.9   Trustee May File Proofs of Claim		22
Section 6.10   Priorities		22
Section 6.11   Undertaking for Costs		23
ARTICLE VII.   TRUSTEE		23
Section 7.1   Duties of Trustee		23
Section 7.2   Rights of Trustee		24
Section 7.3   Individual Rights of Trustee		25
Section 7.4   Trustee's Disclaimer		25
Section 7.5   Notice of Defaults		25
Section 7.6   Reports by Trustee to Holders		25
Section 7.7   Compensation and Indemnity		26
Section 7.8   Replacement of Trustee		27
Section 7.9   Successor Trustee by Merger, etc.		27
Section 7.10   Eligibility; Disqualification		28
Section 7.11   Preferential Collection of Claims Against Company		28
ARTICLE VIII.   DISCHARGE OF INDENTURE		28
Section 8.1   Termination of Company's Obligations		28
Section 8.2   Application of Trust Money		29
Section 8.3   Repayment to Company		29
Section 8.4   Reinstatement		30
ARTICLE IX.   AMENDMENTS		30
Section 9.1   Without Consent of Holders		30
Section 9.2   With Consent of Holders		30
Section 9.3   Compliance with Trust Indenture Act		31
Section 9.4   Revocation and Effect of Consents		31
Section 9.5   Notation on or Exchange of Securities		31
Section 9.6   Trustee to Sign Amendments, etc.		31
ARTICLE X.   MISCELLANEOUS		32
Section 10.1   Trust Indenture Act Controls		32

Section 10.2   Notices	32
Section 10.3   Communication by Holders with Other Holders	33
Section 10.4   Certificate and Opinion as to Conditions Precedent	33
Section 10.5   Statements Required in Certificate or Opinion	33
Section 10.6   Rules by Trustee and Agents.	33
Section 10.7   Legal Holidays	34
Section 10.8   No Recourse Against Others	34
Section 10.9   Duplicate Originals	34
Section 10.10   Governing Law	34
Section 10.11   No Adverse Interpretation of Other Agreements	34
Section 10.12   Successors	34
Section 10.13   Severability	34
Section 10.14   Counterpart Originals	34
Section 10.15   Table of Contents, Headings, etc.	35
SIGNATURES	36

CROSS-REFERENCE TABLE

*Trust Indenture Act                                                                                                Section Indenture Section

310(a)(1)................................................................................................................................................7.10

(a)(2) .....................................................................................................................................................7.10

(a)(3) .....................................................................................................................................................N.A.

(a)(4)..................................................................................................................................................... N.A.

(a)(5)..................................................................................................................................................... N.A.

(b) ..................................................................................................................................................7.8; 7.10

(c)......................................................................................................................................................... N.A.

311(a)................................................................................................................................................... 7.11

(b) .........................................................................................................................................................7.11

(c)......................................................................................................................................................... N.A.

312(a) ....................................................................................................................................................2.5

(b)........................................................................................................................................................ 11.3

(c)........................................................................................................................................................ 11.3

313(a).................................................................................................................................................... 7.6

(b)(1) ....................................................................................................................................................N.A.

(b)(2)..................................................................................................................................................... 7.6

(c)..................................................................................................................................................7.6; 11.2

(d) ..........................................................................................................................................................7.6

314(a) ....................................................................................................................................4.3; 4.4; 11.2

(b)...................................................................................................................................................... 4.9(c)

(c)(1) ...................................................................................................................................................11.4

(c)(2)................................................................................................................................................... 11.4

(c)(3)................................................................................................................................................... N.A.

(d)....................................................................................................................................................... N.A.

(e) .......................................................................................................................................................11.5

(f)........................................................................................................................................................ N.A.

315(a)................................................................................................................................................ 7.1(b)

(b)................................................................................................................................................ 7.5; 11.2

(c)...................................................................................................................................................... 7.1(a)

(d) ......................................................................................................................................................7.1(c)

(e)....................................................................................................................................................... 6.11

316(a)(last sentence)........................................................................................................................... 2.10

(a)(1)(A).............................................................................................................................................. 6.5

(a)(1)(B).............................................................................................................................................. 6.4

(a)(2) ..................................................................................................................................................N.A.

(b)....................................................................................................................................................... 6.7

(c)...................................................................................................................................................... N.A.

317(a)(1)............................................................................................................................................ 6.8

(a)(2) ..................................................................................................................................................6.9

(b) ......................................................................................................................................................2.4

318(a) ..............................................................................................................................................11.1

N.A. means not applicable

* This Cross Reference Table is not part of the Indenture

THIS INDENTURE is hereby entered into as of September __, 2017, by and between American Church Mortgage Company, a Minnesota corporation (the "Company"), and Herring Bank, as trustee (the "Trustee").

The Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Series E Secured Investor Certificates of the Company issued pursuant to the Company's registration statement on Form S-11 (Reg. No._________) declared effective by the Securities and Exchange Commission on September __, 2017 (the "Registration Statement"):

ARTICLE I.  

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1Definitions.

"Account" means the record of beneficial ownership of a Security maintained by the Registrar.

"Advisor" means Church Loan Advisors, Inc., the Company's advisor.

"Advisory Agreement" means the Company's advisory agreement with the Advisor pursuant to which the Advisor manages the business and affairs of the Company, as the same has been or may be amended from time to time.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

"Agent" means any Registrar, Paying Agent or co-registrar of the Securities.

"Board of Directors" means the Board of Directors of the Company or any authorized committee of the Board of Directors.

"Business Day" means any day other than a Legal Holiday.

"Company" means American Church Mortgage Company, unless and until replaced by a successor in accordance with Article V hereof and thereafter means such successor.

"Corporate Trust Office" means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is originally dated, located at 1608 S. Polk St., Amarillo, Texas 79102, Attention: Catana Gray, Vice-President.

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"Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fiscal Year" means initially a December 31 year end.

"GAAP" means, as of any date, generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession, which are in effect from time to time.

"Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness.

"Holder" means a Person in whose name a Security is registered.

"Indebtedness" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or representing the balance deferred and unpaid of the purchase price of any property (including capital Lease obligations) or representing any hedging obligations, except any such balance that constitutes an accrued expense or a trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and hedging obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and also includes, to the extent not otherwise included, (a) the Guarantee of items that would be included within this definition, and (b) liability for items that would arise by operation of a Person's status as a general partner of a partnership.

"Indenture" means, this Indenture as amended or supplemented from time to time.

"Interest Accrual Period" means, as to each Security, the period from the later of the Issue Date of such Security or the day after the last Payment Date upon which an interest payment was made until the following Payment Date during which interest accrues on each Security with respect to any Payment Date.

"Issue Date" means, with respect to any Security, the date on which such Security is deemed registered on the books and records of the Registrar, which shall be the date the Company accepts funds for the purchase of the Security if such funds are received prior to 12:01 p.m. (Central Time) on a Business Day, or if such funds are received after such time, on the next Business Day.

"Maturity Date" means, with respect to any Security, the date on which the principal of such Security becomes due and payable as therein provided.

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"Maturity Record Date" means, with respect to any Security, as of 11:59 p.m. on the date fifteen (15) days prior to the Maturity Date or Redemption Date applicable to such Security.

"Obligations" means any principal, interest (including Post-Petition Interest), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

"Officer" means the Chairman of the Board or principal executive officer of the Company, the President or operating officer of the Company, the Chief Financial Officer or principal financial officer of the Company, the Treasurer, any Assistant Treasurer, Controller or principal officer of the Company, Secretary or any Vice-President of the Company.

"Officer's Certificate" means a certificate signed by an Officer.

"Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.

"Payment Date" means the last day of each calendar quarter, or if such day is not a Business Day, the Business Day immediately following such day and, with respect to a specific Security, the Maturity Date or Redemption Date of such Security.

"Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

"Post-Petition Interest" means interest accruing after the commencement of any bankruptcy or insolvency case or proceeding with respect to the Company or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, at the rate applicable to such Indebtedness, whether or not such interest is an allowable claim in any such proceeding.

"Prospectus" means the prospectus relating to the Securities, including any prospectus supplement, forming part of the Registration Statement.

"Redemption Date" has the meaning given in Article III hereof.

"Redemption Price" means, with respect to any Security to be redeemed, the principal amount of such Security plus the interest accrued but unpaid during the Interest Accrual Period up to the Redemption Date for such security.

"Regular Record Date" means, with respect to each Payment Date, as of 11:59 p.m. on the date fifteen (15) days prior to such Payment Date.

"Responsible Officer" when used with respect to the Trustee, means any officer in its Corporate Trust Office, or any other assistant officer of the Trustee in its Corporate Trust Office customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject.

3

"SEC" means the U.S. Securities and Exchange Commission.

"Security" or "Securities" means, the Company's Series E Secured Investor Certificates issued under this Indenture pursuant to the Registration Statement.

"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA.

"Trustee" means Herring Bank, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

"U.S. Government Obligations" means direct obligations of the United States of America, or any agency or instrumentality thereof for the payment of which the full faith and credit of the United States of America is pledged.

Section 1.2Other Definitions.

Term Defined in Section

"Bankruptcy Law" 6.1

"Collateral" 4.9(a)

"Custodian" 6.1

"Event of Default" 6.1

"Legal Holiday" 10.7

"Paying Agent" 2.3

"Registrar" 2.3

"Registration Statement" Introduction

"Securities Register" 2.3

"Transfer" 4.9(h)

Section 1.3Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

"indenture securities" means the Securities;

"indenture security holder" means any Holder of the Securities;

"indenture to be qualified" means this Indenture;

"indenture trustee" or "institutional trustee" means the Trustee;

"obligor" on the Securities means the Company or any successor obligor upon the Securities.

4

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.4Rules of Construction.

Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) references to GAAP, as of any date, shall mean GAAP in effect in the United States as of such date and consistently applied; (d) "or" is not exclusive; (e) words in the singular include the plural, and in the plural include the singular; and (f) provisions apply to successive events and transactions.

ARTICLE II.  

THE SECURITIES

Section 2.1Unlimited Amount; Accounts; Interest; Maturity.

(a)The outstanding aggregate principal amount of Securities outstanding at any time is limited to $10,000,000, provided, however, that the Company and the Trustee may, without the consent of any Holder, increase such aggregate principal amount of Securities which may be outstanding at any time. The Securities may be subject to notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject or usage.

(b)Except as provided in Section 2.14 hereof, each Security shall not be evidenced by a promissory note. The record of beneficial ownership of the Securities shall be maintained and updated by the Registrar through the establishment and maintenance of Accounts. Initially, each Security shall be in such denominations as may be designated from time to time by the Company. Each Security shall have a term of four (4), five (5), six (6) or seven (7) years or a term of not less than thirteen (13) years and not greater than twenty (20) years as shall be designated by the Holder at the time of purchase, subject to the Company's acceptance thereof.

(c)Each Security shall bear interest from and commencing on its Issue Date at such rate of interest as the Company shall determine from time to time, as set forth in the Prospectus. The interest rate of each Security will be fixed for the term of such Security upon issuance, subject to change upon the renewal of the Security at maturity. Interest on the Securities will not compound. The Company shall pay the Holders interest on the Securities quarterly on the last day of each quarter during which each such Security is outstanding. To the extent any applicable interest payment date is not a Business Day, then interest shall be paid instead on the next succeeding Business Day.

(d)The Company will give each Holder of a Security a written notice approximately thirty (30) but not less than ten (10) days prior to the Maturity Date of the Security held by such Holder reminding such Holder of the Maturity Date of the Security. If the Company is offering renewal of Securities, the Company will provide such Holder with a schedule of interest rates then in effect and a form for the Holder to use to notify the Company whether the Holder wishes to renew the Security. To be effective, a notice of renewal must be returned to the Company (or

5

its agent) not later than the Maturity Date of the maturing Security. Unless a Security is properly renewed, no interest will accrue after the Maturity Date for such Security. If a Security is not renewed, the Company shall pay the Holder the principal amount on the maturing Security, together with accrued but unpaid interest thereon, within ten (10) days after the Maturity Date.

(e)If the Company is offering renewal of Securities and a Holder renews a Security, then interest shall continue to accrue from the first day of such renewal term at the applicable rate then in effect. Such Security, as renewed, will continue in all its provisions, including provisions relating to payment.

(f)The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, and the Holders by accepting the Securities, expressly agree to such terms and provisions and to be bound thereby. In case of a conflict, the provisions of this Indenture shall control.

Section 2.2Transaction Statement; Rescission.

(a)A Security shall not be validly issued until a written confirmation of the acceptance of a Subscription in the form of a transaction statement executed by a duly authorized officer or agent of the Company is sent to the purchaser thereof and an Account is established by the Registrar in the name of such purchaser or transferee.

(b)For a period of five (5) days following delivery of a Prospectus to a Holder in regard to issuance of a Security at the time of original purchase, but not upon transfer, the Holder shall have the right to rescind the Security and receive payment of the principal by presenting a written request to the Company. Payment of the principal shall be made within ten (10) days of the Company's receipt of such request from the Holder. No interest shall be paid on any such rescinded Security.

Section 2.3Registrar and Paying Agent.

The Trustee shall maintain (i) an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar") and (ii) an office or agency where Securities may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange, which shall include the name, address for notices and payment of principal and interest to the Holder, principal amount and interest rate for each Security, and such other information as the Company shall request that the Registrar maintain with regard to Holders or the Securities (the "Securities Register"). The Registrar shall not be required to maintain any records beyond those (i) specifically required by the terms of this Indenture, (ii) reasonably requested in writing by the Company and (iii) and as are or become required to be maintained by applicable law.

Section 2.4Deposit of Principal and Interest With Paying Agent.

Prior to each Payment Date, the Company shall deposit with the Paying Agent sufficient funds to pay principal and interest then becoming due and payable in cash.

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Section 2.5List of Holders.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA ss.312(a). If the Trustee is not the Registrar, the Registrar shall furnish to the Trustee each quarter during the term of this Indenture and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names, addresses and Account balances of Holders, and the aggregate principal amount outstanding and the Company shall otherwise comply with TIA ss.312(a).

Section 2.6Transfer and Exchange.

(a)The Securities are not negotiable instruments and cannot be transferred without the prior written consent of the Company. Requests to the Registrar for the transfer of any Account maintained for the benefit of a Holder shall be:

(1)made to the Company in writing on a form supplied by the Company;

(2)duly executed by the current holder of the Account, as reflected on the Registrar's records as of the date of receipt of such transfer request, or his attorney duly authorized in writing;

(3)accompanied by the written consent of the Company to the transfer; and

(4)if requested by the Company, an opinion of Holder's counsel (which counsel shall be reasonably acceptable to the Company) that the transfer does not violate any applicable securities laws and/or a signature guarantee.

(b)Upon transfer of a Security, the Company will provide the new registered owner of the Security with a transaction statement which will evidence the transfer of the Account in the Securities Register.

(c)The Company or the Trustee may assess service charges to a Holder for any registration or transfer or exchange, and the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange pursuant to Section 9.5 hereof).

(d)The Company shall treat the individual or entity listed on each Account maintained by the Registrar as the absolute owner of the Security represented thereby for purposes of receiving payments thereon and for all other purposes whatsoever.

Section 2.7Payment of Principal and Interest; Principal and Interest Rights Preserved.

(a)Each Security shall accrue interest at the rate specified for such Security in the Securities Register and such interest shall be payable on each Payment Date following the Issue Date for such Security, until the principal thereof has been paid. Any installment of interest payable on a Security that is caused to be punctually paid or duly provided for by the Company

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on the applicable Payment Date shall be paid by the Paying Agent to the Holder in whose name such Security is registered in the Securities Register on the applicable Regular Record Date with respect to the Securities outstanding, by the Paying Agent mailing a check for the amount of such interest payment to the Holder's address as it appears in the Securities Register on such Regular Record Date. The Paying Agent shall not be required to make any payment or partial payment of principal if the Paying Agent does not have funds on deposit and received from the Company in an amount sufficient to pay Holders amounts due to them on a Payment Date, but shall make full payments of interest to the extent that sufficient funds are on deposit to make such payments. Any installment of interest not punctually paid or duly provided for shall be payable in the manner and to the Holders as specified in Section 2.13 hereof.

(b)Each of the Securities shall have stated maturities of principal as shall be indicated on such Securities and as set forth in the Securities Register. The principal of each Security and any accrued but unpaid interest thereon shall be paid in full no later than five (5) days following the Maturity Date thereof unless the term of such Security is extended pursuant to Section 2.1 hereof or such Security becomes due and payable at an earlier date by acceleration, redemption or otherwise. Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Securities, if the Securities have become or been declared due and payable following an Event of Default, then payments of principal of and interest on the Securities shall be made in accordance with Article 6 hereof.

(c)All computations of interest due with respect to any Security shall be made, unless otherwise specified in the Security, based upon a 365 day year.

(d)In the event that any check mailed to a Holder for the purpose of payment of principal or interest is returned to the Paying Agent for want of an accurate address or is not presented for payment, the funds represented thereby shall be held and disbursed as provided in Section 8.3 hereof.

(e)The Company or the Trustee may withhold from any payment of interest amounts required by the Internal Revenue Service or other taxing authority to be so withheld, including, without limitation, upon the failure of any Holder to provide the Company or the Trustee with his or her tax identification number.

Section 2.8Reserved.

Section 2.9Outstanding Securities.

(a)The Securities outstanding at any time are the outstanding balances of all Accounts representing the Securities maintained by the Company or such other entity as the Company designated as Registrar.

(b)If the principal amount of any Security is considered paid under Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.

(c)Subject to Section 2.10 hereof, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.

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Section 2.10Treasury Securities.

In determining whether the holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or any Affiliate of the Company shall be considered as though not outstanding, except that for purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities that a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.

Section 2.11Reserved.

Section 2.12Reserved.

Section 2.13Defaulted Interest.

If the Company defaults in a payment of interest or principal on any Security, it shall pay the defaulted interest or principal plus, to the extent lawful, any interest payable thereon at the rate provided in the Security, to the Holder of such Security as of a subsequent special record date, which date shall be at the earliest practicable date, but in all events within fifteen (15) days following the scheduled Payment Date of the defaulted interest. The Company shall, with written notification to the Trustee, fix or cause to be fixed each such special record date and payment date. Prior to any such special record date, the Company (or the Trustee, in the name of and at the expense of the Company) shall mail to Holder(s) a notice that states the special record date, the related payment date and the amount of principal, interest and additional accrued interest to be paid.

Section 2.14Book-Entry Registration.

(a)The Registrar shall maintain a book-entry registration and transfer system through the establishment of Accounts for the benefit of Holders of Securities as the sole method of recording the ownership and transfer of ownership interests in such Securities. The registered owners of the Accounts established by the Registrar in connection with the purchase or transfer of the Securities shall be deemed to be the Holders of the Securities outstanding for all purposes under this Indenture. The Company shall promptly notify (or cause an agent to notify) the Registrar of the acceptance of a subscriber's order to purchase a Security and the Registrar shall credit its book-entry registration and transfer system to the Account of each Security purchaser, the principal amount of such Security owned of record by the purchaser.

(b)Book-entry accounts representing interests in the Securities shall not be exchangeable for Securities fully registered in the names of the Holders thereof unless (a) the Company at its option advises the Trustee in writing of its election to terminate the book-entry system, or (b) after the occurrence of any Event of Default, Holders of a majority of the Securities then outstanding (as determined based upon the latest statement provided to the Trustee pursuant to Section 4.3(d) hereof) advise the Trustee in writing that the continuation of the book-entry system is no longer in the best interests of such Holders and the Trustee notifies all Holders of the Securities, as the case may be, of such event and the availability of definitive notes to the Holders of Securities, as the case may be, requesting such notes in definitive form.

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(c)The Registrar shall issue fully registered Securities if required by the administrator of an Individual Retirement Account or similar tax deferred account in which the Holder has acquired Securities. The Registrar may charge a Holder a $10 fee per Securities issuance.

Section 2.15Initial and Periodic Statements.

(a)The Trustee shall provide an initial book entry acknowledgement to initial purchasers and registered owners, within thirty (30) business days of the purchase, transfer or pledge of a Security.

(b)The Trustee shall send each Holder of a Security (and each registered pledgee) via U.S. mail not later than ninety (90) Business Days after each year end in which such Holder had an outstanding balance in such holder's Account, a statement which indicates as of the year end preceding the mailing: (i) the balance of such Account; (ii) interest credited; (iii) withdrawals made, if any; (iv) the interest rate payable on such Security; and (v) any other information required on IRS Form 1099. The Trustee or the Company shall provide additional statements as the Holders of the Securities may reasonably request from time to time. The Company or the Trustee may charge such Holders requesting such statements a fee to cover the charges incurred by the Company or the Trustee in providing such additional statements.

ARTICLE III.  

REDEMPTION

Section 3.1Redemption of Securities at the Company's Election.

(a)At any time and from time to time, the Company, in its sole discretion, may redeem any number or all of the Securities by providing thirty (30) days’ written notice to the Holders thereof. The Company may redeem any or all of the Securities pursuant to this paragraph and need not redeem the Securities on a pro rata or other basis. The Company shall provide the Holders of any Securities to be redeemed pursuant to this paragraph with notice thereof, which notice shall set forth the date for such redemption (the "Redemption Date") and set forth the Redemption Price for the Securities to be redeemed. Each such notice shall also include the amount of interest and principal to be paid to the Holder on the Redemption Date. No interest shall accrue on a Security to be redeemed under this Section 3.1 for any period of time after the Redemption Date for such Security, provided that the Company has timely tendered the Redemption Price to the Holder.

(b)The Company shall have no mandatory redemption or sinking fund obligations with respect to any of the Securities.

(c)In its sole discretion, the Company may offer certain Holders the ability to extend the maturity of an existing Security through the redemption of the current Security and the issuance of a new Security. This redemption option shall not be subject to the thirty (30) day notice of redemption described in this section.

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Section 3.2Redemption of Securities at the Holder's Election.

(a)Subject to paragraph (b) below, within forty-five (45) days of the death of a Holder who is a natural person, the personal representative of the estate of such Holder may require the Company to redeem, in whole and not in part, without penalty, the Security held by such Holder, by delivering to the Company a certified copy of the Holder's death certificate and an irrevocable written election (a "Redemption Election") requiring the Company to make such redemption. In the event a Security is held jointly by two or more natural persons (including, without limitation, joint owners that are not legally married), the Company shall redeem such Security upon proper notice if either of joint Holders of such Security has died. If the Security is held by a Holder who is not a natural person, such as a trust, partnership, corporation or other similar entity, the right of redemption upon death does not apply, except in the case of the death of a natural person who is the beneficial owner of Securities held of record in an individual retirement account.

(b)The Company will not be required to redeem Securities pursuant to Redemption Elections received pursuant to paragraph (a) above to the extent that such redemptions exceed $25,000 in the aggregate for all holders in any calendar quarter. For the purposes of such limit on aggregate Redemption Elections, Redemption Elections will be honored in the order received, and any Redemption Election not paid in the quarter received due to this limitation will be honored in the subsequent quarter, to the extent possible, as such limit on aggregate Redemption Elections will also apply to the subsequent quarter.

(c)Subject to Section 3.2(b), upon receipt of a Redemption Election pursuant to Section 3.2(a), the Company shall designate the Redemption Date for the Security to be redeemed, which Redemption Date shall be no more than ten (10) days after the Company's receipt of the Redemption Election, and shall pay the Redemption Price to the estate of the Holder in accordance with the provisions set forth in Section 2.7 hereof. No interest shall accrue on a Security to be redeemed under this Section 3.2 for any period of time after the Redemption Date for such Security, provided that the Company has timely tendered the Redemption Price to the estate of the Holder. Securities for which redemption is delayed pursuant to Section 3.2(b) will continue to accrue interest until the Company establishes a Redemption Date therefor and the Security is redeemed.

(d)The Company may at its option and in its sole discretion and from time to time accept for redemption Securities tendered to it by Holders and may impose such conditions thereon as it deems appropriate, including an early redemption penalty with regard thereto.

Section 3.3Offer to Redeem Securities Upon Change of the Company's Advisor.

(a)If the Company terminates the Advisory Agreement for any reason, the Company shall provide all Holders with a notice thereof within ten (10) days of such termination, pursuant to which the Company shall offer to redeem all of the Securities outstanding as of the date of the termination of the Advisory Agreement. Each Holder shall have thirty (30) days from the date of such notice to provide the Company with a Redemption Election with regard to the Securities owned by such Holder, upon timely receipt of which the Company shall become bound to

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redeem the electing Holder's Securities. This Section 3.3 shall not apply in the case that the Advisor terminates or elects not to renew the Advisory Agreement.

(b)Upon receipt of a Redemption Election pursuant to Section 3.3(a), the Company shall designate the Redemption Date for each Security to be redeemed, which Redemption Date shall be no more than ten (10) days after the Company's receipt of the Redemption Election, and shall pay the Redemption Price to the Holder in accordance with the provisions set forth in Section 2.7 hereof. No interest shall accrue on a Security to be redeemed under this Section 3.3 for any period of time after the Redemption Date for such Security, provided that the Company has timely tendered the Redemption Price to the Holder.

ARTICLE IV.  

COVENANTS

Section 4.1Payment of Securities.

(a)Principal and interest (to the extent such interest is paid in cash) shall be considered paid on the date due if the Paying Agent, if other than the Company, holds at least one Business Day before that date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal and interest then due. Such Paying Agent shall return to the Company, no later than five (5) days following the date of payment, any money (including accrued interest) that exceeds such amount of principal and interest paid on the Securities in accordance with this Section 4. 1.

(b)To the extent lawful, the Company shall pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate borne by the Securities; it shall pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate.

Section 4.2Maintenance of Office or Agency.

(a)The Company will maintain an office or agency (which may be an office of the Trustee) where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

(b)The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

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(c)The Company hereby designates its office as one such office of the Company.

Section 4.3SEC Reports and Other Reports.

(a)The Company shall file with the Trustee, within fifteen (15) days after filing with the SEC, copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Company is required to file with the SEC pursuant to Sections 13 or 15(d) of the Exchange Act. If the Company is not subject to the requirements of such Sections 13 or 15(d) of the Exchange Act, the Company shall continue to file with the SEC and the Trustee on the same timely basis such reports, information and other documents as it would file if it were subject to the requirements of Sections 13 or 15(d) of the Exchange Act. The Company shall also comply with the provisions of TIAss.314(a). Notwithstanding anything contrary herein, the Trustee shall have no duty to review such documents for purposes of determining compliance with any provisions of the Indenture.

(b)Upon the request of any Holder, the Company shall provide such Holder with a copy of the Company's annual report on Form 10-K or quarterly reports on Form 10-Q without charge. The Company will not be required to provide Holders with any other reports or financial information or to provide reports to Holders absent a specific request therefor.

Section 4.4Compliance Certificate.

(a)The Company shall deliver to the Trustee, within one hundred twenty (120) days after the end of each Fiscal Year, an Officer's Certificate stating that a review of the activities of the Company during the preceding fiscal year has been made under the supervision of the signing Officer(s) with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities are prohibited or if such event has occurred, a description of the event and what action each is taking or proposes to take with respect thereto. The foregoing Officer's Certificate shall state whether the promissory notes constituting part of the Collateral are valid and binding obligations of the obligor thereof and whether any such promissory note has experienced an event of default thereon during the period covered by the Officer's Certificate.

(b)The Company will, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officer's Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

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Section 4.5Stay, Extension and Usury Laws.

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture. The Company (to the extent that it may lawfully do so) hereby expressly waives all beneficial advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.6Liquidation.

Neither the Board of Directors nor the shareholders of the Company shall adopt a plan of liquidation that provides for, contemplates or the effectuation of which is preceded by (a) the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company otherwise than substantially as an entirety (Section 5.1 of this Indenture being the Section hereof which governs any such sale, lease, conveyance or other disposition substantially as an entirety) and (b) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and of the remaining assets of the Company to the holders of capital stock of the Company, unless the Company, prior to making any liquidating distribution pursuant to such plan, makes provision for the satisfaction of the Company's Obligations hereunder and under the Securities as to the payment of principal and interest.

Section 4.7Financial Covenants

The Company covenants that, so long as any of the Securities are outstanding: (i) the Company will maintain a positive net worth, which includes all equity held by the Company's common and preferred shareholders and the Company's subordinated debt, and (ii) the Company's long term liabilities will not exceed three hundred percent of the Company's shareholders' equity at the end of any fiscal year, or such higher amount as authorized by the Bylaws from time to time.

Section 4.8Restrictions on Dividends and Certain Transactions with Affiliates

(a)The Company covenants that, so long as any of the Securities are outstanding, it shall not declare or pay any dividends or other payments of cash or other property to its common or preferred shareholders unless no Default or Event of Default with respect to the Securities then exists or would exist immediately following the declaration or payment of such dividend or other payment.

(b)The Company covenants that, so long as any of the Securities are outstanding, it shall not guarantee, endorse or otherwise become liable for any obligations of any of the Company's Affiliates.

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Section 4.9Collateral

(a)The Company shall from time to time assign, deliver and pledge to the Trustee, as security for the payment of principal and interest on the Securities, mortgage-secured promissory notes or debt securities (including, but not limited to church bonds) issued by churches and other nonprofit religious organizations evidencing loans or investments made by the Company, or cash or cash equivalents, which at all times shall have an aggregate unpaid principal balance of at least 100% of the outstanding principal amount of the Securities (the "Collateral"). Except as described in Section 4.9(g), the Company will not be obligated to assign the mortgages securing the Collateral to the Trustee. If any of the promissory notes or debt securities constituting part of the Collateral shall be in default for in excess of ninety (90) days, the Company shall provide replacement Collateral for such promissory note or debt security sufficient to maintain such 100% coverage without regard to such defaulted promissory note or debt security. The Company shall deliver to the Trustee such documents as the Trustee deems necessary to create a perfected first lien security interest in the Collateral under the applicable provisions of the Uniform Commercial Code. If an Event of Default has occurred, the Company shall deliver to the Trustee such documents as the Trustee deems necessary to enable the Trustee to exercise its remedies with regard to the Collateral, including those necessary for the Trustee to obtain direct payments under the pledged promissory notes and church bonds or to sell or transfer such promissory notes and church bonds to third parties.

(b)At any time and from time to time, upon the written request of the Trustee, and at the sole expense of the Company, the Company will promptly and duly execute and deliver, or will promptly cause to be executed or delivered, such further instruments and documents and take such further action as the Trustee may reasonably request for the purpose of obtaining or preserving the full benefits of Collateral, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction. The Company also hereby authorizes the Trustee to file any such financing or continuation statement without the signature of the Company to the extent permitted by applicable law.

(c)The Company shall furnish the following to the Trustee in connection with its pledge of the Collateral to the Trustee:

(1)Upon delivery of Collateral, an Opinion of Counsel to the effect that all necessary action has been taken to create and perfect a first lien and security interest in favor of the Trustee in the pledged promissory notes, debt securities, cash or cash equivalents.

(2)A UCC-1 financing statement or equivalent recordable form.

(3)At least annually, an Opinion of Counsel to the effect that all necessary action has been taken to maintain a first lien and security interest in favor of the Trustee in the pledged promissory notes or stating that no such action is necessary.

(d)In connection with any release or substitution of Collateral assigned to the Trustee under Section 4.9(a), the Company will, subject to Section 4.9(e), deliver to the Trustee the certificate or opinion, if any, required by Section 314(d) of the Trust Indenture Act as to the fair value of any Collateral to be released, dated as of a date not more than sixty (60) calendar days prior to the date of release.

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(e)Notwithstanding anything contained in this Indenture to the contrary, the provisions of 4.9(d) will not be applicable to any release or substitution of Collateral provided that the release and substitution was performed in or a result of changes in the Company's properties arising in the ordinary course of the Company's business and the aggregate unpaid principal balance of the Collateral after the release or substitution and giving effect to additional Collateral assigned to the Trustee contemporaneously therewith was at least 100% of the outstanding principal amount of the Securities. The Company will deliver to the Trustee semi-annually an Officer's Certificate certifying that all releases and substitutions of Collateral pursuant to this provision during the immediately proceeding six months were in compliance with this subsection.

(f)The Company shall not change its name or corporate structure or change the jurisdiction under which it is incorporated or organized without first giving the Trustee at least thirty (30) days prior written notice thereof and shall have delivered to the Trustee all Uniform Commercial Code financing statements and amendments thereto as the Trustee shall request and taken all other actions deemed necessary by the Trustee to continue its perfected status in the Collateral with same or better priority.

(g)Upon the request of the Trustee where there is a continuing Event of Default, the Company shall assign to the Trustee such mortgages securing the promissory notes constituting part of Collateral as are identified by the Trustee, in its discretion.

(h)The Company covenants that, so long as any of the Securities are outstanding, the Company will not Transfer any part of the Collateral. For purposes of this subsection, the term "Transfer" means a sale, assignment, transfer or other disposition (whether voluntary or by operation of law) of, or the granting or creating of a lien, encumbrance or security interest in, any of the Collateral; provided, that the term "Transfer" does not include (i) a sale or disposition of any of the Collateral which is contemporaneously replaced by other promissory notes, or debt securities, or cash or cash equivalents that are otherwise eligible to constitute part of the Collateral and where the 100% Collateral coverage requirement is at all times met; or (ii) the creation of an involuntary lien against the Collateral that is released or discharged of record or otherwise remedied within sixty (60) days of creation.

Section 4.10Appointment as Attorney-in-Fact.

(a)The Company hereby irrevocably constitutes and appoints the Trustee and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Company and in the name of the Company or in its own name, from time to time in the Trustee's discretion, for the purpose of carrying out the terms of this Indenture relating to the Collateral, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Indenture as they relate to the Collateral and the Trustee's rights and powers with regard thereto; provided that Trustee hereby agrees that it shall not exercise its rights as attorney-in-fact unless an Event of Default shall have

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occurred. Without limiting the generality of the foregoing, the Company hereby gives the Trustee the power and right, on behalf of the Company, without assent by, but with notice to, the Company, if an Event of Default shall have occurred and be continuing, to do the following:

(1)in the name of the Company or its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any mortgage insurance or church bond or with respect to any other Collateral and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Trustee for the purpose of collecting any and all such moneys due under any such mortgage insurance or church bond or with respect to any other Collateral whenever payable;

(2)to pay or discharge taxes and liens levied or placed on or threatened against the Collateral;

(3)(A) to direct any party liable for any payment under any Collateral to make payment of any and all moneys due or to become due thereunder directly to the Trustee or as the Trustee shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any of the Collateral; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any thereof and to enforce any other right in respect of any Collateral; (E) to defend any suit, action or proceeding brought against the Company with respect to any Collateral; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Trustee may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Trustee were the absolute owner thereof for all purposes, and to do, at the Trustee's option and the Company's expense, at any time, and from time to time, all acts and things which the Trustee deems necessary to protect, preserve or realize upon the Collateral and the Trustee's liens thereon and to effect the intent of this Loan Agreement, all as fully and effectively as the Company might do; and

(4)to execute in the name and file on behalf of the Company assignments of mortgages securing the promissory notes constituting part of Collateral where there is a continuing Event of Default.

The Company hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

(b)The Company also authorizes the Trustee, at any time and from time to time, to execute any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

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(c)The powers conferred on the Trustee are solely to protect the Trustee's interests in the Collateral and shall not impose any duty upon the Trustee to exercise any such powers. The Trustee shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Trustee nor any of its officers, directors, or employees shall be responsible to the Company for any act or failure to act hereunder, except for its own gross negligence or willful misconduct.

ARTICLE V.  

SUCCESSORS

Section 5.1When the Company May Merge, etc.

(a)The Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to another corporation, Person or entity unless (i) the Company is the surviving corporation or the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made assumes all the obligations of the Company by execution and delivery of a supplemental indenture in a form reasonably satisfactory to the Trustee; and (iii) immediately after such transaction no Default or Event of Default exists.

(b)The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officer's Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture. The Trustee shall be entitled to conclusively rely upon such Officer's Certificate and Opinion of Counsel.

Section 5.2Successor Corporation Substituted.

Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.1, the successor corporation formed by such consolidation or into or with which the Company, is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person has been named as the Company herein; provided, however, that the Company shall not be released or discharged from the obligation to pay the principal of or interest on the Securities.

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ARTICLE VI.  

DEFAULTS AND REMEDIES

Section 6.1Events of Default.

An "Event of Default" occurs if:

(a)the Company defaults in the payment of interest on a Security when the same becomes due and payable and the Default continues for a period of thirty (30) days;

(b)the Company defaults in the payment of the principal of any Security when the same becomes due and payable at maturity, upon a required redemption or otherwise, and the Default continues for a period of thirty (30) days;

(c)the Company fails to observe or perform any covenant, condition or agreement on the part of the Company to be observed or performed pursuant to Section 4.6 or 5.1 hereof;

(d)the Company defaults in its obligations described in clause (b) or (c) of Section 4.9 and such default continues for a period of sixty (60) days;

(e)the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and the Default continues for the period and after the notice specified below;

(f)the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; (iv) makes a general assignment for the benefit of its creditors; or (v) admits in writing its inability to pay debts as the same become due; or

(g)a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case; (ii) appoints a Custodian of the Company or for all or substantially all of its property; (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for one hundred twenty (120) consecutive days.

The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

A Default under clause (e) of this Section 6.1 is not an Event of Default until the Trustee or the Holders of at least a majority in principal amount of the then outstanding Securities notify the Company of the Default and the Company does not cure the Default or such Default is not waived within thirty (30) days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default."

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Section 6.2Acceleration.

If an Event of Default (other than an Event of Default specified in clauses (f) or (g) of Section 6.1) occurs and is continuing, the Trustee by notice to the Company or the Holders of at least a majority in principal amount of the then outstanding Securities by written notice to the Company and the Trustee may declare the unpaid principal of and any accrued interest on all the Securities to be due and payable. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (f) or (g) of Section 6.1 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Trustee, or the Holders of a majority in principal amount of the then outstanding Securities by written notice to the Trustee, may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal or interest that has become due solely because of the acceleration) have been cured or waived.

Section 6.3Other Remedies.

(a)If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture, including, without limitations, all rights and remedies available to a secured party under the Uniform Commercial Code. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. Without limiting the generality of the foregoing, the Trustee without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Company or any other Person (each and all of which demands, presentments, protests, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels or as an entirety at public or private sale or sales, at any exchange, broker's board or office of the Trustee or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Trustee shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Company, which right or equity is hereby waived or released. The Company further agrees, at the Trustee's request, to assemble the Collateral and make it available to the Trustee at places which the Trustee shall reasonably select, whether at the Company's premises or elsewhere. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition.

(b)A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

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Section 6.4Waiver of Past Defaults.

The Trustee may waive any past Default or Event of Default without the consent of the Holders, provided that such Default is wholly cured. Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences, and a continuing Default or Event of Default in the payment of the principal of or interest on any Security held by a non-consenting Holder may also be waived upon the consent of the Holders of at least a majority of the principal amount of the then outstanding Securities. Upon actual receipt of any such notice of waiver by a Responsible Officer of the Trustee, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.5Control by Majority.

The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it, provided, that indemnification for the Trustee's fees and expenses, in a form reasonably satisfactory to the Trustee, shall have been provided. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may involve the Trustee in personal liability.

Section 6.6Limitation on Suits.

A Holder may pursue a remedy with respect to this Indenture or the Securities only if:

(a)the Holder gives to the Trustee written notice of a continuing Event of Default;

(b)the Holders of at least a majority in principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy;

(c)such Holder or Holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;

(d)the Trustee does not comply with the request within sixty (60) days after receipt of the request and the offer and, if requested, the provision of indemnity; and

(e)during such sixty (60) day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee a direction inconsistent with the request.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

Section 6.7Rights of Holders to Receive Payment.

Except as provided in this Indenture, the right of any Holder of a Security to receive payment of principal and interest on the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder.

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Section 6.8Collection Suit by Trustee.

If an Event of Default specified in Section 6.1(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid on the Securities and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.9Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor upon the Securities), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10Priorities.

If the Trustee collects any money pursuant to this Article, it shall, subject to the provisions of Article 10 hereof, pay out the money in the following order:

(a)First: to the Trustee, its agents and attorneys for amounts due under Section 7.7, including payment of all compensation, expenses and liabilities incurred, and all advances made, if any, by the Trustee and the costs and expenses of collection;

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(b)Second: to Holders for amounts due and unpaid on the Securities for principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal;

(c)Third: to Holders for amounts due and unpaid on the Securities interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for interest; and

(d)Fourth: to the Company or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders.

Section 6.11Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit by Holders of more than 10% in principal amount of the then outstanding Securities.

ARTICLE VII.  

TRUSTEE

Section 7.1Duties of Trustee.

(a)If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a reasonably prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(b)Except during the continuance of an Event of Default:

(1)The duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

(2)In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon resolutions, statements, reports, documents, orders, certificates, opinions or other instruments furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any of the above that are specifically required to be furnished to the Trustee pursuant to this Indenture, the Trustee shall examine them to determine whether they substantially conform to the requirements of this Indenture.

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(c)The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1)This paragraph does not limit the effect of paragraph 7.1(b)(2) of this Section.

(2)The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

(3)The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5.

(d)Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

(e)No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense.

(f)The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.2Rights of Trustee.

(a)The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented to it by the proper Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall have no duty to inquire as to the performance of the Issuers' covenants in Article 4. In addition, the Trustee shall not be deemed to have knowledge of any Default or any Event of Default except any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge.

(b)Before the Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer's Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c)The Trustee may act through agents, attorneys, custodians or nominees and shall not be responsible for the misconduct or negligence or the supervision of any agents, attorneys, custodians or nominees appointed by it with due care.

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(d)The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e)Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

(f)The Trustee shall not be deemed to have notice of an Event of Default for any purpose under this Indenture unless notified of such Event of Default by the Company or a Holder of the Securities.

Section 7.3Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of the Company with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11.

Section 7.4Trustee's Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities. It shall not be accountable for the Company's use of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof. It shall not be responsible for any statement or recital herein or any statement in the Securities or any other document in connection with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication.

Section 7.5Notice of Defaults.

If a Default or Event of Default occurs and is continuing and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders at their addresses as they appear in the Securities Register a notice of the Default or Event of Default within ninety (90) days after it occurs or first becomes known to the Trustee. At least five (5) Business Days prior to the mailing of any notice to Holders under this Section 7.5, the Trustee shall provide the Company with notice of its intent to mail such notice. Except in the case of a Default or Event of Default in payment on any Security, the Trustee may withhold the notice if and so long as the Responsible Officer of the Trustee in good faith determines that withholding the notice would have no material adverse effect on the Holders.

Section 7.6Reports by Trustee to Holders.

(a)Within sixty (60) days after December 31 of each calendar year, commencing December 31, 2017, the Trustee shall mail to Holders a brief report dated as of such reporting date that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the 12 months preceding the reporting date, no report need be prepared or transmitted). The Trustee also shall comply with TIA ss. 313(b). The Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).

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(b)Commencing at the time this Indenture is qualified under the TIA, a copy of each report mailed to Holders under this Section 7.6 (at the time of its mailing to Holders) shall be filed with the SEC and each stock exchange, if any, on which the Securities are listed. The Company shall promptly notify the Trustee if and when the Securities are listed on any stock exchange.

Section 7.7Compensation and Indemnity.

(a)The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and its performance of the duties and services required hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel.

(b)The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in paragraph 7.7(d) hereof. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder, except to the extent the Company is prejudiced thereby. The Company shall defend the claim and the Trustee shall reasonably cooperate in such defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

(c)The obligations of the Company under this Section 7.7 shall survive the satisfaction and discharge of this Indenture.

(d)The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through its own negligence or bad faith.

(e)To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on a Payment Date scheduled to occur within ten (10) days of the Trustee's intended exercise of such lien. Such lien shall survive the satisfaction and discharge of this Indenture. The Trustee shall provide the Company with notice of its exercise of the lien provided for herein concurrently with its exercise of such lien.

(f)When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(e) or (f) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

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Section 7.8Replacement of Trustee.

(a)A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.8.

(b)Upon appointment of a successor Trustee, the Trustee may resign and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(1)the Trustee fails to comply with Section 7.10;

(2)the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(3)a Custodian or public officer takes charge of the Trustee or its property;

(4)the Trustee becomes incapable of acting as Trustee under this Indenture; or

(5)the Company so elects, provided such replacement Trustee is qualified and reasonably acceptable.

(c)If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee.

(d)If a successor Trustee does not take office within thirty (30) days after notice that the Trustee has been removed, the Company may appoint a successor Trustee.

(e)If the Trustee after written request by any Holder fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(f)A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to all Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the lien provided for in Section 7.7. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof shall continue for the benefit of the retiring Trustee.

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Section 7.9Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. The Trustee shall provide notice of any event described in this Section to the Company prior to or as soon as practical after the occurrence thereof.

Section 7.10Eligibility; Disqualification.

(a)There shall at all times be a Trustee hereunder which shall be a corporation or association organized and doing business under the laws of the United States of America or of any state or territory thereof or of the District of Columbia authorized under such laws to exercise corporate trustee power, shall be subject to supervision or examination by Federal, state, territorial or District of Columbia authority and shall have a combined capital and surplus of at least $5,000,000 as set forth in its most recent published annual report of condition.

(b)This Indenture shall always have a Trustee who satisfies the requirements of TIAss. 310(a)(1) and (2). The Trustee is subject to TIAss. 310(b).

Section 7.11Preferential Collection of Claims Against Company.

The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.

ARTICLE VIII.  

DISCHARGE OF INDENTURE

Section 8.1Termination of Company's Obligations.

(a)This Indenture shall cease to be of further effect (except that the Company's obligations under Sections 7.7 and 8.4, and the Company's, Trustee's and Paying Agent's obligations under Section 8.3 shall survive) when all outstanding Securities have been paid in full and the Company has paid all sums payable by the Company hereunder. In addition, the Company may terminate all of its obligations under this Indenture if:

(1)the Company irrevocably deposits in trust with the Trustee or at the option of the Trustee, with a trustee reasonably satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or U.S. Government Obligations sufficient to pay principal and interest on the Securities to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder, provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such U.S. Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal and interest with respect to the Securities;

(2)the Company delivers to the Trustee an Officer's Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture have been complied with; and

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(3)no Event of Default or event (including such deposit) which, with notice or lapse of time, or both, would become an Event of Default with respect to the Securities shall have occurred and be continuing on the date of such deposit.

Then, this Indenture shall cease to be of further effect (except as provided in this paragraph), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging confirmation of and discharge under this Indenture. The Company may make the deposit only if Article X hereof does not prohibit such payment. However, the party's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 4.1, 4.2, 4.3, 7.7, 7.8, 8.3 and 8.4 shall survive until the Securities are no longer outstanding. Thereafter, only the Company's obligations in Sections 7.7 and 8.4 and the Company's, Trustee's and Paying Agent's obligations in Section 8.3 shall survive.

(b)After such irrevocable deposit made pursuant to this Section 8.1 and satisfaction of the other conditions set forth herein, the Trustee upon written request shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above.

(c)In order to have money available on a payment date to pay principal or interest on the Securities, the U.S. Government Obligations shall be payable as to principal or interest at least one Business Day before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option.

Section 8.2Application of Trust Money.

The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.1. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Securities.

Section 8.3Repayment to Company.

(a)The Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. All money deposited with the Trustee pursuant to Section 8.1 (and held by it or the Paying Agent) for the payment of Securities subsequently converted shall be returned to the Company upon request.

(b)The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years after the right to such money has matured; provided, however, that the Company shall cause notice of such payment to be mailed to each Holder entitled thereto no less than thirty (30) days prior to such repayment. After payment to the Company, Holders entitled to the money must look to the Company for payment as unsecured general creditors unless an abandoned property law designates another Person. If money is delivered to the Company pursuant to this Section 8.3(b), all liability of the Trustee and the Paying Agent with respect to such money shall cease.

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Section 8.4Reinstatement.

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 8.2 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 8.2; provided, however, that if the Company has made any payment of interest on or principal of any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment, as long as no money is owed to the Trustee by the Company, from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

ARTICLE IX.  

AMENDMENTS

Section 9.1Without Consent of Holders.

The Company and the Trustee may amend this Indenture or the Securities without the consent of any Holder:

(a)to cure any ambiguity, defect or inconsistency;

(b)to comply with Section 5.1;

(c)to make any change that would provide any additional rights or benefits to Holders of Securities or that does not adversely affect the legal rights hereunder of any Holder;

(d)to increase the aggregate dollar amount of Securities which may be outstanding under this Indenture;

(e)make any change in Section 3.2; provided, however, that no such change shall adversely affect the rights of any outstanding Security;

(f)to comply with any requirements of the SEC in connection with the qualification of this Indenture under the TIA or any requirements of state securities regulators imposed in connection with the qualification of the Indenture or the Securities under state law; or

(g)to make any change necessary to maintain the Company's status as a real estate investment trust.

Section 9.2With Consent of Holders.

(a)The Company and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities. The Holders of a majority in principal of the then outstanding Securities may also waive any existing default or compliance with any provision of this Indenture or the Securities.

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(b)It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

Section 9.3Compliance with Trust Indenture Act.

If at the time this Indenture shall be qualified under the TIA, every amendment to this Indenture or the Securities shall be set forth in a supplemental indenture that complies with the TIA as then in effect.

Section 9.4Revocation and Effect of Consents.

(a)Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

(b)The Company may fix a record date for determining which Holders must consent to such amendment or waivers. If the Company fixes a record date, the record date shall be fixed at (i) the later of thirty (30) days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation pursuant to Section 2.5, or (ii) such other date as the Company shall designate.

Section 9.5Notation on or Exchange of Securities.

The Trustee may place an appropriate notation about an amendment or waiver on any Security, if certificated, or any Account statement. Failure to make any notation or issue a new Security shall not affect the validity and effect of such amendment or waiver.

Section 9.6Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 9 if, in the Trustee's reasonable discretion, the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplemental indenture, the Trustee shall be entitled to receive, if requested, an indemnity reasonably satisfactory to it and to receive and, subject to Section 7.1, shall be fully protected in relying upon, an Officer's Certificate and an Opinion of Counsel (or written advice of counsel) as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms.

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ARTICLE X.  

MISCELLANEOUS

Section 10.1Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall control.

Section 10.2Notices.

(a)Any notice, instruction, direction, request or other communication by the Company, the Trustee or any Holder to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the other's address:

If to the Company:

AMERICAN CHURCH MORTGAGE COMPANY

10237 Yellow Circle Drive

Minnetonka, MN 55343

Attention: President

Fax: (952) 945-9433

If to the Trustee:

HERRING BANK

Corporate Trust Department

1608 S. Polk St.

Amarillo, TX 79102

Fax: (806) 378-1810

(b)The Company or the Trustee by notice to the Company and the Trustee may designate additional or different addresses for subsequent notices or communications.

(c)All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

(d)Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, to his address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

(e)If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

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(f)If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

Section 10.3Communication by Holders with Other Holders.

Holders may communicate pursuant to TIA ss. 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Trustee shall provide information regarding other Holders to any Holder only as required by TIA ss. 312(b). The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c).

Section 10.4Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

(a)an Officer's Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b)an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.

Section 10.5Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA ss. 314(a)(4)) shall include:

(a)a statement that the Person making such certificate or opinion has read such covenant or condition;

(b)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c)a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion whether such covenant or condition has been complied with; and

(d)a statement whether, in the opinion of such Person, such condition or covenant has been complied with.

Section 10.6Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

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Section 10.7Legal Holidays.

A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the State of Minnesota or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

Section 10.8No Recourse Against Others.

No director, officer, employee, agent, manager or stockholder of the Company as such, shall have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability.

Section 10.9Duplicate Originals.

The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture.

Section 10.10Governing Law.

THE INTERNAL LAW OF THE STATE OF MINNESOTA SHALL GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

Section 10.11No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 10.12Successors.

All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successor.

Section 10.13Severability.

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 10.14Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

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Section 10.15Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions thereof.

[Remainder of page intentionally left blank.]

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SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed and their respective corporate seals to be hereunto affixed and attested, as of the day and year first written above.

AMERICAN CHURCH MORTGAGE COMPANY

By: /s/ Philip J. Myers

Philip J. Myers, President

STATE OF MINNESOTA )

) ss.

COUNTY OF HENNEPIN )

The foregoing was acknowledged before me this __ day of September, 2017, by Philip J. Myers, in his capacity as President of American Church Mortgage Company, a Minnesota corporation.

/s/ Daniel S. Peterson

Notary Public

HERRING BANK, as Trustee

By: /s/ Catana Gray

Name: Catana Gray

Title: Vice-President

STATE OF TEXAS )

) ss.

COUNTY OF POTTER )

The foregoing was acknowledged before me this ___ day of September, 2017, by Catana Gray, in her capacity as Vice-President of Herring Bank.

/s/ Lori Hagler

Notary Public

{SIGNATURE PAGE TO INDENTURE}

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EX-5

Exhibit 5

 

September __, 2017

American Church Mortgage Company

10237 Yellow Circle Drive

Minnetonka, MN 55343

RE: American Church Mortgage Company

Ladies and Gentlemen:

We have acted as counsel to you in connection with the preparation and filing by you of a Registration Statement on Form S-11 (the “Registration Statement”), containing a Prospectus (the “Prospectus”), under the Securities Act of 1933, as amended (the “Act”), with respect to the registration of $10,000,000 Series E Secured Investor Certificates (the “Certificates”) of American Church Mortgage Company, a Minnesota corporation (the “Company”).

We have reviewed the Registration Statement, including the Prospectus, which provides that it will be supplemented in the future by one or more supplements to the Prospectus (a “Prospectus Supplement”). The Prospectus as supplemented by various Prospectus Supplements will provide for the issuance and sale of the Certificates. The Certificates will be issued pursuant to one or more indentures in the form filed as an exhibit to the Registration Statement, as amended or supplemented from time to time (each, an “Indenture”), between the Company, as obligor, and a trustee chosen by the Company and qualified to act as such under the Trust Indenture Act of 1939, as amended (each, a “Trustee”).

In addition, we have examined such other documents and have reviewed such questions of law as we have considered necessary and appropriate for the purposes of our opinion set forth below. In rendering our opinion, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. As to questions of fact material to our opinion, we have relied upon certificates of officers of the Company and of public officials.

Based on the foregoing, we are of the opinion that the Certificates are duly and validly authorized for issuance and, when issued and paid for, as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement(s), will be validly issued, fully paid and non-assessable.

Suite 3500 | 225 South Sixth Street | Minneapolis, MN 55402 | Main:(612) 604-6400 | Fax:(612) 604-6800 | www.winthrop.com | A Professional Association

American Church Mortgage Company

September __, 2017

Page 2

We are also of the opinion that when the Certificates are then issued and sold as contemplated by the Registration Statement, the Prospectus and the related Prospectus Supplement(s) and the Indenture, which is governed by the laws of the state of Minnesota, the Certificates will constitute valid and binding obligations of the Company.

The foregoing opinions are subject to: (i) the effect of bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors; (ii) general principles of equity (whether considered in a proceeding in equity or at law); and (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of, or contribution to, a party with respect to a liability where such indemnification or contribution is contrary to public policy. We express no opinion concerning the enforceability of any waiver of rights or defenses with respect to stay, extension or usury laws, and we express no opinion with respect to whether acceleration of the Certificates may affect the collectibility of any portion of the stated principal amount thereof which might be determined to constitute unearned interest thereon.

We assume for purposes of this opinion that the Company will remain duly organized, validly existing and in good standing under Minnesota law.

To the extent that the obligations of the Company under an Indenture may be dependent thereon, we assume for purposes of this opinion that such Indenture has been duly executed and delivered by the Company; that the Trustee for each Indenture is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; that the Trustee is duly qualified to engage in the activities contemplated by the applicable Indenture; that the applicable Indenture has been duly authorized, executed and delivered by the Trustee and constitutes a legally valid, binding and enforceable obligation of the Trustee, enforceable against the Trustee in accordance with its terms; that the Trustee is in compliance, generally and with respect to acting as Trustee under the applicable Indenture, with all applicable laws and regulations; and that the Trustee has the requisite organizational and legal power and authority to perform its obligations under the applicable Indenture.

We consent to the use of this opinion as an exhibit to the Registration Statement and to the reference to our name under the heading “LEGAL MATTERS” in the Prospectus. In giving such consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Securities and Exchange Commission promulgated under the Act.

Very truly yours,

WINTHROP & WEINSTINE, P.A.

/s/ Winthrop & Weinstine, P.A.

EX-8

Exhibit 8

 

September __, 2017

American Church Mortgage Company

10237 Yellow Circle Drive

Minnetonka, Minnesota 55343

Re: American Church Mortgage Company

Ladies and Gentlemen:

We have acted as special United Stated federal income tax counsel to American Church Mortgage Company, a Minnesota corporation (the “Company”), with respect to the preparation and filing by Registration Statement on Form S-11 (the “Registration Statement”), containing a prospectus (the “Prospectus”), under the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder (collectively the “1933 Act”), with respect to the registration of $10,000,000 of Series E Secured Investor Certificates (the “Certificates”) of the Company.

In connection with rendering the opinions expressed below, we have examined originals (or copies identified to our satisfaction as true copies of the originals) of the following documents (collectively, the “Reviewed Documents”):

(1) the Company’s Articles of Incorporation (the “Company Charter”);

(2) the Company’s Bylaws (the “Company Bylaws”);

(3) the Registration Statement; and

(4) such other documents that the Company may have presented to us from time to time.

In addition, we have relied upon the factual representations contained in the Company’s certificate, dated as of the date hereof (the “Officer’s Certificate”), executed by a duly appointed officer of the Company, setting forth certain representations relating to the organization and operation of the Company.

For purposes of our opinions, we have not made an independent investigation of the information set forth in the documents that we have reviewed or on which we have relied. We consequently have assumed that the information, including all representations and statements of a factual nature, presented in such documents or otherwise furnished to us by the Company accurately and completely describes all material information relevant to our opinions and that all of the obligations imposed by any such documents on the parties thereto have been, and will be,

Suite 3500 | 225 South Sixth Street | Minneapolis, MN 55402 | Main:(612) 604-6400 | Fax:(612) 604-6800 | www.winthrop.com | A Professional Association

American Church Mortgage Company

September __, 2017

Page 2

performed or satisfied in accordance with their terms. Any representation or statement in any such document or otherwise furnished to us that has been made “to the best of our knowledge” or otherwise similarly qualified is assumed to be correct and complete. In the course of our representation of the Company, no information has come to our attention that would cause us to question, in a material way, the accuracy or completeness of the documents that we have reviewed or on which we have relied or the information, including representations and statements, that is contained in such documents or otherwise furnished to us. Any alteration of the information that is set forth in the documents that we have reviewed or on which we have relied or the information that otherwise was furnished to us may adversely affect our opinions.

In our review, we have assumed the genuineness of all signatures, the proper execution of all documents, the legal capacity of natural persons executing such documents, the authenticity of all documents that we have reviewed or on which we have relied as originals, the conformity to originals of documents that we have reviewed or on which we have relied as copies, and the authenticity of the originals from which any copies were made. We also have assumed that the Company or any entities in which it holds, or will hold, direct or indirect ownership interests will not take any action after the date of this opinion letter that would alter the information upon which the opinions set forth in this opinion letter are based.

In rendering these opinions, we have assumed that the transactions contemplated by the Reviewed Documents will be consummated in accordance with the terms and provisions of such documents and that such documents accurately reflect the material facts of such transactions. In addition, the opinions are based on the correctness of the following specific assumptions:

(i) The Company will be operated in the proposed manner described in the Company Charter, the Company Bylaws, and the Registration Statement, and all terms and provisions of such agreements and documents will be complied with by all parties thereto; and

(ii) The Company is a duly formed corporation under the laws of the State of Minnesota.  

The opinions set forth in this opinion letter are based on relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder by the United States Department of the Treasury (the “Regulations”) (including temporary Regulations), and interpretations of the foregoing as expressed in court decisions, the legislative history, and existing administrative rulings and practices of the Internal Revenue Service (the “IRS”) (including the IRS’s practices and policies in issuing private letter rulings, which are not binding on it except with respect to the taxpayer that receives a private letter ruling), all as of the date hereof. It should be noted that the Code, the Regulations, and judicial decisions and administrative interpretations of both the Code and the Regulations are subject to change at any time and, in some circumstances, with retroactive effect. A material change that is made after the date of this opinion letter in any of the foregoing bases for our opinions could affect them.

American Church Mortgage Company

September __, 2017

Page 3

It also must be noted that the qualification and taxation of the Company as a REIT will depend upon its ability to meet annually, based on its actual annual operating results, distribution levels, and diversity of share ownership, the various REIT qualification requirements imposed under Sections 856 through 860 of the Code and the Regulations. No assurances can be given that the actual, annual results of the Company for any one taxable year will satisfy all of REIT qualification requirements under Sections 856 through 860 of the Code for such taxable year.

Based upon and subject to the foregoing, it is our opinion that:

1. The Company has been organized in a manner that will permit it to satisfy the requirements under Sections 856 through 860 of the Code for qualification and taxation as a REIT for the taxable year 2017. The Company’s proposed method of operation, as described in the Prospectus, will permit the Company to satisfy the requirements for qualification and taxation as a REIT under Sections 856 through 860 of the Code with respect to 2017 and subsequent taxable years. The Company’s status as REIT under the Code with respect to 2017 and each subsequent taxable year, however, will depend upon the Company’s actually satisfying the REIT requirements of Sections 856 through 860 of the Code with respect to 2017 and each subsequent taxable year. Thus, because the Company’s satisfaction of the requirements of Sections 856 through 860 of the Code will depend upon future events in 2017 and each subsequent taxable year, including the final determination of the Company’s financial and operating results for 2017 and each subsequent taxable year, we cannot opine that the Company actually will satisfy the requirements under Code Sections 856 through 860 to qualify as a REIT with respect to 2017 or any subsequent taxable year. We will not review the annual results of the Company to determine whether the Company actually met the REIT qualification requirements with respect to a taxable year.

2. The discussion in the Registration Statement under the heading “Federal Income Tax Consequences Associated with the Certificates” to the extent that it constitutes matters of federal income tax law or legal conclusions relating thereto, is our opinion as to the material United States federal income tax consequences of the acquisition, ownership, and disposition of the Certificates.

The foregoing opinions are limited to the matters specifically discussed herein, which are the only matters to which the Company has requested our opinions. Other than as expressly stated above, we express no opinion on any issue relating to the Company or to any investment therein, including, except as set forth above, the tax consequences, whether federal, state, local, or foreign, of the acquisition, ownership, and disposition of the Certificates. We are furnishing this opinion letter to the Company solely in connection with the Registration Statement relating to the Certificates.

We assume no obligation to advise the Company of any changes in the foregoing subsequent to the date of this opinion letter, and we are not undertaking to update this opinion letter from time to time. The Company should be aware that an opinion of counsel represents

American Church Mortgage Company

September __, 2017

Page 4

only counsel’s best legal judgment, that the opinion has no binding effect or official status of any kind, and that no assurance can be given either that the IRS may not take contrary positions or that a court considering the issues would not hold otherwise.

We consent to the use of our name wherever it appears in the Registration Statement with respect to the discussion of the material United States federal income tax consequences of the acquisition, ownership, and disposition of the Certificates and to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act, and we do not admit that we are “experts” within the meaning of such term as used in the 1933 Act with respect to any part of the Registration Statement, including this opinion letter as an exhibit or otherwise.

Very truly yours,

WINTHROP & WEINSTINE, P.A.

/s/ Winthrop & Weinstine, P.A.

EX-10.5

EXHIBIT 10.5

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (“Security Agreement”) is made as of September __, 2017, by American Church Mortgage Company, a Minnesota corporation (the “Company”), in favor of Herring Bank, a state banking institution, as trustee under the Indenture described below (the “Trustee”).

WHEREAS, the Company has entered into an Indenture dated as of the approximate date hereof with the Trustee (the “Indenture”), whereby the Trustee has agreed to act as the indenture trustee under the Trust Indenture Act of 1939 for the benefit of the holders of those certain Series E Secured Investor Certificates issued by the Company (the “Securities”); and

WHEREAS, under the terms of the Indenture the Company has agreed to pledge certain collateral as security for the payment of principal and interest on the Securities.

NOW, THEREFORE, the Company agrees with Trustee as follows:

1.Security Interest. The Company hereby pledges to, and grants to the Trustee a security interest (herein called the “Security Interest”) in, the Collateral (as described in Section 2 below) to secure the payment and performance of the following debts, liabilities and obligations of the Company (such debts, liabilities and obligations being herein collectively referred to as the “Obligations”):

(a)the payment of principal and interest on the Securities, as required under the terms and conditions of the Securities;

(b)the Company’s obligations under the Indenture, and this Security Agreement; and

(c)all amounts owed under any modifications, renewals or extensions of any of the foregoing Obligations.

2.Collateral. As used herein, the term “Collateral” means the following property:

(a)the promissory notes, church bonds, and investment property described in Schedule A;

(b)such Additional Notes that are designated by the Company as Collateral pursuant to Section 3 below;

(c)any Substituted Notes that are substituted by Company for existing Collateral pursuant to Section 4 below;

(d)supporting obligations of the Notes described in (a), (b), and (c) above; and

(e)proceeds of any and all of the foregoing.

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Each of the items described in (a), (b), and (c) above is referred to herein as a “Note” and the all of such items are collectively referred to herein as the “Notes.”

The Company shall within five (5) business days of the date hereof, and in any event prior to the sale of any Securities, deliver to the Trustee the Notes described in Schedule A, together with endorsements by the Company in blank for such Notes.

3.Additional Collateral. Subject to the terms of Section 4.9 of the Indenture, the Company may at any time designate additional promissory notes or similar instruments or investment property (“Additional Notes”) as Collateral for the Obligations. The Company may make such designation by delivering (a) the original Additional Notes and (b) an endorsement in blank for the Additional Notes to the Trustee and upon the Trustee’s receipt, the Additional Notes shall be deemed to be Collateral.

4.Substitution of Collateral.

(a)Provided that no Event of Default has occurred and is continuing, the Company shall have the right (and, under the terms of the Indenture, in certain circumstances the obligation) to substitute promissory notes or other similar instruments or investment property that meet the terms and conditions of Section 4.9 of the Indenture (“Substituted Notes”) for Notes previously pledged as Collateral (“Released Notes”).

(b)The Company may make such a substitution by delivering to the Trustee:

(i)a written notice to the Trustee executed by an officer of the Company which contains (A) a description of the Substituted Note(s), (B) a statement that such Substituted Note has been pledged by the Company as Collateral under this Security Agreement, (C) a certification by the Company that the representations and warranties regarding Collateral contained in Section 6 below are true with respect to the Substituted Note, (D) a description of the Notes to be released from the Security Interest (i.e., a description of the Released Note(s)), and (E) a certification by the Company that upon the release of the Released Notes from the Security Interest, the value of the Collateral shall be at least 100% of the aggregate principal amount of the Securities then outstanding (the “Minimum Value”);

(ii)the original Substituted Note(s); and

(iii)an endorsement in blank for the Substituted Notes.

(c)So long as the aggregate value of the Collateral after the release of the Released Notes is at least the Minimum Value, the value of the Substituted Note(s) being substituted for the Released Note(s) may be less than the value of the Released Note(s).

(d)Upon the Trustee’s receipt of the documents described in Section 4(b), the Substituted Note(s) shall be deemed to be Collateral and the Released Note(s) shall be deemed to be released from the Security Interest and shall no longer be subject to the terms of this Security Agreement. The Trustee shall promptly thereafter return the

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Released Note(s) to the Company, together with any endorsement of such Released Note(s) made by the Company.

(e)In the event that the Trustee has filed (or has caused to be filed) a financing statement in order to perfect the Security Interest in a Note that has become a Released Note, the Trustee shall prepare and file a financing statement amendment which releases the Released Note from the Security Interest and the Security Agreement (the “Release”). The Trustee hereby authorizes the Company to file a copy of the Release in the appropriate filing office if the Trustee has not filed the Release within ten (10) business days of the Trustee’s receipt of the documents described in Section 4(b). This authorization is intended to comply with the terms of Minn. Stat. §336.9-509 and no further writing is required as evidence of the Trustee’s grant of authority to the Company to file the Release.

5.Representations, Warranties and Agreements. The Company represents, warrants and agrees that:

(a)The Company is a corporation organized under the laws of the state of Minnesota;

(b)The Company’s exact legal name is as set forth in the first paragraph of this Security Agreement;

(c)This Agreement has been duly and validly authorized by all necessary corporate action and the person executing this Agreement on behalf of the Company has the requisite authority to act for the Company.

(d)Until the Obligations are paid in full, the Company will:

(i)preserve its corporate existence and not, in one transaction or a series of related transactions, merge into or consolidate with any other entity, or sell all or substantially all of its assets;

(ii)not change its name, its type of organization, the state of its incorporation or organization, or its organizational identification number; and

(iii)not change its corporate name without providing the Trustee with thirty (30) days’ prior written notice.

6.Representations, Warranties and Agreements With Respect to Collateral. The Company represents, warrants and agrees that:

(a)The Company has (or will have at the time the Company acquires rights in Collateral hereafter arising) absolute title to each item of Collateral free and clear of all claims, security interests, liens, encumbrances, and restrictions on transfer or pledge except the Security Interest and will defend the Collateral against all claims or demands of all persons other than the Trustee. Except as provided in the Indenture, the Trustee

3

does not authorize, and the Company agrees not to (i) make any sales of any of the Collateral; or (ii) grant any other security interest in the Collateral.

(b)Each right to payment and each instrument, document, chattel paper and other agreement constituting or evidencing Collateral is (or will be when arising or issued) the valid genuine and legally enforceable obligation, subject to no defense, set-off or counterclaim (other than those arising in the ordinary course of business) of the account debtor or other obligor named therein or in the Company’s records pertaining thereto as being obligated to pay such obligation. The Company will neither agree to any material modification or amendment nor agree to any cancellation of any such obligation without the Trustee’s prior written consent, and will not subordinate any such right to payment to claims of other creditors of such account debtor or other obligor.

(c)The Company covenants that it will:

(i)promptly pay all taxes and other governmental charges levied or assessed upon or against any Collateral or upon or against the creation, perfection or continuance of the Security Interest;

(ii)keep all Collateral free and clear of all security interests, liens and encumbrances except the Security Interest;

(iii)at all reasonable times, permit the Trustee or its representatives to examine or inspect any Collateral, wherever located, and to examine, inspect and copy the Company’s books and records pertaining to the Collateral and its business and financial condition and to send and discuss with account debtors and other obligors requests for verifications of amounts owed to the Company;

(iv)upon the request of the Trustee, provide photocopies of any of the Collateral (or, to the extent that such Collateral is not of a tangible nature, photocopies of documentation evidencing the Collateral);

(v)promptly notify the Trustee of any loss of or material damage to any Collateral or of any adverse change, known to the Company, in the prospect of payment of any sums due on or under any instrument, chattel paper, or account constituting Collateral;

(vi)not use or keep any Collateral, or permit it to be used or kept, for any unlawful purpose or in violation of any federal, state or local law, statute or ordinance; and

If the Company at any time fails to perform or observe any agreement contained in this Section 6(c), and if such failure shall continue for a period of ten (10) calendar days after the Trustee gives the Company written notice thereof, the Trustee may (but need not) perform or observe such agreement on behalf and in the name, place and stead of the Company (or, at the Trustee’s option, in the Trustee’s own name) and may (but need not) take any and all other actions which the Trustee may reasonably deem necessary to cure or correct such failure (including, without limitation, the payment of taxes, the satisfaction of security interests, liens, or

4

encumbrances, the performance of obligations under contracts or agreements with account debtors or other obligors, the procurement and maintenance of insurance, and the procurement of repairs, transportation or insurance); and, except to the extent that the effect of such payment would be to render any loan or forbearance of money usurious or otherwise illegal under any applicable law, the Company shall thereupon pay the Trustee within fifteen (15) business days of the Company’s receipt of the Trustee’s demand, the amount of all moneys expended and all costs and expenses (including reasonable attorneys’ fees for any purpose relating to the enforcement of the Trustee’s rights hereunder including consultation, drafting documents, sending notices and/or instituting, prosecuting or defending litigation or arbitration) incurred by the Trustee in connection with or as a result of the Trustee’s performing or observing such agreements or taking such actions, together with interest thereon from the date expended or incurred by the Trustee at the highest rate then applicable to any of the Obligations.

7.Perfection of Security Interests. The Trustee shall have the right to file, from time to time, such financing statements as the Trustee may reasonably require in order to perfect the Security Interest. To the extent permitted by law, the Company hereby authorizes and empowers the Trustee to file one or more financing statements and any other documents or instruments as are necessary to perfect the Security Interest, all without the signature or prior consent of the Company.

8.Events of Default. Each of the following occurrences shall constitute an event of default under this Agreement (herein called “Event of Default”):

(a)an “Event of Default” (as defined in the Indenture) shall have occurred and is continuing beyond any applicable grace or cure period;

(b)any representation or warranty by the Company set forth in this Agreement shall prove materially false or misleading; or

(c)the Trustee shall receive at any time after the date hereof an official report from the Secretary of State of the State of Minnesota or any other state where the Collateral is located indicating that the Security Interest is not prior to all other security interests or other interests reflected in the report.

9.Remedies upon Event of Default. Upon the occurrence of an Event of Default under Section 8 and at any time thereafter, the Trustee may exercise any one or more of the following rights and remedies:

(a)require the prompt delivery to the Trustee of an assignment of any mortgage or other supporting obligation in a form sufficient for recording of such assignment;

(b)notify any account debtor that the Company’s right to payment has been assigned or transferred to the Trustee and that all amounts shall be paid directly to the Trustee;

(c)exercise and enforce any or all rights and remedies available upon default to a secured party under the Uniform Commercial Code, including but not limited to the

5

right to take possession of any Collateral, proceeding without judicial process (without a prior hearing or notice thereof, which the Company hereby expressly waives), and the right to sell, lease or otherwise dispose of any or all of the Collateral, and in connection therewith, the Trustee may require the Company to make the Collateral available to the Trustee at a place to be designated by the Trustee which is reasonably convenient to both parties, and if notice to the Company of any intended disposition of Collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given at least ten (10) calendar days prior to the date of intended disposition or other action; or

(d)exercise or enforce any or all other rights or remedies available to the Trustee by law or agreement against the Collateral, against the Company or against any other person or property.

Whether or not an Event of Default has occurred, the Company shall pay when due or reimburse the Trustee on demand for all costs of collection of any of the Obligations and all other out-of-pocket expenses incurred by the Trustee in connection with the creation, perfection, satisfaction, protection, defense or enforcement of the Security Interest or the creation, continuance, protection, defense or enforcement of this Security Agreement or any or all of the Obligations, including but not limited to: (i) filing fees; (ii) costs of foreclosure; (iii) costs of obtaining money damages; and (iv) reasonable attorney’s fees for any purpose relating to the enforcement of this Security Agreement including consultation, drafting documents, sending notices and/or instituting, prosecuting or defending litigation or arbitration.

If during a sale of Collateral following an Event of Default, the Trustee sells any of the Collateral upon credit, the Company will be credited only with payments actually made by the purchaser, received by the Trustee and applied to the indebtedness of such purchaser. In the event the purchaser fails to pay for the Collateral, the Trustee may resell the Collateral and the Company shall be credited with the proceeds of the Sale. To the extent permitted under applicable law, the Trustee may disclaim any warranty of title or any other warranty with respect to any Collateral sold by the Trustee following an Event of Default.

10.Notice.

(a)Any notice, document or other communication from one party to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the other’s address:

If to the Company:

AMERICAN CHURCH MORTGAGE COMPANY

10237 Yellow Circle Drive

Minnetonka, MN 55343

Attention: President

Fax: (952) 945-9433

6

If to the Trustee:

HERRING BANK

1608 S. Polk St.

Amarillo, TX 79102

Attention: Corporate Trust Department

Fax:(806) 378-1810

(b)All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

(c)Each party, by notice to the other, may designate additional or different addresses for subsequent notices or communications.

11.Miscellaneous.

(a)This Agreement can be waived, modified, amended, terminated or discharged and the Security Interest can be released, only explicitly in a writing signed by the Trustee. A waiver signed by the Trustee shall be effective only in the specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of the Trustee’s rights or remedies.

(b)All rights and remedies of the Trustee shall be cumulative and may be exercised singularly or concurrently, at the Trustee’s option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other.

(c)This Agreement shall be binding upon and inure to the benefit of the Company and the Trustee and their respective heirs, representatives, successors and assigns and shall take effect when signed by the Company and delivered to the Trustee, and the Company waives notice of the Trustee’s acceptance hereof. The Trustee may execute this Agreement if appropriate for the purpose of filing, but the failure of the Trustee to execute this Agreement shall not affect or impair the validity or effectiveness of this Agreement. All representations and warranties contained in this Agreement shall survive the execution, delivery and performance of this Agreement and the creation and payment of the Obligations.

(d)To facilitate execution, this Agreement may be executed in as many separate counterparts as may be convenient or required. It shall not be necessary that the signature of each party, or that the signature of all persons required to bind any party, appear on each counterpart. Each counterpart when so executed and delivered shall be deemed to be an original, and all counterparts taken together shall constitute but one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties, hereto. Signature pages from any

7

counterpart may be detached from the counterpart and attached with other signature pages to a single copy of the Agreement to physically form one document.

(e)This Agreement shall be governed by the internal laws of the State of Minnesota. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. Any term not defined herein shall have, to the extent applicable, the definition set forth in Chapter 336.9 of Minnesota Statutes.

[Remainder of page intentionally left blank.]

8

IN WITNESS WHEREOF, the Company and the Trustee hereby execute this Security Agreement as of the date first written above.

COMPANY:

AMERICAN CHURCH MORTGAGE COMPANY

By: _______________________________

Philip J. Myers, President

TRUSTEE:

HERRING BANK

By:_________________________________

Catana Gray Vice President

[Signature page to Security Agreement]

9

SCHEDULE A

(Initial Collateral)

Date of Note	Loan Recipient	Original Principal Value	Outstanding Principal Balance as of  September 2017
		________________	__________________
		$	$

EX-23.2

EX-25

_____________________________________________________________________________

securities and exchange commission

Washington, D.C. 20549

__________________________

FORM T-1

Statement of Eligibility Under

The Trust Indenture Act of 1939 of a

Corporation Designated to Act as Trustee

Check if an Application to Determine Eligibility of

a Trustee Pursuant to Section 305(b)(2)

_______________________________________________________

HERRING BANK

(Exact name of Trustee as specified in its charter)

75-0330569

(I.R.S. Employer Identification Number)

1608 S. Polk St. Amarillo, Texas	79102
(Address of Principal Executive Offices)	(Zip Code)

Catana Gray

Herring Bank

1608 S. Polk St.

Amarillo, Texas 79102

(806) 378-1810

(Name, address and telephone number of agent for service)

AMERICAN CHURCH MORTGAGE COMPANY

(Issuer with respect to the Securities)

Minnesota	41-1793975
(State or other jurisdiction of incorporation or organization)	(I.R.S.  Employer Identification No.)

10237 Yellow Circle Drive Minnetonka, Minnesota	55343
(Address of Principal Executive Offices)	(Zip Code)

$10,000,000 – Series E Secured Investor Certificates

(Title of the Indenture Securities)

______________________________________________________________________________

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Federal Deposit Insurance Corporation Washington, D.C.

Texas State Banking Department, Austin, TX

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15. Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.

2. A copy of the certificate of authority of the Trustee to commence business.

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers. (See Exhibit 2)

4. A copy of the existing bylaws of the Trustee.

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of December 31, 2016, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

NOTE

The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, HERRING BANK, a state banking institution organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Amarillo, State of Texas on the ___ day of September, 2017.

HERRING BANK

/s/ Catana Gray

Catana Gray

Vice President

Exhibit 1

Articles of Association

Incorporated herein by reference to Exhibit 25 to the Company’s Registration Statement, SEC File #333-197326 filed July 9, 2014.

Exhibit 2

Certificate of Authority

 

Exhibit 4

Bylaws

Incorporated herein by reference to Exhibit 25 to the Company’s Registration Statement, SEC File #333-197326 filed July 9, 2014.

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, HERRING BANK hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: September __, 2017

HERRING BANK

By: /s/ Catana Gray

Catana Gray

Vice-President

Exhibit 7

Herring Bank

Statement of Financial Condition

Annual Disclosure Statement

December 31, 2016

FFIEC 041

Herring Bank
Amarillo, TX 79109

I, the undersigned officer, attest to the correctness of this statement and declare that it has been examined by me and to the best of my knowledge and belief has been prepared in accordance with instructions issued by the appropriate Federal regulatory authority and is true and correct.

________________________________________________________________________

Signature Date

This statement has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation

 

 

 

 

 

 

 

 

 

XML

Document and Entity Information - USD ($)	6 Months Ended
	Jun. 30, 2017	Sep. 06, 2017
Document And Entity Information
Entity Registrant Name	American Church Mortgage Company
Entity Central Index Key	0000934543
Document Type	S-11
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 1,677,798
Entity Common Stock, Shares Outstanding		1,677,798
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML

Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Cash and equivalents	$ 963,383	$ 3,382,994	$ 4,377,110
Accounts receivable	237,509	219,352	189,609
Interest receivable	178,477	175,912	172,169
Investments	2,410	2,410
Current maturities of mortgage loans receivable, net of allowance of $101,393, $41,912 and $57,663 and deferred origination fees of $41,611, $22,444 and $23,406 at June 301, 2017, December 31, 2016 and December 31, 2015, respectively	1,725,407	725,727	1,134,157
Current maturities of bond portfolio	131,000	111,000	84,000
Prepaid expenses	11,109	1,489	19,904
Total current assets	3,249,295	4,618,884	5,976,949
Mortgage Loans Receivable, net of current maturities, allowance of $1,262,389, $1,270,071 and $1,147,170 and deferred origination fess of $278,338, $276,055 and $311,938 at June 30, 2017, December 31, 2016 and Decmeber 31, 2015, respectively	21,721,841	22,396,071	22,680,542
Bond Portfolio, at fair value, net of current maturities	12,915,616	11,371,616	10,429,428
Real Estate Held for Sale	225,872	340,872	697,422
Deferred Offering Costs, net of accumulated amortization of $1,161,088, $1,101,441 and $974,991at June 30, 2017, December 31, 2016 and December 31, 2015, respectively	819,087	839,195	861,810
Total Assets	38,931,711	39,566,638	40,646,151
Current Liabilities
Current maturities of secured investor certificates	1,461,000	2,803,000	3,120,000
Accounts payable	49,204	36,951	29,417
Dividends payable	117,446	100,668	125,836
Total current liabilities	1,627,650	2,940,619	3,275,253
Secured Investor Certificates, Series B, net of current maturities	11,800,000	11,486,000	13,074,000
Secured Investor Certificates, Series C, net of current maturities	6,237,000	6,339,000	6,723,000
Secured Investor Certificates, Series D	7,965,000	7,296,000	5,329,000
Total liabilities	27,629,650	28,061,619	28,401,253
Stockholders' Equity
Common stock, par value $.01 per share, Authorized, 30,000,000 shares, Issued and outstanding, 1,677,798 shares at March 31, 2017, December 31, 2016 and December 31, 2015, respectively	16,778	16,778	16,778
Additional paid-in capital	19,113,458	19,113,458	19,113,458
Accumulated deficit	(7,828,175)	(7,625,217)	(6,885,338)
Total stockholders' equity	11,302,061	11,505,019	12,244,898
Total Liabilities and Stockholders' Equity	$ 38,931,711	$ 39,566,638	$ 40,646,151

XML

Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Current Assets
Current allowance for current maturities of mortgage loans recievable	$ 101,393	$ 41,912	$ 57,663
Current deferred origination fees for current mortgage loans recievable	41,611	22,444	23,406
Allowance for mortgage loans recievable	1,262,389	1,270,071	1,147,170
Deferred origination fees for mortgage loans recievable	278,338	276,055	311,938
Accumulated amortization deferred offering costs	$ 1,161,088	$ 1,101,441	$ (974,991)
Stockholders' Equity
Common Stock, par value	$ 0.01	$ 0.01	$ 0.01
Common Stock, Authorized	30,000,000	30,000,000	30,000,000
Common Stock, Issued	1,677,798	1,677,798	1,677,798
Common Stock, Outstanding	1,677,798	1,677,798	1,677,798

XML

Statements of Operations - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Interest and Other Income	$ 700,067	$ 661,666	$ 1,382,792	$ 1,338,230	$ 2,698,186	$ 2,936,326
Interest Expense	474,622	506,338	955,754	1,005,657	2,025,000	1,997,249
Net Interest Income	225,445	155,328	427,038	332,573	673,186	939,077
Provision for losses on mortgage loans receivable	28,425	92,377	51,799	144,476	155,056	188,634
Net Interest Income after Provision for Mortgage Losses	197,020	62,951	375,239	188,097	518,130	750,443
Other than temporary impairment on bond portfolio		60,000		120,000	258,000
Operating Expenses
Other operating expenses	143,632	177,310	343,305	342,236	597,337	792,730
Operating Income (Loss)	53,388	(174,359)	31,934	(274,139)	(337,207)	(42,287)
Other Income						4,053
Net Income (Loss)	$ 53,388	$ (174,359)	$ 31,934	$ (274,139)	$ (337,207)	$ (38,234)
Basic and Diluted Income (Loss) Per Share	$ 0.03	$ (0.10)	$ 0.02	$ (0.16)	$ (0.20)	$ (0.02)
Dividends Declared Per Share	$ 0.07	$ 0.06	$ 0.07	$ 0.06	$ 0.24	$ 0.23
Weighted Average Common Shares Outstanding - Basic and Diluted	1,677,798	1,677,798	1,677,798	1,677,798	1,677,798	1,677,798

XML

Statements of Cash Flows - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Cash Flows from Operating Activities
Net income (loss)	$ 31,934	$ (274,139)	$ (337,207)	$ (38,234)
Net loss on sales and impairment on real estate held for sale	66,971	(62,043)	78,473	296,727
Provision for losses on mortgage loans receivable	51,799	144,476	155,056	188,634
Other than temporary impairment bond portfolio		120,000	258,000
Accreation of deferred loan origination fees	21,450	6,000	(36,845)	(126,998)
Amortization of deferred costs	59,647	64,082	126,450	130,548
Accounts receivable	(18,157)	(16,858)	(29,743)	55,516
Interest receivable	(2,565)	(2,411)	(3,743)	(43,269)
Prepaid expenses	(9,620)	10,772	18,415	(14,025)
Accounts payable	(15,726)	38,156	7,534	43,536
Management fee payable	27,529		236,930	492,435
Net cash provided by operating activities	213,712	28,035
Cash Flows from Investing Activities
Investment in mortgage loans	(3,088,230)	(690,497)	(1,076,520)	(2,922,335)
Collections of mortgage loans	2,689,530	1,035,652	1,897,287	4,845,882
Investment purchased			(2,410)
Proceeds from sale of other real estate held for sale	48,029		(1,622,000)	(1,850,053)
Investment in bonds	(1,621,000)	(930,000)	394,812	145,228
Proceeds from bonds	57,000	44,000	32,000
Net cash (used for) investing activities	(1,914,671)	(540,845)	(376,831)	218,722
Cash Flows from Financing Activities
Proceeds from secured investor certificates	661,000	996,000	1,452,000	1,877,000
Payments on secured investor certificate maturities	(1,122,000)	(151,000)	(1,774,000)	(1,377,000)
Payments for deferred costs	(39,538)	(60,522)	(103,835)	(131,366)
Dividends paid	(218,114)	(226,504)	(427,840)	(469,783)
Net cash (used for) provided by financing activities	(718,652)	557,974	(853,675)	(101,149)
Net (Decrease) Increase in Cash and Equivalents	(2,419,611)	45,164	(994,116)	610,008
Cash and Equivalents - Beginning of Period	3,382,994	4,377,110	4,377,110	3,767,102
Cash and Equivalents - End of Period	$ 963,383	$ 4,422,274	$ 3,382,994	$ 4,377,110

XML

Statements of Cash Flows (Parenthetical) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Statement of Cash Flows [Abstract]
Dividends payable	$ 117,446	$ 100,668	$ 100,668	$ 125,836
Loan origination fees	31,750		13,665	109,997
Interest paid	896,108	942,573	1,898,550	1,866,701
Non-cash investing activity: Real estate heolf for sale financed through mortgage loans receivable		340,872	380,250
Loan transferred to real estate held for sale			$ 134,173	$ 473,105

XML

Shareholders Equity - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings / Accumulated Deficit
Beginning balance, shares at Dec. 31, 2014	1,677,798
Beginning balance, value at Dec. 31, 2014	$ 16,778	$ 19,113,458	$ (6,419,265)
Net Income			$ (38,234)
Dividends declared			$ (427,839)
Ending balance, shares at Dec. 31, 2015	1,677,798
Ending balance, value at Dec. 31, 2015	$ 16,778	19,113,458	$ (6,885,338)
Net Income			$ (38,234)
Dividends declared			$ (427,839)
Ending balance, shares at Dec. 31, 2016	1,677,798
Ending balance, value at Dec. 31, 2016	$ 16,778	$ 19,113,458	$ (6,885,338)

XML

Summary Of Significant Accounting Policies

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with the instructions for interim statements and, therefore, do not include all information and disclosures necessary for fair presentation of results of operations, financial position, and changes in cash flow in conformity with generally accepted accounting principles. However, in the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for fair presentation of financial position, results of operations, and cash flows for the period presented.

The unaudited financial statements of the Company should be read in conjunction with the December 31, 2016 audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the year ended December 31, 2016. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

Nature of Business

American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

Concentration of Credit Risk

The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor.

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $629 and $14,841 in money market fund accounts at June 30, 2017 and December 31, 2016, respectively. The Company has not experienced any losses in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320. The Company classifies the bond portfolio as “available-for-sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available-for-sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $131,000 and $111,000 in bonds as current assets as of June 30, 2017 and December 31, 2016, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, respectively.

Allowance for Mortgage Loans Receivable

The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans. The Company’s loan loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of a loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2017, the Company provided $1,363,782 for seventeen mortgage loans, of which seven totaling approximately $3,457,000 are three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 are declared to be in default and two loans totaling approximately $633,000 are in the foreclosure process. At December 31, 2016, the Company provided $1,311,983 for seventeen mortgage loans, of which seven totaling approximately $3,449,000 were three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 were declared to be in default and two loans totaling approximately $627,000 were in the foreclosure process.

A summary of transactions in the allowance for credit losses for the three months ended June 30, 2017 is as follows:

Balance at December 31, 2016	$	1,311,983
Provision for additional losses		51,799
Balance at June 30, 2017	$	1,363,782

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,858,000 and $1,853,000 at June 30, 2017 and December 31, 2016, respectively. Which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $688,000 and $663,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at June 30, 2017 and December 31, 2016, respectively.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,457,000 and $3,449,000 exceeded 90 days past due but continued to accrue interest at June 30, 2017 and December 31, 2016, respectively. The Company believes that the loans are well secured, not deemed to be in default and the Company is actively pursuing collection of past due payments.

Real Estate Held for Sale

As of June 30, 2017, the Company had one property acquired via deed in lieu of foreclosure, with outstanding loan balances totaling $225,872. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is $225,872 as of June 30, 2017. There was no additional impairment for the six month period ended June 30, 2017.

The Company sold one property and disposed of a second property during the six month period ended June 30, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. The Company realized an additional loss of approximately $67,000 on property that was sold as of June 30, 2017. The Company sold two properties during the six month period ended June 31, 2016. The two properties were sold for approximately $380,000. The Company provided seller financing to the borrowers. The Company realized an additional loss of approximately $52,000 on both properties as of June 30, 2016.

Carrying Value of Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life.

Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An allowance for losses is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals.

Revenue Recognition

Interest income on mortgage loans receivable and the bond portfolio is recognized as earned. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.

Deferred Financing Costs

The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method.

Income (Loss) Per Common Share

No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and the valuation of real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

Concentration of Credit Risk

The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor.

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $14,841 and $2,233,533 in a money market fund account at December 31, 2016 and 2015, respectively. The Company has not experienced any losses in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $111,000 and $84,000 in bonds as current assets as of December 31, 2016 and 2015, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2016 and 2015, respectively.

Allowance for Mortgage Loans Receivable

The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2016, the Company reserved $1,311,983 for seventeen mortgage loans. Twelve of these loans are three or more mortgage payments in arrears of which three are declared to be in default and two are in the foreclosure process. The total principal amount of these twelve loans totals approximately $5,302,000 at December 31, 2016. At December 31, 2015, the Company reserved $1,204,833 for eighteen mortgage loans. Thirteen of these loans are three or more mortgage payments in arrears of which two are declared to be in default and three loans are in the foreclosure process. The total principal amount of these thirteen loans totals approximately $5,503,000

A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows:

	2016			2015
Balance at beginning of year	$	1,204,833		$	1,177,231
Provision for losses on mortgage loans receivable		155,056			188,634
Reclassified to real estate held for sale		(29,806	)		—
Charge-offs		(18,100	)		(161,032	)
Balance at end of year	$	1,311,983		$	1,204,833

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,853,000 and $1,779,000 at December 31, 2016 and 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $663,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2016. Approximately $581,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2015.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. No interest income was recognized on non-accrual loans for the years ended December 31, 2016 and 2015.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,449,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2016 and 2015, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments.

Real Estate Held for Sale

As of December 31, 2016, the company has two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with net carrying balances totaling approximately $341,000. We have listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying the property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is approximately $341,000 as of December 31, 2016 after total impairment of approximately $277,000.

Foreclosure was completed in 2004 on a church located in Battle Creek, Michigan. The church congregation disbanded and the church property is currently unoccupied. The Company owns and took possession of the church and has listed the property for sale through a local realtor.

A deed in lieu of foreclosure was received in 2008 from a church located in Pine Bluff, Arkansas. The Company owns and took possession of the church while the church attempts to obtain financing from another lender. If alternative financing cannot be obtained, the Company will list the church for sale with a local realtor. The church is paying monthly rent until the property is refinanced or sold.

Foreclosure was completed in 2016 on a church located in Detroit, Michigan. The Company took possession of the property in March 2016 and listed it for sale through a local realtor.

Carrying Value of Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life.

Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals.

Revenue Recognition

Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.

Deferred Financing Costs

The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method.

Income (loss) Per Common Share

No adjustments were made to income (loss) for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

Income Taxes

The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code.

The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure.

Subsequent Events

The Company has evaluated events and transaction through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2016 financial statements.

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Fair Value Measurements

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

2. FAIR VALUE MEASUREMENTS

The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data.

Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our Balance Sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate allowance for losses on our Agape bonds (see Note 3), which totaled $458,000 for both periods ended June 30, 2017 and December 31, 2016.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis:

		Fair Value Measurement
June 30, 2017	Fair Value	Level 3
Bond portfolio	$13,046,616	$13,046,616

		Fair Value Measurement
December 31, 2016	Fair Value	Level 3
Bond portfolio	$11,482,616	$11,482,616

We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds, and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows:

		Bond Portfolio
Balance at December 31, 2016	$	11,482,616
Purchases		1,621,000
Proceeds		(57,000	)
Balance at June 30, 2017	$	13,046,616

Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $0 and $19,173 for the six month periods ended June 30, 2017 and December 31, 2016, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis:

	June 30, 2017
	Level 1		Level 2		Level 3		Fair Value at March 31, 2017
Impaired Loans	$	—	$	—	$	1,172,294	$	1,172,294
Real estate held for resale		—		—		225,872		225,872
	$	—	$	—	$	1,398,166	$	1,398,166

	December 31, 2016
	Level 1		Level 2		Level 3		Fair Value at December 31, 2016
Impaired Loans	$	—	$	—	$	1,189,873	$	1,189,873
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,530,745	$	1,530,745

The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows:

		Impaired Loans			Real Estate Held for Sale
Balance at December 31, 2016	$	1,189,873		$	340,872
Additions		7,036			—
Dispositions		—			(115,000	)
Provision for other than temporary losses		(24,615	)		—
Balance at June 30, 2017	$	1,172,294		$	225,872

2. FAIR VALUE MEASUREMENT

The Company measures certain financial instruments at fair value in our balance sheets. The fair value of these instruments is based on valuations that include inputs that can be classified within one of the three levels of a hierarchy. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data.

Except for the bond portfolio, which is required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company elected not to record any other financial assets or liabilities at fair value on a recurring basis. We recorded an aggregate other than temporary impairment for losses on our Agape bonds (Note 3), which totaled $458,000 and $200,000 for the years ended December 31, 2016 and 2015, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring basis:

		Fair Value Measurement
December 31, 2016	Fair Value	Level 3
Bond portfolio	$11,482,616	$11,482,616

		Fair Value Measurement
December 31, 2015	Fair Value	Level 3
Bond portfolio	$10,513,428	$10,513,428

We determine the fair value of the bond portfolio shown in the table above by comparing it with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

The change in Level 3 assets measured at fair value on a recurring basis is summarized as follows:

	Bond Portfolio
Balance at December 31, 2015	$10,513,428
Purchases	1,622,000
Proceeds	(394,812)
Other than temporary investment	(258,000)
Balance at December 31, 2016	$11,482,616

Real estate held for sale and impaired loans are recorded at fair value on a nonrecurring basis. The fair value of real estate held for sale was based upon the listed sales price less expected selling costs, which is a Level 3 input. The resulting impairment charges were $19,173 and $193,104 for the years ended December 31, 2016 and 2015, respectively.

The following table summarizes the Company’s financial instruments that were measured at fair value on a nonrecurring basis:

	December 31, 2016
	Level 1		Level 2		Level 3		Fair Value at December 31, 2016
Impaired Loans	$	—	$	—	$	1,189,873	$	1,189,873
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,530,745	$	1,530,745

	December 31, 2015
	Level 1		Level 2		Level 3		Fair Value at December 31, 2015
Impaired Loans	$	—	$	—	$	1,197,302	$	1,197,302
Real estate held for resale		—		—		697,422		697,422
	$	—	$	—	$	1,894,724	$	1,894,724

The change in Level 3 assets measured at fair value on a nonrecurring basis is summarized as follows:

	Impaired Loans	Real Estate Held for Sale
Balance at December 31, 2015	$1,197,302	$697,422
Additions/Acquisitions	221,683	134,173
Dispositions/Proceeds	(134,173)	(471,550)
Impairment	(111,362)	(  19,173)
Balance at December 31, 2016	$1,173,450	$340,872

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Mortgage Loans Receivable and Bond Portfolio

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Mortgage Loans Receivable and Bond Portfolio

3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO

At June 30, 2017, the Company had mortgage loans receivable totaling $25,130,979. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.20% at June 30, 2017. The Company had mortgage loans receivable totaling $24,732,280 that bore interest ranging from 0% to 10.25% with a weighted average of approximately 8.25% at December 31, 2016.

The Company has a portfolio of secured church bonds at June 30, 2017 and December 31, 2016, which are carried at fair value. The bonds pay quarterly interest ranging from 2.75% to 9.75%. The aggregate value of secured church bonds equaled approximately $13,505,000 at June 30, 2017 with a weighted average interest rate of 6.84% and approximately $11,941,000 at December 31, 2016 with a weighted average interest rate of 6.77%. These bonds are due at various maturity dates through May 15, 2046.

The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of June 30, 2017, is as follows:

	Mortgage Loans	Bond Portfolio
July 1, 2017 through June 30, 2018	$     1,868,411	$  131,000
July 1, 2018 through December 31, 2018	2,742,724	83,000
2019	1,301,152	155,000
2020	1,362,089	168,000
2021	784,343	236,000
Thereafter	17,072,260	12,731,616
	25,130,979	13,504,616
Less loan loss and bond other than temporary impairment	(1,363,782)	(458,000)
Less deferred origination income	(319,949)	______-__
Totals	$23,447,248	$ 13,046,616

The Company currently owns $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate other than temporary impairment of $458,000 for the First and Second Mortgage Bonds at June 31, 2017 and December 31, 2016, which effectively reduces the bonds to the fair value amount management believes will be recovered. The Church has subsequently defaulted on their modification agreement in 2016 and no interest payments were made to bondholders during the six month period ended June 30, 2017. However, the trustee made a distribution to bondholders during the quarter of $18.75 per $1,000 bond as a repayment of principal only, effectively reducing the outstanding balance of each $1,000 bond to approximately $826.

3. MORTGAGE LOANS RECEIVABLE AND BOND PORTFOLIO

At December 31, 2016, the Company had first mortgage loans receivable totaling $24,732,280. The loans bear interest ranging from 0% to 10.25% with a weighted average of approximately 8.25% at December 31, 2016. The Company had first mortgage loans receivable totaling $25,354,876 that bore interest ranging from 1.00% to 10.25% with a weighted average of approximately 8.35% at December 31, 2015.

The Company has a portfolio of secured church bonds at December 31, 2016 and December 31, 2015, which are carried at fair value. The bonds pay either semi-annual or quarterly interest ranging from 2.75% to 9.75%. The aggregate par value of secured church bonds equaled approximately $11,940,616 at December 31, 2016 with a weighted average interest rate of 6.77% and approximately $10,713,428 at December 31, 2015 with a weighted average interest rate of 6.92%. These bonds are due at various maturity dates through May 2046. The Company has recorded an aggregate other than temporary impairment of $458,000 and $200,000 at December 31, 2016 and 2015, respectively, for the First Mortgage Bonds issued by Agape Assembly Baptist Church. This bond series in the aggregate constitute approximately 8.50% and 10.00% of the bond portfolio at December 31, 2016 and 2015, respectively. The Company had maturities and redemptions of bonds of approximately $395,000 and $145,000 in 2016 and 2015, respectively.

The contractual maturity schedule for mortgage loans receivable and the bond portfolio as of December 31, 2016, is as follows:

	Mortgage Loans	Bond Portfolio
2017	$    790,083	$    111,000
2018	3,283,240	139,000
2019	1,326,144	144,000
2020	1,389,493	156,000
2021	814,392	221,000
Thereafter	17,128,928	11,169,616
	24,732,280	11,940,616
Less loan loss and other than temporary impairment on bonds allowance	(1,311,983)	(458,000)
Less deferred origination income	(298,499)	___-____
Totals	$23,121,798	$11,482,616

The Company currently owns $529,000 First Mortgage Bonds and $497,000 Second Mortgage Bonds issued by Agape Assembly Baptist Church located in Orlando, Florida. The total principal amount of First Mortgage Bonds issued by Agape is $7,200,000, and the total principal amount of Second Mortgage Bonds issued is $715,000. Agape defaulted on its payment obligations to bondholders in September 2010. The church subsequently commenced a Chapter 11 bankruptcy reorganization proceeding regarding the property that secures the First Mortgage Bonds in December 2010. Agape is currently performing under a loan modification agreement. In October 2014, a minimum of 80% of the bondholders of Agape agreed to a modification in the terms of their bonds which has resulted in the resumption of both principal and interest payments to both the first and second mortgage bond holders. Both the First Mortgage Bonds and Second Mortgage Bonds have been modified to a fully amortized fixed rate, quarterly interest payment of 6.25% with a new maturity date of September 2037 for all the issued and outstanding bonds. The Company, along with all other bondholders, has a superior lien over all other creditors. The Company has an aggregate other than temporary impairment of $458,000 and $200,000 for the First and Second Mortgage Bonds at December 31, 2016 and 2015, respectively, which effectively reduces the bonds to the fair value amount management believes will be recovered.

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Secured Investor Certificates

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Secured Investor Certificates

4. SECURED INVESTOR CERTIFICATES

Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.45% and 6.47% at March 31, 2017 and December 31, 2016, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $141,000 and $174,000 for the three months ended June 30, 2017 and 2016, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures.

The estimated maturity schedule for the secured investor certificates at June 30, 2017 is as follows:

July 1, 2017 through June 30, 2018	$    1,461,000
July 1, 2018 through December 31, 2018	3,539,000
2019	2,333,000
2020	4,062,000
2021	1,928,000
Thereafter	14,140,000
Totals	$27,463,000

In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series D secured investor certificates. The offering was declared effective by the SEC on August 12, 2014. The offering was renewed with an effective date of September 23, 2016. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At June 30, 2017, approximately 7,965 Series D certificates had been issued and were outstanding for $7,965,000. The offering will be terminated in September 2017.

4. SECURED INVESTOR CERTIFICATES

Secured investor certificates are collateralized by certain mortgage loans receivable or secured church bonds of approximately the same value as the certificates. The weighted average interest rate on the certificates was 6.47% and 6.44% at December 31, 2016 and 2015, respectively. Holders of the secured investor certificates may renew certificates at the current rates and terms upon maturity at the Company’s discretion. Renewals upon maturity are considered neither proceeds from nor issuance of secured investor certificates. Renewals totaled approximately $831,000 and $958,000 during 2016 and 2015, respectively. The secured investor certificates have certain financial and non-financial covenants identified in the respective series’ trust indentures.

The estimated maturity schedule for the secured investor certificates at December 31, 2016 is as follows:

2017	$  2,803,000
2018	4,116,000
2019	2,333,000
2020	4,058,000
2021	1,928,000
Thereafter	12,686,000
Totals	$27,924,000

In July 2014, the Company filed a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series D secured investor certificates. The offering was declared effective by the SEC on August 12, 2014. The offering was renewed with an effective date of September 23, 2016. The certificates are being offered in multiples of $1,000 with interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 and 7 to 15 years. The certificates are collateralized by certain mortgage loans receivable and church bonds of approximately the same value. At December 31, 2016, approximately 7,296 Series D certificates had been issued and were outstanding for $7,296,000.

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Transactions With Affiliates

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Transactions With Affiliates

5. TRANSACTIONS WITH AFFILIATES

The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. A majority of the independent board members approve the advisory agreement on an annual basis. The Company paid the Advisor management fees of approximately $81,000 and $80,000 during the three months ended June, 2017 and 2016, respectively and management fees of approximately $162,000 and $160,000 for the six months ended June 30, 2017 and 2016, respectively.

5. TRANSACTIONS WITH AFFILIATES

The Company has an Advisory Agreement with Church Loan Advisors, Inc. (the “Advisor”). The Advisor is responsible for the day-to-day operations of the Company and provides office space and administrative services. The Advisor and the Company are related through common ownership and common management. For its services, the Advisor is entitled to receive a management fee equal to 1.25% annually of the Company's Average Invested Assets, plus one-half of any origination fee charged to borrowers on mortgage loans made by the Company. A majority of the independent board members approve the Advisory Agreement on an annual basis. The Company paid the Advisor management and origination fees of approximately $324,000 and $393,000 during the years ended December 31, 2016 and 2015, respectively.

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

6. INCOME TAXES

As discussed in Note 1, a REIT is subject to taxation to the extent that taxable income exceeds dividend distributions to shareholders. In order to maintain status as a REIT, the Company is required to distribute at least 90% of its taxable income. In 2016, the Company had pretax loss of $(337,207) and distributions to shareholders in the form of dividends during the tax year of $402,672. The tax benefit based on statutory rates to the Company, pre-dividends would have been $(114,650) in 2016. In 2015, the Company had pretax loss of $(38,234) and distributions to shareholders in the form of dividends during the tax year of $469,783. The tax based on statutory rates to the Company, pre-dividends, would have been $(13,000) in 2015. The Company paid out 100% of taxable income in dividends in 2016 and 2015.

The following reconciles the income tax provision with the expected provision obtained by applying statutory rates to pretax income:

	2016			2015
Tax based on statutory rates	$	(114,650	)	$	(13,000	)
Tax effect on realized losses on properties		(361,276	)		—
Benefit of REIT distributions		475,926			13,000
Total tax provision	$	—		$	—

The components of deferred income tax assets are as follows:

	2016			2015
Loan origination fees	$	101,490		$	114,017
Loan and bond loss provisions		446,074			477,643
Real-estate impairment		94,254			271,984
Valuation allowance		(641,818	)		(863,644	)
Deferred income tax asset, net	$	—		$	—

The change in the valuation allowance was approximately $(222,000) and $(64,000) for 2016 and 2015, respectively.

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Fair Value Financial Instruments

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Fair Value Financial Instruments

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument.

The fair value estimates presented herein are based on relevant information available to management as of June 30, 2017 and December 31, 2016, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company.

The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows:

	June 30, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and equivalents	$	963,383	$	963,383	$	3,382,994	$	3,382,994
Accounts receivable		237,509		237,509		219,352		219,352
Interest receivable		178,477		178,477		175,912		175,912
Mortgage loans receivable		23,227,248		27,494,751		24,732,280		25,646,901
Bond portfolio		13,046,616		13,046,616		11,940,616		11,940,616
Secured investor certificates		27,463,000		33,746,095		27,924,000		35,415,944

The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and equivalents

Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value.

Accounts receivable

The carrying amount of accounts receivable approximates fair value.

Interest receivable

The carrying amount of interest receivable approximates fair value.

Mortgage loans receivable

The fair value of the mortgage loans receivable is currently greater than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality.

Bond portfolio

We determine the fair value of the bond portfolio shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the Company’s bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

Secured investor certificates

The fair value of the secured investor certificates is currently greater than the carrying value due to higher interest rates than current market rates.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company is required to disclose the fair value information about financial instruments, where it is practicable to estimate that value. Because assumptions used in these valuation techniques are inherently subjective in nature, the estimated fair values cannot always be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument.

The fair value estimates presented herein are based on relevant information available to management as of December 31, 2016 and 2015, respectively. Management is not aware of any factors that would significantly affect these estimated fair value amounts. As these reporting requirements exclude certain financial instruments and all non-financial instruments, the aggregate fair value amounts presented herein do not represent management’s estimate of the underlying value of the Company.

The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are as follows:

	December 31, 2016		December 31, 2015
	Carrying	Fair	Carrying	Fair
	Amount	Value	Amount	Value
Cash and equivalents	$   3,382,994	$   3,382,994	$   4,377,110	$   4,377,110
Accounts receivable	219,352	219,352	189,609	189,609
Interest receivable	175,912	175,912	172,169	172,169
Mortgage loans receivable	24,732,280	25,646,901	25,354,876	29,054,399
Bond portfolio	11,940,616	11,940,616	10,713,428	10,713,428
Secured investor certificates	27,924,000	35,415,944	28,246,000	36,995,152

The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and equivalents

Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value.

Accounts receivable

The carrying amount of accounts receivable approximates fair value.

Interest receivable

The carrying amount of interest receivable approximates fair value.

Mortgage loans receivable

The fair value of the mortgage loans receivable is currently more than the carrying value as the portfolio is currently yielding a higher rate than similar mortgages with similar terms for borrowers with similar credit quality. The credit markets in which the Company conducts business have experienced an increase in interest rates resulting in the fair value of the mortgage loans falling during the fiscal year ended December 31, 2016.

Bond portfolio

We determine the fair value of the bond portfolio shown in the table above by comparing with similar instruments in inactive markets. The analysis reflects the contractual terms of the bonds, which are callable at par by the issuer at any time, and the anticipated cash flows of the bonds and uses observable and unobservable market-based inputs. Unobservable inputs include our internal credit rating and selection of similar bonds for valuation.

Secured investor certificates

The fair value of the secured investor certificates is currently greater than the carrying value due to higher interest rates than current market rates.

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Summary Of Significant Accounting Policies (Policies)

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Accounting Policies [Abstract]

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with the instructions for interim statements and, therefore, do not include all information and disclosures necessary for fair presentation of results of operations, financial position, and changes in cash flow in conformity with generally accepted accounting principles. However, in the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for fair presentation of financial position, results of operations, and cash flows for the period presented.

The unaudited financial statements of the Company should be read in conjunction with the December 31, 2016 audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the year ended December 31, 2016. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

Nature of Business

American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations.

Nature of Business

Nature of Business

American Church Mortgage Company, a Minnesota corporation, was incorporated on May 27, 1994. The Company was organized to engage primarily in the business of making mortgage loans to churches and other nonprofit religious organizations throughout the United States, on terms established for individual organizations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

Accounting Estimates

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. The most sensitive estimates relate to the realizability of the mortgage loans receivable, the valuation of the bond portfolio and real estate held for sale. It is at least reasonably possible that these estimates could change in the near term and that the effect of the change, if any, may be material to the financial statements.

Concentration of Credit Risk

The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor.

Concentration of Credit Risk

Concentration of Credit Risk

The Company's loans have been granted to churches and other non-profit religious organizations. The ability of the Company’s debtors to honor their contracts is dependent on member contributions and the involvement in the church or organization of its senior pastor.

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $14,841 and $2,233,533 in a money market fund account at December 31, 2016 and 2015, respectively. The Company has not experienced any losses in such accounts.

Cash and Equivalents

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

The Company maintains accounts primarily at two financial institutions. At times throughout the year, the Company’s cash and equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash in money market funds is not federally insured. The Company had $629 and $14,841 in money market fund accounts at June 30, 2017 and December 31, 2016, respectively. The Company has not experienced any losses in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320, Investments-Debt and Equity Securities. The Company classifies the bond portfolio as “available-for sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available for sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $111,000 and $84,000 in bonds as current assets as of December 31, 2016 and 2015, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2016 and 2015, respectively.

Bond Portfolio

Bond Portfolio

The Company accounts for the bond portfolio under the Accounting Standards Codification (ASC) 320. The Company classifies the bond portfolio as “available-for-sale” and measures the portfolio at fair value. While the bonds are generally held until contractual maturity, the Company classifies them as available-for-sale as the bonds may be used to repay secured investor certificates or provide additional liquidity or working capital in the short term. The Company has classified $131,000 and $111,000 in bonds as current assets as of June 30, 2017 and December 31, 2016, respectively, based on management’s estimates for liquidity requirements and contractual maturities of certain bonds maturing in 2017 and 2016, respectively.

.

Allowance for Mortgage Loans Receivable

The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans and less deferred loan origination fees. The Company’s loan policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio with application of reserve percentages to specific loans based on payment status. This policy reserves for principal amounts outstanding on a specific loan if cumulative interruptions occur in the normal payment schedule of the loan, therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of the loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At December 31, 2016, the Company reserved $1,311,983 for seventeen mortgage loans. Twelve of these loans are three or more mortgage payments in arrears of which three are declared to be in default and two are in the foreclosure process. The total principal amount of these twelve loans totals approximately $5,302,000 at December 31, 2016. At December 31, 2015, the Company reserved $1,204,833 for eighteen mortgage loans. Thirteen of these loans are three or more mortgage payments in arrears of which two are declared to be in default and three loans are in the foreclosure process. The total principal amount of these thirteen loans totals approximately $5,503,000

A summary of transactions in the allowance for mortgage loans for the years ended December 31 is as follows:

	2016			2015
Balance at beginning of year	$	1,204,833		$	1,177,231
Provision for losses on mortgage loans receivable		155,056			188,634
Reclassified to real estate held for sale		(29,806	)		—
Charge-offs		(18,100	)		(161,032	)
Balance at end of year	$	1,311,983		$	1,204,833

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,853,000 and $1,779,000 at December 31, 2016 and 2015, respectively, which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $663,000 of the Company’s allowance for mortgage loans was allocated to these loans at December 31, 2016. Approximately $581,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at December 31, 2015.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status. No interest income was recognized on non-accrual loans for the years ended December 31, 2016 and 2015.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,449,000 and $3,724,000 exceeded 90 days past due but continued to accrue interest as of December 31, 2016 and 2015, respectively. The Company believes that continued interest accruals are appropriate because the loans are well secured, not deemed to be in technical default and the Company is actively pursuing collection of past due payments.

Allowance for Mortgage Loans Receivable

Allowance for Mortgage Loans Receivable

The Company records mortgage loans receivable at estimated net realizable value, which is the unpaid principal balances of the mortgage loans receivable, less the allowance for mortgage loans. The Company’s loan loss policy provides an allowance for estimated uncollectible loans based on an evaluation of the current status of the loan portfolio. This policy provides for principal amounts outstanding on a particular loan if cumulative interruptions occur in the normal payment schedule of a loan; therefore, the Company recognizes a provision for losses and an allowance for the outstanding principal amount of a loan in the Company’s portfolio if the amount is in doubt of collection. Additionally, no additional interest income is recognized on impaired loans that are declared to be in default and are in the foreclosure process. At June 30, 2017, the Company provided $1,363,782 for seventeen mortgage loans, of which seven totaling approximately $3,457,000 are three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 are declared to be in default and two loans totaling approximately $633,000 are in the foreclosure process. At December 31, 2016, the Company provided $1,311,983 for seventeen mortgage loans, of which seven totaling approximately $3,449,000 were three or more mortgage payments in arrears, three loans totaling approximately $1,226,000 were declared to be in default and two loans totaling approximately $627,000 were in the foreclosure process.

A summary of transactions in the allowance for credit losses for the three months ended June 30, 2017 is as follows:

Balance at December 31, 2016	$	1,311,983
Provision for additional losses		51,799
Balance at June 30, 2017	$	1,363,782

The total impaired loans, which are loans that are in the foreclosure process or are declared to be in default, were approximately $1,858,000 and $1,853,000 at June 30, 2017 and December 31, 2016, respectively. Which the Company believes are adequately secured by the underlying collateral and the allowance for mortgage loans. Approximately $688,000 and $663,000 of the Company’s allowance for mortgage loans was allocated to impaired loans at June 30, 2017 and December 31, 2016, respectively.

The Company will declare a loan to be in default and will place the loan on non-accrual status when the following thresholds have been met: (i) the borrower has missed three consecutive mortgage payments; (ii) the borrower has not communicated to the Company any legitimate reason for delinquency in its payments to the Company and has not arranged for the re-continuance of payments; (iii) lines of communication to the borrower have broken down such that any reasonable prospect of rehabilitating the loan and return of regular payments is gone.

The Company’s policies on payments received and interest accrued on non-accrual loans are as follows: (i) The Company will accept payments on loans that are currently on non-accrual status when a borrower has communicated to us that they intend to meet their mortgage obligations. A payment made on a non-accrual loan is considered a good faith deposit as to the intent to resume their mortgage payment obligation. This good faith deposit is credited back to interest first then principal as stated in the mortgage loan documentation. (ii) A letter outlining the re-payment terms or the restructure terms (if any) of the loan is provided to the borrower. This letter will be signed by the Senior Pastor and all board members of the borrower. This letter resumes the obligation to make payments on non-accrual loans. (iii) The borrower must meet all its payment obligations for the next 120 days without interruption in order to be removed from non-accrual status.

When a loan is declared in default according to the Company’s policy or deemed to be doubtful of collection, the loan committee of the Advisor to the Company will direct the staff to charge-off the uncollectable receivables.

Loans totaling approximately $3,457,000 and $3,449,000 exceeded 90 days past due but continued to accrue interest at June 30, 2017 and December 31, 2016, respectively. The Company believes that the loans are well secured, not deemed to be in default and the Company is actively pursuing collection of past due payments.

Real Estate Held for Sale

As of December 31, 2016, the company has two properties acquired through foreclosure, and one via deed in lieu of foreclosure, with net carrying balances totaling approximately $341,000. We have listed the properties for sale through local realtors except for the property for which we received a deed in lieu of foreclosure. The Church is still occupying the property and paying rent while trying to either sell the building or obtain refinancing. Each property is valued based on its current listing price less any anticipated selling costs, including, for example, realtor commissions. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is approximately $341,000 as of December 31, 2016 after total impairment of approximately $277,000.

Foreclosure was completed in 2004 on a church located in Battle Creek, Michigan. The church congregation disbanded and the church property is currently unoccupied. The Company owns and took possession of the church and has listed the property for sale through a local realtor.

A deed in lieu of foreclosure was received in 2008 from a church located in Pine Bluff, Arkansas. The Company owns and took possession of the church while the church attempts to obtain financing from another lender. If alternative financing cannot be obtained, the Company will list the church for sale with a local realtor. The church is paying monthly rent until the property is refinanced or sold.

Foreclosure was completed in 2016 on a church located in Detroit, Michigan. The Company took possession of the property in March 2016 and listed it for sale through a local realtor.

Real Estate Held for Sale

Real Estate Held for Sale

As of June 30, 2017, the Company had one property acquired via deed in lieu of foreclosure, with outstanding loan balances totaling $225,872. The Church is still occupying this property and paying rent while trying to either sell the building or obtain refinancing. The Company records real estate held for sale at the estimated fair value, which is net of the expected expenses related to the sale of the real estate. The fair value of our real estate held for sale, which represents the carrying value, is $225,872 as of June 30, 2017. There was no additional impairment for the six month period ended June 30, 2017.

The Company sold one property and disposed of a second property during the six month period ended June 30, 2017. The first property was sold to an unrelated third party for approximately $48,000. The second property was disposed by way of a “Quit-Claim Deed” to an unrelated third party. The disposed property had no carrying value. The Company realized an additional loss of approximately $67,000 on property that was sold as of June 30, 2017. The Company sold two properties during the six month period ended June 31, 2016. The two properties were sold for approximately $380,000. The Company provided seller financing to the borrowers. The Company realized an additional loss of approximately $52,000 on both properties as of June 30, 2016.

Carrying Value of Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life.

Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals.

Carrying Value of Long-Lived Assets

Carrying Value of Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of the estimated useful life.

Recoverability is assessed based on the carrying amount of the asset compared to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An allowance for losses is recognized when the carrying amount is deemed not recoverable and exceeds fair value as determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values, and third party independent appraisals.

Revenue Recognition

Interest income on mortgage loans receivable and the bond portfolio is recognized as earned per the terms of the specific asset. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.

Revenue Recognition

Revenue Recognition

Interest income on mortgage loans receivable and the bond portfolio is recognized as earned. Other income included with interest represents cash received for loan origination fees, which are recognized over the life of the loan as an adjustment to the yield on the loan.

Deferred Financing Costs

The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method.

Deferred Financing Costs

Deferred Financing Costs

The Company defers the costs related to obtaining financing. These costs are amortized over the life of the financing using the straight line method, which approximates the effective interest method.

Income (loss) Per Common Share

No adjustments were made to income (loss) for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

Income (Loss) Per Common Share

Income (Loss) Per Common Share

No adjustments were made to income for the purpose of calculating earnings (loss) per share, as there were no potential dilutive shares outstanding.

Income Taxes

The Company elected to be taxed as a Real Estate Investment Trust (REIT). Accordingly, the Company is not subject to Federal income tax to the extent of distributions to its shareholders if the Company meets all the requirements under the REIT provisions of the Internal Revenue Code.

The Company evaluated its recognition of income tax benefits using a two-step approach to recognizing and measuring tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a REIT, the Company does not have any significant tax uncertainties that would require recognition or disclosure.

Subsequent Events

Subsequent Events

The Company has evaluated events and transaction through the date the financial statements were available to be issued. No material events or transactions occurred in the time period referenced above requiring adjustment to or disclosure in the December 31, 2016 financial statements.

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Summary Of Significant Accounting Policies (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Accounting Policies [Abstract]

Allowance For Credit Losses

Balance at December 31, 2016	$	1,311,983
Provision for additional losses		51,799
Balance at June 30, 2017	$	1,363,782

	2016			2015
Balance at beginning of year	$	1,204,833		$	1,177,231
Provision for losses on mortgage loans receivable		155,056			188,634
Reclassified to real estate held for sale		(29,806	)		—
Charge-offs		(18,100	)		(161,032	)
Balance at end of year	$	1,311,983		$	1,204,833

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurement Bond Portfolio

				Fair Value Measurement
June 30, 2017		Fair Value		Level 3
Bond portfolio	$	13,046,616	$	13,046,616

				Fair Value Measurement
December 31, 2016		Fair Value		Level 3
Bond portfolio	$	11,482,616	$	11,482,616

Change In Fair Value Bond Portfolio

		Bond Portfolio
Balance at December 31, 2016	$	11,482,616
Purchases		1,621,000
Proceeds		(57,000	)
Balance at June 30, 2017	$	13,046,616

Fair Value Financial Instruments

	June 30, 2017
	Level 1		Level 2		Level 3		Fair Value at June 30, 2017
Impaired Loans	$	—	$	—	$	1,172,294	$	1,172,294
Real estate held for resale		—		—		225,872		225,872
	$	—	$	—	$	1,398,166	$	1,398,166

	December 31, 2016
	Level 1		Level 2		Level 3		Fair Value at December 31, 2016
Impaired Loans	$	—	$	—	$	1,189,873	$	1,189,873
Real estate held for resale		—		—		340,872		340,872
	$	—	$	—	$	1,530,745	$	1,530,745

Changes In Fair Value Financial Instruments

		Impaired Loans			Real Estate Held for Sale
Balance at December 31, 2016	$	1,189,873		$	340,872
Additions		7,036			—
Dispositions		—			(115,000	)
Provision for other than temporary losses		(24,615	)		—
Balance at June 30, 2017	$	1,172,294		$	225,872

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Mortgage Loans Receivable and Bond Portfolio (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Mortgage Loans Receivable and Bond Portfolio

	Mortgage Loans	Bond Portfolio
July 1, 2017 through June 30, 2018	$     1,868,411	$  131,000
July 1, 2018 through December 31, 2018	2,742,724	83,000
2019	1,301,152	155,000
2020	1,362,089	168,000
2021	784,343	236,000
Thereafter	17,072,260	12,731,616
	25,130,979	13,504,616
Less loan loss and bond other than temporary impairment	(1,363,782)	(458,000)
Less deferred origination income	(319,949)	______-__
Totals	$23,447,248	$ 13,046,616

	Mortgage Loans	Bond Portfolio
2017	$    790,083	$    111,000
2018	3,283,240	139,000
2019	1,326,144	144,000
2020	1,389,493	156,000
2021	814,392	221,000
Thereafter	17,128,928	11,169,616
	24,732,280	11,940,616
Less loan loss and other than temporary impairment on bonds allowance	(1,311,983)	(458,000)
Less deferred origination income	(298,499)	___-____
Totals	$23,121,798	$11,482,616

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Secured Investor Certificates (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Maturity Schedule Secured Investor Certificates

July 1, 2017 through June 30, 2018	$    1,461,000
July 1, 2018 through December 31, 2018	3,539,000
2019	2,333,000
2020	4,062,000
2021	1,928,000
Thereafter	14,140,000
Totals	$27,463,000

2017	$  2,803,000
2018	4,116,000
2019	2,333,000
2020	4,058,000
2021	1,928,000
Thereafter	12,686,000
Totals	$27,924,000

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Provision for Income Taxes

	2016			2015
Tax based on statutory rates	$	(114,650	)	$	(13,000	)
Tax effect on realized losses on properties		(361,276	)		—
Benefit of REIT distributions		475,926			13,000
Total tax provision	$	—		$	—

Deferred Income Tax Assets

	2016			2015
Loan origination fees	$	101,490		$	114,017
Loan and bond loss provisions		446,074			477,643
Real-estate impairment		94,254			271,984
Valuation allowance		(641,818	)		(863,644	)
Deferred income tax asset, net	$	—		$	—

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Fair Value Financial Instruments (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2017

Dec. 31, 2016

Notes to Financial Statements

Estimated Fair Value Financial Instruments

	June 30, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and equivalents	$	963,383	$	963,383	$	3,382,994	$	3,382,994
Accounts receivable		237,509		237,509		219,352		219,352
Interest receivable		178,477		178,477		175,912		175,912
Mortgage loans receivable		23,227,248		27,494,751		24,732,280		25,646,901
Bond portfolio		13,046,616		13,046,616		11,940,616		11,940,616
Secured investor certificates		27,463,000		33,746,095		27,924,000		35,415,944

	December 31, 2016		December 31, 2015
	Carrying	Fair	Carrying	Fair
	Amount	Value	Amount	Value
Cash and equivalents	$   3,382,994	$   3,382,994	$   4,377,110	$   4,377,110
Accounts receivable	219,352	219,352	189,609	189,609
Interest receivable	175,912	175,912	172,169	172,169
Mortgage loans receivable	24,732,280	25,646,901	25,354,876	29,054,399
Bond portfolio	11,940,616	11,940,616	10,713,428	10,713,428
Secured investor certificates	27,924,000	35,415,944	28,246,000	36,995,152

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Summary of Significant Accounting Policies - Allowance For Credit Losses (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
Accounting Policies [Abstract]
Balance at December 31, 2016	$ 1,311,983
Provision for additional losses	51,799
Balance at June 30, 2017	$ 1,363,782

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Summary Of Significant Accounting Policies - Allowance For Mortgage loans (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Balance at beginning of year	$ (57,663)	$ 1,177,231
Provision for additional losses	155,056	188,634
Reclassifed to real estate held for sale	(29,806)
Charge-offs	(18,100)	(161,032)
Balance at end of year	$ (41,912)	$ (57,663)

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Fair Value Measurements - Fair Value Measurement Bond Portfolio (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Gross Bond portfolio	$ 13,046,616
Impaired Loans
Gross Bond portfolio	$ 13,046,616	$ 11,482,616

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Fair Value Measurements - Change In Fair Value Bond Portfolio (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
Fair Value Disclosures [Abstract]
Bond Purchases	$ 1,621,000
Bond Proceeds	(57,000)
Balance at March 31, 2017	$ 13,046,616

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Fair Value Measurements - Fair Value Financial Instruments (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Impaired Loans	$ 1,172,294	$ 1,189,873
Real estate held for resale	225,872	340,872
Total Fair Value Measurement	1,398,166	1,530,475
Fair Value Level Measurement Level 1
Impaired Loans
Real estate held for resale
Total Fair Value Measurement
Fair Value Level Measurement Level 2
Impaired Loans
Real estate held for resale
Total Fair Value Measurement
Impaired Loans
Impaired Loans	1,172,294	1,189,873
Real estate held for resale	225,872	340,872
Total Fair Value Measurement	$ 1,398,166	$ 1,530,745

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Fair Value Measurements - Changes In Fair Value Financial Instruments (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
Real Estate Held For Sale
Balance at December 31, 2016	$ 340,872
Dispositions/Proceeds	(115,000)
Impairment for other than temporary losses
Balance At June 30, 2017	225,872
Impaired Loans
Balance at December 31, 2016	1,189,873
Additions	7,036
Dispositions/Proceeds
Impairment for other than temporary losses	(24,615)
Balance At June 30, 2017	$ 1,172,294

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Mortgage Loans Receivable and Bond Portfolio - Mortgage Loans Receivable and Bond Portfolio (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Mortgage loans
July 1, 2017 through June 30, 2018	$ 1,868,411	$ 790,083
July 1, 2018 through December 31, 2018	2,742,724	3,283,240
2019	1,301,152	1,326,144
2020	1,362,089	1,389,493
2021	784,343	814,392
Thereafter	17,072,260	17,128,928
Subtotal	25,130,979	24,732,280
Less loan loss and bond loss allowances	(1,363,782)	(1,311,983)
Less deferred origination income	(319,949)	(298,499)
Totals	23,447,248	23,121,798
Bond Portfolio
July 1, 2017 through June 30, 2018	131,000	111,000
July 1, 2018 through December 31, 2018	83,000	139,000
2019	155,000	144,000
2020	168,000	156,000
2021	236,000	221,000
Thereafter	12,731,616	11,169,616
Subtotal	13,504,616	11,940,616
Less loan loss and bond loss allowances	(458,000)	(458,000)
Less deferred origination income
Totals	$ 13,046,616	$ 11,482,616

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Secured Investor Certificates - Maturity Schedule Secured Investor Certificates (Details) - USD ($)	6 Months Ended		12 Months Ended							123 Months Ended	126 Months Ended
	Dec. 31, 2018	Jun. 30, 2017	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2032	Jun. 30, 2032
Secured Investor Certificate Maturity Schedule		$ 27,463,000							$ 27,924,000
Secured Investor Certificates
Secured Investor Certificate Maturity Schedule	$ 3,539,000		$ 1,928,000	$ 4,062,000	$ 2,333,000	$ 4,116,000	$ 1,461,000	$ 2,803,000		$ 12,686,000	$ 14,140,000
Secured Investor Certificate Maturity Schedule (2)				$ 4,058,000

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Fair Value Financial Instruments - Estimated Fair Value Financial Instruments (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest receivable	$ 178,477	$ 175,912	$ 172,169
Fair Value
Cash and equivalents	963,383	3,382,994	4,377,110
Accounts receivable	237,509	219,352	189,609
Interest receivable	178,477	175,912	172,169
Mortgage loans receivable	27,494,751	25,646,901	29,054,399
Bond portfolio	13,046,616	11,940,616	10,713,428
Secured investor certificates	33,746,095	35,415,944	36,995,152
Carrying Amount
Cash and equivalents	963,383	3,382,994	4,377,110
Accounts receivable	237,509	219,352	189,609
Interest receivable	178,477	175,912	172,169
Mortgage loans receivable	23,227,248	24,732,280	25,354,876
Bond portfolio	13,046,616	11,940,616	10,713,428
Secured investor certificates	$ 27,463,000	$ 27,924,000	$ 28,246,000

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Summary Of Significant Accounting Policies (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Money Market Funds	$ 629	$ 14,841		$ 2,233,533
Bond Portfolio	131,000	111,000		84,000
Allowance for Mortgage Loans Receivable	1,363,782	1,311,983		1,204,833
Loans Exceeding 90 Days Past Due	3,457,000	3,449,000		3,724,000
Loans in Default	1,226,000	1,226,000		1,779,000
Foreclosed Properties	633,000	627,000
Real Estate Held for Sale Carrying Value	225,872	340,872		697,422
Allowance Allocated to Impaired Loans	688,000	663,000		581,000
Total Loan Impairment	1,858,000	1,853,000
Additional Impairment Real Estate Held For Sale	12,000
Real Estate Sold	48,000		380,000
Realized Loss Real Estate Sold	67,000		52,000
Total Loans On Nonaccrual Status			$ 5,302,000	$ 5,503,000

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Fair Value Measurements (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Loan Loss Reserve Church Bonds	$ 458,000	$ 458,000
Loan Loss Impaired Loans		$ 19,173

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Mortgage Loans Receivable and Bond Portfolio (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Notes to Financial Statements
Mortgage Loans Receivable Gross	$ 25,130,979	$ 24,732,280	$ 25,354,876
Church Bonds Owned Gross	13,505,000	11,941,000	10,713,428
Bond Reserve Fund	458,000	458,000	200,000
Maturities and Redemptions of Bonds		395,000	145,000
Agape First Mortgage Bonds	529,000	529,000
Agape Second Mortgage Bonds	497,000	497,000
Agape First Mortgage Bonds Gross	7,200,000	7,200,000
Agape Second Mortgage Bonds Gross	715,000	715,000
Agape Distribution to Bondholders	19
Principal Balance Agape Bonds	$ 826

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Secured Investor Certificates (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Renewals Secured Investor Certificates	$ 141,000	$ 831,000	$ 174,000	$ 958,000
Secured Investor Certificatee Offering	10,000,000	10,000,000
Certificate Offering Minimal Investment	1,000	1,000
Total Secured Investor Certificates Issued Series D	7,965	7,296
Outstanding Debt Secured Investor Certificates Issued Series D	$ 7,965,000	$ 7,296,000

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Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income before Provision for Income Taxes	$ (337,207)	$ (38,234)
Dividends Declared	402,672	469,783
Tax based on Statutory Rates	(114,650)	(13,000)
Valuation Allowance	$ (222,000)	$ (64,000)