Investments Frequently Asked Questions
This is not an offer to sell our securities to you and we are not soliciting you to buy our securities. We will offer and sell our securities only in States where authorized. The offering is made solely by our OFFERING CIRCULAR.
Please note that an investment in The United Methodist Development Fund involves certain risks that are more fully described under the heading "Risk Factors" in The Fund's OFFERING CIRCULAR.
Frequently Asked Questions:
When considering how to invest your money, you try to be careful and well-informed about where and how your investment will be used. Here we have the answers to the questions that are asked most frequently by people interested in making an investment in The United Methodist Development Fund.
We hope that answering these basic questions for you will be the beginning of a relationship with The United Methodist Development Fund. This is not an offer to sell our securities to you and we are not soliciting you to buy our securities. We will offer and sell our securities only in States where authorized. The offering is made solely by our OFFERING CIRCULAR.
- What is The United Methodist Development Fund?
UMDF is a nonprofit corporation resulting from the merger in 1969 of the Methodist Investment Fund and the Evangelical United Brethren Investment Fund. Its sole purpose is to promote the mission of the United Methodist Church by providing first-mortgage loans for building, expanding and renovating United Methodist churches and mission institutions.
- Who can invest in UMDF?
Any United Methodist individual, local church, organization, board or agency may invest in The Fund.
- What investment opportunities are available from The UMDF?
The UMDF offers four investment options: a Flexible Demand investment, a One-Year Term investment, a Two-Year Term investment, a Three-Year Term investment, a Four-Year Term investment, and an Individual Retirement Account (IRA).
- What are the terms of the Flexible Demand investment?
Flexible Demand notes are payable on demand. Amounts may be added or withdrawn not more than twice a month in increments of $100.00.
- What are the terms of One-Year and Four-Year Term investments?
One-Year and Four-Year notes are payable upon their maturity date. Withdrawal prior to their maturity date carries a penalty.
- What are the terms of Individual Retirement Accounts?
IRA participants must have earned income and be under 70 years of age. IRAs are available for individuals and their spouses. Funds may be transferred directly from one IRA to another or rolled over - that is, distributed and re-deposited into another IRA within 60 days to avoid incurring federal taxes and penalties. An early distribution, if not rolled over and if paid out before a participant reaches age 59, may incur a 10% penalty tax on the taxable portion of the distribution. Exceptions include distributions due to death or disability or distributions needed to pay medical or unemployed health insurance costs. Participants should consult their tax advisors for additional information.
- How is the interest rate established?
Interest is determined periodically by The Fund's board of directors, taking into consideration the average rate of interest return from The Fund's first-mortgage loans and current interest rates paid on similar types of investments. For current rates call 1-800-862-8633.
- How are withdrawals handled?
The investor must contact The UMDF office in writing to request a withdrawal.
- If a husband and wife invest jointly, what happens if either dies?
Ownership passes automatically to the living spouse.
- I would like to set up an account for a minor. Is this possible?
Yes, a custodial account can be established under the Uniform Gift to Minors Act. For additional information on such accounts please call us.
- How secure is my investment?
Investment funds are lent to local United Methodist churches and conferences. Those loans are secured by first mortgages on property purchased or buildings constructed with the loan funds. Strict guidelines are observed to make sure that congregations can sustain such loan payments. The Fund is also required to maintain a reserve of 5% of the principal balance of The Fund's outstanding investment obligations.
Notes of The Fund are not insured by the Federal Deposit Insurance Corporation (FDIC) , or Securities Investor Protective Corporation (SIPC), or any other state or federally regulated institution.
You should also be aware that The Fund's Notes are unsecured and that The Fund may call any of its Notes at any time upon three months prior written notice.
- What are some of the options for use of the interest on my investment?
Interest income is paid directly to investors unless a different arrangement is requested. For example, interest may be reinvested in your account. If you specify in writing that you would rather have your interest income paid to your local church as part of your annual contribution or designated to the mission project of your choice, The Fund will process these payments according to your instructions.
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