United StatesSecurities and Exchange
CommissionWashington, D.C. 20549____________FORM 10-K  x ANNUAL REPORT PRUSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2008  OR  £ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ________ to ________
..  Commission File
No. 0-8117____________CHURCH LOANS & INVESTMENTS TRUST
®(Exact name of
registrant as specified in its charter)Texas

75-6030254(State or other jurisdiction ofincorporation or
organization)

(IRS EmployerIdentification No.)5305 W Interstate 40Amarillo, Texas
79106-4759(Address of principal executive office)(806)
358-3666(Issuers telephone number including area
code)____________Securities
registered pursuant to Section 12(b) of the Act: NoneSecurities
registered pursuant to Section 12(g) of the Act:Title of
Each Class

Name of each
Exchange onwhich registeredShares of
Beneficial Interest,$0.00 par value per share

NoneIndicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.Yes £ No x    Indicate
by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act.Yes £ No xIndicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.Yes x No £Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. xIndicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2
of the Exchange Act. (Check one):Large
accelerated filer £

Accelerated
filer £Non-accelerated
filer £

Smaller
reporting company xIndicate by check mark whether the registrant is a shell
company (as defined by Rule 12b-2 of the Exchange Act). Yes £ No xThe aggregate market value of voting stock held by
non-affiliates of the registrant was approximately $30,863,428as
of September 30, 2007.The number
of shares outstanding of each of the issuers classes of common stock, as
of June 25, 2008 is 10,217,094 shares of beneficial
interest.DOCUMENTS
INCORPORATED BY REFERENCENoneTransitional
Small Business Disclosure Format (check one) Yes £ No x    CHURCH LOANS & INVESTMENTS TRUST
Index To FORM 10-K
For the Year Ended March 31, 2008INDEXPagePart IItem 1.
Business
1Item 2.
Properties
3Item 3.
Legal Proceedings
3Item 4.
Submission of Matters to a Vote of Security
Holders
3Part IIItem 5.
Market for Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
3Item 6.
Selected Financial Data
4Item 7.
Managements Discussion and Analysis of Financial Condition
and Results of Operation
4Item 7(A).
Quantitative and Qualitative Disclosures About Market
Risk
14Item 8.
Financial Statements and Supplementary Data
15Item 9.
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
32Item 9A(T).
Controls and Procedures
32Item 9(B).
Other Information
32Part IIIItem 10.
Directors, Executive Officers and Corporate
Governance
32Item 11.
Executive Compensation
34Item 12.
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
35Item 13.
Certain Relationships and Related Transactions and
Director Independence
36Item 14.
Principal Accountant Fees and Services
37Part IVItem 15.
Exhibits and Financial Statement Schedules
37Signatures
39     CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)    FORWARD-LOOKING
STATEMENTS DISCLOSURE  This Annual Report
includes forward-looking statements within the meaning of the Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. All statements other than statements of historical fact
made in this discussion are forward-looking, which can be identified by the use
of forward-looking terminology such as may, will, expect, anticipate,
estimate, believe, continue or other similar words. The forward-looking
statements are based upon managements current plans and expectations and are
subject to risks and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements,
including:  


Competition in
the business of making loans to churches;


A decline in
general economic conditions;


A decline in real
estate values affecting the value of the collateral securing our
loans;


A rise in
interest rates resulting in higher cost of funds to us prior to the
re-pricing of the loans owing to us;


Our inability to
borrow funds and at reasonable rates of interest;


General risks of
lending;


Change in federal
or state laws affecting our operations;


Loss of critical
management; and


Other
risks.  These risks and
uncertainties are not intended to be exhaustive and should be read in
conjunction with other cautionary statements made in this report.   PART I   Item 1:
BUSINESS  Church Loans & Investments Trust (which we refer to in this
report as we, us, our, Church Loans, Trust and the Company) is a
real estate investment trust organized under the laws of the State of Texas in
March 1963. Although we have the authority to engage in the business of buying,
selling and leasing of real estate, we have heretofore restricted our business
activities primarily to making loans to churches and other nonprofit
organizations and assisted living centers which are secured by a first mortgage
on real estate owned by such borrowers.  The period of duration of the Trust, unless dissolved in
accordance with law, or by the consent of the owners of our shares of beneficial
interest, is perpetual. We may be dissolved by the affirmative vote of not less
than fifty percent of the owners of our outstanding shares.  The control and management of our properties, and all powers
necessary or appropriate to effect any and all of the purposes for which we are
organized, is vested in the Board of Trust Managers.  We
are qualified as a "real estate investment trust" under Sections 856-858 of the
Internal Revenue Code of 1986 as amended (the "Internal Revenue Code" or
"Code"). It is our intention to continue to qualify as a real estate investment
trust under the Code.  We
maintain an office located at 5305 I-40 West, Amarillo, TX 79106 (telephone
806/358-3666).  The number of shares of beneficial interest which we are
authorized to issue is unlimited. There are 10,217,094 issued and outstanding
shares of beneficial interest in the Trust. Shareholders Equity is $31,183,304
as of March 31, 2008.  Our primary debt obligations consist of our bank line of credit
owing to Amarillo National Bank and Master Note Agreements with various persons.
The bank line of credit with Amarillo National Bank provides for a line of
credit up to $35,000,000, and matures December 31, 2008.  As
mentioned above, we are primarily engaged in the business of making mortgage
loans to churches and other nonprofit organizations and assisted living centers.
Originally, our Declaration of Trust required a debt-  - 1 -    to-value ratio of not greater than 66 2/3%. However, at our annual
meeting of shareholders held on July 16, 2004, the shareholders approved an
Amended and Restated Declaration of Trust and Bylaws that raised the
debt-to-value ratio to 85% unless substantial justification exists because of
the presence of other underwriting criteria. Most of our present loans were made
based upon the prior 66 2/3% debt-to-value ratio. We make both long-term
mortgage loans and short-term interim or construction loans to finance the
construction of church buildings, the construction of assisted living centers,
the purchase of real estate, or the refinancing of existing indebtedness. Most
of the interim loans presently being made are associated with bond offerings of
churches and other nonprofit organizations and assisted living centers. These
interim loans are scheduled to be repaid from the proceeds of the bond
offerings.  We
are not limited to the location of the property securing any loans in which we
may invest and we seek to spread our investments in areas of the United States
where favorable yields prevail.  As
of March 31, 2008 we had 117 permanent and interim mortgage loans and
investments in church bonds having a principal balance, net of unamortized
purchase discounts, deferred commitment fees and allowance for credit losses, of
$66,145,810, with the average principal amount thereof being $565,349. The
interest rates on these loans vary from 5% to 12% per annum with the weighted
average interest rate of mortgage loans and church bonds being 8.39% per annum
at March 31, 2008. The original terms of these loans vary from one year to
thirty years, with the majority being for a term of twenty years.  During the fiscal year ending March 31, 2008, our net income was
$3,267,444, as compared to $2,669,750 in fiscal 2007, an increase of 22%. Such
increase in our net income was due to an increase in our net interest income and
an increase in other income due to the gain on the sale of other real estate
owned.  Our net income for each of the quarters during fiscal 2008 was as
follows: first quarter-$871,580; second quarter-$719,192; third
quarter-$928,031; and fourth quarter-$748,641.  Our operational expense increased from $1,261,553 during fiscal
2007 to $1,653,039 in fiscal 2008. Our operational expense included general and
administrative expenses and compensation to members of the Board of Trust
Managers.This increase is attributable to
an increase in general and administrative expenses of $390,086 or 32%. This
increase in general and administrative expenses is primarily attributable to an
increase in expenses related to other real estate owned and non-performing
loans.  During fiscal 2008, we advanced loan proceeds of $32,306,970 on 25
interim loans and 11 permanent loans. Most, if not all, of such loans bear
interest at a variable rate varying from 1.5% to 2% per annum in excess of the
prime rate of interest published by the Wall Street Journal and known as the
"Wall Street Journal Prime."  During fiscal 2008, we employed a total of 6 full time employees
and employed, as needed, 2 additional part-time persons who worked on a contract
basis.  The business conditions in which we operate have become more
competitive in the past several years as more and more banks are re-entering the
business of making loans to churches, especially loans to the more desirable,
less risky, established churches. If this trend continues, the rates and fees
which we can charge may decrease or the types of loans we make may involve more
risk. Furthermore, current economic conditions in the U.S. seem to have slowed
church building projects. Loan demand seems to have significantly softened
during fiscal 2008.  At
your request, we will provide you, without charge, a copy of any exhibits to
this Annual Report on Form 10-K. If more information is needed, please call,
write or e-mail us at:  Church Loans & Investments Trust Attn: Mr. Kelly Archer 5305 I-40 West Amarillo, Texas 79106 Telephone: (806) 358-3666 E-mail: karcher@churchloans.com   - 2 -    Our fiscal year ends on March 31. We file annual, quarterly and
other information with the Securities and Exchange Commission (the SEC). You
may read and copy any materials we file with the SEC at the SECs Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Furthermore, our SEC filings are also available to the public at
the SEC maintained internet site at http://www.sec.gov. Our internet
address is http://www.churchloans.com. Our website includes a link to the
SEC website referred to above at which our SEC filings are available.   Item
2: PROPERTIES  We
maintain as our only place of business our offices located at 5305 I-40 West, in
Amarillo, Texas. Such building is owned by us and is occupied solely by us.
There is no debt owed by us in regard to this real property.  Our real properties, net of depreciation and excluding real estate
acquired through foreclosure, are not a significant portion of our assets,
representing less than 1% of our total assets.  As
previously mentioned, our primary business is the making of mortgage loans,
almost exclusively, first mortgage loans, to churches and other nonprofit
organizations and assisted living centers. Our Bylaws, as amended, restrict our
investments to loans secured by a mortgage, deed of trust, or other lien
covering real property with the amount of such loans not to exceed 85% of the
value of the real property securing such loan. The Bylaws may be amended by
majority vote of the Board of Trust Managers. The Board of Trust Managers'
general policy is to limit investment of our assets in any one mortgage loan to
not more than approximately 20% of shareholder equity or $6,000,000. However, at
the discretion of the Board of Trust Managers, we may make and have made loans
in excess of such limit. All of our investment in mortgage loans is for the
purpose of earning income.  Item 3: LEGAL PROCEEDINGS  None.   Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  None.   PART II    Item 5: MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  (a) Market Information  There is no established public trading market for our shares of
beneficial interest. During fiscal year 2008, a total of 391,241 shares were
sold in the secondary market at prices ranging from $2.50 to $3.50 per share.
The last sale during the fiscal year was at $3.00 per share. During fiscal year
2007, a total of 262,186 shares were sold in the secondary market at prices
ranging from $3.25 to $3.90 per share.  The range of high and low bid information for shares of beneficial
interest for each quarter within the last two fiscal years is as follows:  Quarter

Fiscal 2008

Fiscal
2007High
Low

High
LowApril-June

3.50
3.30

3.50
3.25July-September

3.35
3.00

3.60
3.25October-December

3.25
3.00

3.60
3.40January-March

3.25
2.50

3.90
3.25   - 3 -    The
source of the above information is our own records. We serve as the Transfer
Agent for our shares.  (b) Holders  On March 31,
2008, there were 2,671 shareholders of Church Loans.  (c) Dividends  Cash dividends on all our outstanding shares of beneficial
interest are declared twice annually to shareholders of record as of March 31
and December 31. Dividends paid during fiscal years 2007 and 2008 were as
follows: Fiscal Year 2007: Dividend/Share $.25 per share (Based on three months
of fiscal 2006 taxable income and nine months of fiscal 2007 taxable income);
Fiscal Year 2008: Dividend/Share $.31 per share (Based on three months of fiscal
2007 taxable income and nine months of fiscal 2008 taxable income).  An
additional dividend of $.07 per share was declared in April 2008 based upon
fiscal 2008 taxable income (see Note 5 of the Notes to Financial Statements).
This additional dividend was paid during fiscal 2009 to shareholders of record
as of March 31, 2008.  (d) Securities authorized for issuance under equity compensation
plans.  None.  (e) Performance graph.  Not applicable.  (f) Sales of Unregistered Securities.  None.  (g) Report of Use of Proceeds of Sales of Recently Registered
Securities  None.  (h) Repurchases of Shares  None.   Item 6: SELECTED FINANCIAL DATA  Not applicable   Item 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION  Critical Accounting
Policies  Our accounting and
reporting policies are in accordance with accounting principles generally
accepted in the United States of America. Our significant accounting policies
are described in the notes to the financial statements. Certain accounting
policies require management to make significant estimates and assumptions, which
have a material impact on the carrying value of certain assets and liabilities,
and we consider these to be critical accounting policies. The estimates and
assumptions used are based on historical experience, as well as other factors,
which management believes to be reasonable under the circumstances. Actual
results could differ significantly from these estimates and assumptions, which
could have a material impact on the carrying value of assets and liabilities at
the balance sheet dates and results of operations for the reporting periods.  We believe that the
following critical accounting policies require the most significant estimates
and assumptions that are particularly susceptible to a significant change in the
preparation of our financial statements.  - 4 -      Revenue
Recognition. We accrue interest income as it is earned. All past due loans
are reviewed monthly by management and the Audit Committee. A past due loan is
evaluated based upon the payment history, opinion of the ultimate collectability
of the principal and interest and other experience factors. The accrual of
interest is generally discontinued on loans and church bonds more than 60 days
past due unless the credit is well secured and in process of collection. In all
cases, loans and bonds are placed on nonaccrual or charged-off at an earlier
date, if collection of principal or interest is considered doubtful.  Once a loan is placed
on non-accrual, the loan will be classified as either cash basis or capital
recovery. A loan is typically classified as cash basis if the Audit Committee
believes, based upon several factors, that there is a strong likelihood that the
principal of the loan will be recovered, but is concerned that all of the
interest will be recovered. If a loan is classified as cash basis, then
interest payments received will be applied to interest income. A loan is
typically classified as capital recovery if the Audit Committee believes,
based upon several factors, that there is a strong likelihood that we may not be
able to recover all of the principal balance of the loan. In the event that a
loan is classified as capital recovery, then payments received are applied to
principal first and then to interest.  The actual decision to
place a loan on non-accrual and the classification of the loan as either cash
basis or capital recovery is made by the Audit Committee with input from
management.  Non-accrual status
loans are returned to an accrual status when in the opinion of the Audit
Committee, based upon input from management, that such is warranted based upon
the passing of a sufficient time period during which the principal and interest
have become current and remain current and, therefore, the loan, both principal
and interest, is anticipated to be fully collectible.  Allowance for Credit
Losses. The Audit Committee reviews the allowance for credit losses at the
end of each quarter. The provision for losses is based on an amount that is
adequate, in the opinion of the Audit Committee, based upon input from
management, to absorb losses inherent in the existing portfolio. The evaluation,
which includes a review of all loans on which full collection may not be
reasonably assumed, considers among other factors, general economic conditions,
the fair market value or estimated net realizable value of the underlying
collateral securing the loan, past experience, trends in loan delinquency and
other factors that warrant recognition in providing for an adequate allowance to
absorb inherent losses. The evaluation by the Audit Committee includes a review
of a quarterly grading methodology performed by management on all past-due
loans. The Audit Committee, based upon its evaluation and review, then makes a
recommendation to the full Board of Trust Managers as to the recommended amount
of the credit loss reserve. The Board of Trust Managers, based upon the
recommendation of the Audit Committee, establishes the amount of the allowance
for credit losses and any adjustments to such allowance.  Other Real Estate
Owned. Other real estate owned (OREO) represents property acquired as a
result of a foreclosure of a mortgage note(s) held by Church Loans. OREO is
recorded at estimated fair value less cost to sell at date of foreclosure,
establishing a new cost basis. After foreclosure, OREO is carried at the lower
of the carrying amount or estimated fair value minus estimated cost to sell.
Impairment losses are charged to operations. Costs of the foreclosure, insurance
and other costs associated with carrying the property are expensed.  Management has
discussed our critical accounting policies and the development, selection and
disclosure of the estimates and alternatives with the Audit Committee of the
Board of Trust Managers and obtained their approval of the applicable
disclosures contained in this report.  Overview  Church Loans was
founded in May of 1959 and was organized to assist churches with the financing
of purchases and construction of church facilities. Church Loans has also made
loans for the financing of assisted living centers. Although we were originally
organized under the corporate structure, we reorganized in 1963 as a real estate
investment trust in order to take advantage of the favorable provisions of the
federal tax law applicable to real estate investment trusts.  Our loan portfolio
consists primarily of loans to churches and is comprised of both permanent loans
and interim construction loans. Although, we have purchased existing loans from
other lenders, our primary operating strategy is to originate, either through
mortgage loan brokers, church bond broker-dealers or directly to churches,
mortgage loans  secured by a  first mortgage against a churchs 
buildings and related  facilities. We - 5 -    rarely, if ever, sell a loan and, therefore, we intend to hold our
loan portfolio to maturity. Our underwriting standards normally include
compiled, reviewed or audited financial statements depending on the size of the
loan, a fair market value appraisal prepared by an independent appraiser, a
first mortgage on the property of the church insured by a title insurance policy
issued by a national title company, applicable fire and extended casualty
insurance on the collateral and such other requirements as determined by
management on a case by case basis. Also, as part of our due diligence,
management normally makes, prior to funding, an onsite inspection of the
property that is to secure the loan.  Originally, our
Declaration of Trust required a debt-to-value ratio of not greater than 66 2/3%.
However, at our annual meeting of shareholders held on July 16, 2004, the
shareholders approved an Amended and Restated Declaration of Trust and Bylaws
that raised the debt-to-value ratio to 85% unless substantial justification
exists because of the presence of other underwriting criteria. Most of our
present loans were made based upon the prior 66 2/3% debt-to-value ratio.  As a real estate
investment trust, we are required by Section 857 of the Internal Revenue Code,
as amended, to distribute at least 90% of our taxable net income to our
shareholders. Dividends are based on taxable income which varies from net income
reported in the financial statements because of temporary differences
(differences between the tax basis of an asset or liability and its reported
amount in the financial statements that will result in taxable or deductible
amounts in future years). Future dividends may be more or less than the net
income reported in the financial statements because of variances in these
temporary differences.  Management is
aggressively pursuing quality new loans, both interim and permanent.  Results of
Operations2008 compared to 2007  Our revenues are
derived from interest income and fees earned on loans as well as, to a lesser
degree, interest earned on church bonds and short-term investments. During the
year ended March 31, 2008, interest income and fees increased by $715,722 (11%)
over the year ended March 31, 2007.  The increase in
interest income and fees for the year ended March 31, 2008, as compared to the
year ended March 31, 2007 was primarily attributable to an increase in the loan
portfolio during a majority of this period, an increase in the weighted average
interest rate on our portfolio of loans and the recognition in income of
deferred interest and deferred commitment fees from several loans that were paid
in full during the period.  The components of our
interest income and fees during the year ended March 31, 2008 as compared to the
year ended March 31, 2007 is as follows:  Table 1  Interest
Income and Fees  For the Year
Ended
3/31/08
For the Year
Ended
3/31/07
Increase
(Decrease)Mortgage loans
$
4,477,815

$
3,710,637

$
767,178Interim loans
1,810,856

2,054,813

( 243,957)Commitment Fees
897,255

627,535

269,720Other
Income and Fees
118,876

196,095

( 77,219)Total
$
7,304,802

$
6,589,080

$
715,722  The net increase in
total interest income on mortgage loans and interim loans of $523,221 represents
an increase of 9% for the fiscal year ended March 31, 2008 as compared to the
fiscal year ended March 31, 2007. Primary contributors to this increase are the
increase in the loan portfolio during a majority of the year ended March 31,
2008 as compared to the same period ended March 31, 2007 and the increase in the
weighted average interest rate on our portfolio of loans.  - 6 -      The following table
compares our portfolio of loans, net of mortgage discounts and deferred
commitment fees, as of March 31, 2008 to March 31, 2007:  Table 2  Mortgage
Loans, Church Bonds and Interim Loans as of March 31, 2008 and 2007  Type of Loan
03/31/08
03/31/07
Increase
(Decrease)Total mortgage
and church bonds
$55,220,408
$54,225,179
$
995,229Performing
mortgage and church bonds
50,389,558
49,329,067
1,060,491Total interim
loans
12,711,879
19,344,751
(6,632,872)Performing
interim loans
11,611,879
18,244,751
(6,632,872)Total loan
portfolio
67,932,287
73,569,930
(5,637,643)Total performing
loan portfolio
62,001,437
67,573,818
(5,572,381)  Although the amount of
our mortgage loans, church bonds and interim loans decreased as of March 31,
2008 as compared to March 31, 2007, most of that decrease occurred during the
last five months of the year ended March 31, 2008. As of September 30, 2007,
total mortgage loans, church bonds and interim loans were $78,164,491 as
compared to $67,932,287 as of March 31, 2008, a decrease of $10,232,204. Most of
this is the result of a decrease in the amount of interim loans. Interim loans
decreased from $21,861,429 as of September 30, 2007 to $12,711,879 as of March
31, 2008, a decrease of $9,149,550. Mortgage loans, exclusive of church bonds
and before purchase discounts, decreased slightly from $57,245,714 to
$57,186,949 during this same period.  Therefore, although the
total amount of mortgage loans, church bonds and interim loans decreased as of
March 31, 2008 as compared to March 31, 2007, for the first 7 months of the year
ended March 31, 2008, the amount of our loan portfolio was at levels actually
higher than the same period during the year ended March 31, 2007. This increase
contributed to the increase in interest income and fees for the period ended
March 31, 2008.  In fact, the monthly
average amount of the portfolio for the year ended March 31, 2008 was
$74,145,281 as compared to $72,764,480 for the year ended March 31, 2007.
Therefore, the monthly average of our loan portfolio was $1,380,801 higher than
in fiscal 2007. See Table 3 below.  Table 3  Month-End
Portfolio Values  Month
Fiscal
2008


Fiscal
2007


DifferenceApril
$76,633,365


$71,229,693


$5,403,672May
74,402,362


70,033,131


4,369,231June
77,318,596


70,085,315


7,233,281July
77,050,258


73,924,739


3,125,519August
78,632,092


72,284,878


6,347,214September
78,164,491


70,099,127


8,065,364October
76,550,786


69,749,027


6,801,759November
74,278,746


76,880,831


(2,602,085)December
71,740,455


78,395,673


(6,655,218)January
68,258,173


73,521,539


(5,263,366)February
68,781,764


73,399,875


(4,618,111)March
67,932,287


73,569,930


(5,637,643)Monthly
Average:
$74,145,281


$72,764,480


$1,380,801   - 7 -    Non-performing loans, church bonds and interim loans decreased
slightly from $5,996,112 as of March 31, 2007 to $5,930,850 as of March 31,
2008, a decrease of $65,262. The accrual of interest on these loans has been
discontinued. If interest on these mortgage loans, church bonds and interim
loans had been accrued as earned, interest and fees on loans would have been
increased by approximately $458,000 and $350,000 for the years ended March 31,
2008 and 2007, respectively. Interest income actually recognized on such loans
during 2008 and 2007 was approximately $175,000 and $290,000, respectively.  The weighted average
interest rate on our loans and church bonds increased from 8.31% as of March 31,
2007 to 8.39% as of March 31, 2008. This increase in the weighted average
interest rate on our loans contributed to the increase in our interest income
during fiscal 2008 as compared to fiscal 2007.  Table 4  Weighted
Average Interest Rates on Our Loan Portfolio For Each Month in the Years Ended
March 31, 2008 and March 31, 2007   Month
Fiscal
2008


Fiscal
2007


DifferenceApril
8.31


7.88


.43May
8.37


7.94


.43June
8.45


8.01


.44July
8.49


8.19


.30August
8.57


8.17


.40September
8.57


8.12


.45October
8.51


8.12


.39November
8.54


8.28


.26December
8.51


8.35


.16January
8.36


8.28


.08February
8.35


8.29


.06March
8.39


8.31


.08   Commitment fees earned
during the year ended March 31, 2008 were $897,255 as compared to $627,535 for
the year ended March 31, 2007, an increase of $269,720 or 43%. Included in the
commitment fees earned during fiscal 2008 are $273,338of deferred
commitment fees recognized from 8 loan payoffs during fiscal 2008 and commitment
fees recognized as income upon the favorable resolution of certain litigation
involving a commitment.  Net income for the year
ended March 31, 2008 was $3,267,444 ($.32 per share), an increase of $597,694
(22%) as compared to the year ended March 31, 2007. This increase was primarily
attributable to the increase in net interest income and to an increase in other
income due to the gain on the sale of other real estate owned.  Net interest income
increased from $3,808,041 for the year ended March 31, 2007 to $4,554,883 for
the year ended March 31, 2008, an increase of $746,842 (20%). This increase in
our net interest income for the year ended March 31, 2008 as compared to the
year ended March 31, 2007 was primarily the result of an increase in our
interest income and fees.  Our total liabilities
decreased from $43,895,791 as of March 31, 2007 to $37,673,019 as of March 31,
2008. Furthermore, the weighted average interest rate on our debt decreased from
6.96% as of March 31, 2007 to 4.73% as of March 31, 2008. Our interest expense
decreased slightly from $2,781,039 for the year ended March 31, 2007 to
$2,749,919 for the year ended March 31, 2008, a decrease of $31,120 or 1%.  Although our interest
expense for the year ended March 31, 2008 is slightly less than for the same
period ended March 31, 2007, for the first 6 months of the year ended March 31,
2008, the weighted average interest on our debt was higher than the same period
for the year ended March 31, 2007. Likewise, for the first 7 months of the year
ended March 31, 2008, our total debt was higher than for the same months in the
year ended March 31, 2007. We greatly benefited from the significant drop in
interest rates during the last 6 months of the fiscal year ended March 31, 2008
and the reduction in our debt during the last 5 months of fiscal 2008. These
lower rates and our lower debt more than offset the higher rates and higher debt
during the first part of fiscal 2008.   - 8 -    The following table sets forth the weighted average interest rates
on our debt for each month during the year ended March 31, 2008 as compared to
same period ending March 31, 2007:  Table 5 - Weighted
Average Interest Rates on All Debt For Each Month in the Years Ended March 31,
2008 and March 31, 2007  Month

Fiscal
2008

Fiscal
2007

DifferenceApril


6.96


6.64


.32May


6.96


6.64


.32June


6.96


6.75


.21July


6.96


6.73


.23August


6.96


6.75


.21September


7.13


6.96


.17October


6.60


6.96


(.36)November


6.27


6.96


(.69)December


6.35


6.98


(.63)January


6.06


6.98


(.92)February


4.75


6.98


(2.23)March


4.73


6.96


(2.23)   The following table
illustrates the average month end liabilities for the year ended March 31, 2008
as compared to the same period ended March 31, 2007:  Table 6 - Month End
Total Liabilities for Each Month in the Fiscal Years Ended March 31, 2008 and
March 31, 2007  Month
Fiscal
2008

Fiscal
2007

DifferenceApril
$47,284,800


$40,992,486


$6,292,314May
44,867,392


39,568,409


5,298,983June
47,709,101


39,765,951


7,943,150July
47,063,265


42,868,388


4,194,877August
48,301,384


40,972,473


7,328,911September
47,651,214


38,752,834


8,898,380October
44,946,863


38,084,238


6,862,625November
42,493,993


45,957,216


(3,463,223)December
42,143,907


48,304,871


(6,160,964)January
36,229,570


43,755,936


(7,526,366)February
38,439,461


43,919,606


(5,480,145)March
37,673,019


43,895,791


(6,222,772)Monthly
Average:
$43,733,664


$42,236,516


$1,497,148  General and
administrative expenses increased from $1,211,253 for the year ended March 31,
2007 to $1,601,339 for the year ended March 31, 2008, an increase of $390,086 or
32%. This increase in general and administrative expenses is primarily
attributable to the payment of insurance, property taxes, attorneys fees and
other expenses relating to property held as a result of the foreclosure of
defaulted loans.  Other income increased
from $167,809 for the year ended March 31, 2007 to $554,958 for the year ended
March 31, 2008, an increase of $387,149. Contributing to this increase is the
recognition of gain of $508,555 from the sale of property located in Bronx, NY
that was obtained through foreclosure of a defaulted loan.  Also decreasing net
income was the $125,000 additional provision for credit losses made during the
year ended March 31, 2008. Pursuant to the Audit Committees quarterly review of
the credit loss reserve, the Audit Committee recommended and the Board of Trust
Managers accepted an additional allocation of $125,000 to our provision for
credit losses effective for the year ended March 31, 2008. This action was
primarily needed in order to provide adequately for losses on two defaulted
loans in which we owned participating interests.   - 9 -    As of March 31, 2008, there were 10,217,094 shares of certificates
of beneficial interest outstanding. Net income per share increased from $.26 per
share for the year ended March 31, 2007 as compared to $.32 per share for the
year ended March 31, 2008. This increase was attributable to the increase in our
net income discussed above.  Results of
Operations2007 compared to 2006  During the fiscal year
ended March 31, 2007, interest income and fees increased by $301,713 (5%) over
the previous fiscal year. The increase in interest income and fees was primarily
the result of an increase in the average interest rate on our loan portfolio for
the year ended March 31, 2007 as compared to the year ended March 31, 2006.  The components of our
interest income and fees during the year ended March 31, 2007 as compared to the
year ended March 31, 2006 are as follows:  Table 1  Interest
Income and Fees  For the
YearEnded 03/31/07
For the
YearEnded 03/31/06
Increase(Decrease)Mortgage loans
$
3,710,637

$
3,087,813

$
622,824Interim loans
2,054,813

1,917,602

137,211Commitment Fees
627,535

708,897

( 81,362)Other
Income and Fees
196,095

573,055

( 376,960)Total
$
6,589,080

$
6,287,367

$
301,713  The increase in total
interest income on mortgage loans and interim loans of $760,035 represents an
increase of 15% for the fiscal year ended March 31, 2007 as compared to the
fiscal year ended March 31, 2006. This increase in interest income was primarily
the result of the increase in the average rate of interest on our portfolio of
loans during the year ended March 31, 2007 as compared to the year ended March
31, 2006.  The following table
compares our portfolio of loans, net of mortgage discounts and deferred
commitment fees, as of March 31, 2007 to March 31, 2006:  Table 2  Mortgage
Loans, Church Bonds and Interim Loans as of March 31, 2007 and 2006  Type of Loan
03/31/07
03/31/06
Increase
(Decrease)Total mortgage loans, church
bonds and interim loans
$73,569,930

$69,859,415

$
3,710,515Performing
mortgage and church bonds
49,329,067

47,768,224

1,560,843Performing
interim loans
18,244,751

20,131,741

(1,886,990)Total performing
loan portfolio
67,573,818

67,899,965

(326,147)   Non-performing loans
increased from $1,959,450 as of March 31, 2006, to $5,996,112 as of March 31,
2007. Interest income which would have been recorded under the original terms of
these loans and church bonds amounted to approximately $350,000 for the year
ended March 31, 2007 as compared to $97,000 for the year ended March 31, 2006.
Interest income actually recognized on these loans and church bonds was $290,000
and $46,000 for the years ended March 31, 2007 and March 31, 2006,
respectively.   - 10 -    The increase in our loan portfolio is evidenced by the difference
in our investment in mortgage and interim loans and bonds during fiscal 2007 of
$36,390,077 as compared to the payments we received on our loan portfolio during
fiscal 2007 in the amount of $31,241,440.  The increase in
interest income and fees was primarily the result of the increase in the
interest rate on our loan portfolio. The average interest rate on our portfolio
of loans and church bonds increased from 7.82% as of March 31, 2006 to 8.31% as
of March 31, 2007. The following table compares the average interest rates on
our loan portfolio for each month in the years ended March 31, 2007 and March
31, 2006:  Table 3  Weighted
Average Interest Rates on Our Loan Portfolio For Each Month in the Years Ended
March 31, 2007 and March 31, 2006  Month
Fiscal
2007


Fiscal
2006


DifferenceApril
7.88


7.47


.41May
7.94


7.55


.39June
8.01


7.82


.19July
8.19


7.82


.37August
8.17


7.89


.28September
8.12


8.24


(.12)October
8.12


7.93


.19November
8.28


7.91


.37December
8.35


8.12


.23January
8.28


7.83


.45February
8.29


7.83


.46March
8.31


7.82


.49  The average interest
rate on our total indebtedness increased from 6.64% as of March 31, 2006 to
6.96% as of March 31, 2007. Therefore, our net interest rate margin increased
from 1.18% as of March 31, 2006 to 1.35% as of March 31, 2007, an increase of 17
basis points.  Our net income for
fiscal 2007 was $2,669,750, a decrease of $567,200 (18%) from the previous
fiscal year. Such decrease was primarily attributable to a decrease in our net
interest income. Net interest income decreased from $4,314,996 in fiscal 2006 to
$3,808,041 in fiscal 2007, a decrease of $506,955 (12%) from fiscal 2006. The
decrease in net interest income resulted from the increase in interest expense.
Interest expense increased from $1,972,371 for the year ended March 31, 2006 to
$2,781,039 for the year ended March 31, 2007, an increase of $808,668 (41%).  Total operating
expenses increased from $1,091,909 for the fiscal year ended March 31, 2006 to
$1,261,553 for the fiscal year ended March 31, 2007, an increase of $169,644 or
16%. This increase is attributable to an increase in general and administrative
expenses of $169,379 or 16%. This increase in general and administrative
expenses is primarily attributable to an increase in expenses related to other
real estate owned and non-performing loans.  Income from the
realization of loan discounts from loan purchases decreased from $472,356 for
the year ended March 31, 2006, to $22,947 for the year ended March 31, 2007, a
decrease of $449,409. The rather large amount of income from the realization of
loan discounts in the year ended March 31, 2006 was primarily the result of the
payment of one loan resulting in the recognition of $395,961 in income for the
year ended March 31, 2006. This income, which is included in interest income,
was characterized as discounted income on mortgage loans since this loan was
acquired by us at a price below the principal balance of the loan.  Other income increased
from $87,817 for fiscal 2006 to $167,809 for fiscal 2007.Included in
fiscal year 2007 other income is a deferred gain of approximately $91,000 from
the payoff of a church loan in Trenton, New Jersey.  As of March 31, 2007
there were 10,217,094 shares of certificates of beneficial interest outstanding.
Net income per share decreased from $.32 per share for the year ended March 31,
2006 to $.26 per share for the year ended March 31, 2007. This decrease was
attributable to the decrease in our net income discussed above.  - 11 -      Liquidity and
Capital Resources  Liquidity is a
measurement of our ability to meet potential cash requirements, including the
repayment of borrowings by us, fund loan commitments, maintain investments and
meet our general business expenses and needs. Additionally, to maintain our
status as a REIT under the Internal Revenue Code, we must distribute annually at
least 90% of our REIT taxable income.  We are engaged
primarily in the business of making permanent and interim loans to churches and
other non-profit organizations, and to other borrowers, including businesses
engaged in the building and operation of assisted living centers. At March 31,
2008 we had seven loans to three different borrowers which are secured by
assisted living centers and commercial properties which totaled approximately
$11,462,000. Our assets primarily consist of our loan portfolio, real estate
acquired through foreclosure and our office building and facilities.  Our operating expenses
are comprised of the maintenance of our office building, the payment of the
salaries of our management and support staff, office expenses, fees paid to the
Board of Trust Managers, and the payment for legal and accounting services.
Substantially all of our assets are invested in the permanent and interim loans.
Our only potential liquidity problems relate to the timely and proper repayment
of the leveraged funds we have borrowed to make loans in excess of our capital
and the ability to fund loan commitments which totaled approximately $14,868,000
at March 31, 2008.  Our primary sources of
funds for liquidity consist of cash reserves, net cash provided by operations,
payments received from the loans comprising our loan portfolio, and funds
available through debt financing, including our line of credit agreement with
the Amarillo National Bank.  Our level of liquidity
based upon cash and cash equivalents increased by $14,575 during the year ended
March 31, 2008. During this same period, we invested $32,306,970 in mortgage and
interim construction loans using net cash provided by operating activities in
the amount of $1,881,000, principal payments received on our loan portfolio in
the amount of $38,751,423, payments received on other notes receivables of
$1,000 and proceeds from the sale of other real estate owned of $1,025,000. The
total liquidity available to invest in mortgage and interim construction loans
was reduced by $3,167,300 paid in cash dividends during the year ended March 31,
2008 and the reduction in our borrowings on our bank line of credit and Master
Note agreements in the amount of $6,169,578.  Our primary debt
obligations consist of our bank line of credit owing to Amarillo National Bank
and Master Note Agreements with various persons. Pursuant to our January 31,
2006 loan agreement with the bank, we have a $35,000,000 line of credit for a
term of three years, maturing December 31, 2008.  As of March 31, 2008,
our total liabilities outstanding were $37,673,019. The amount owing on the line
of credit as of March 31, 2008 was $12,903,000. It is anticipated that the line
of credit will be renewed at the expiration of such three-year term. In the
event that the bank elects not to renew the line of credit, we may, under the
terms of the loan agreement, retire the line of credit over a period of time,
not to exceed five years, equal to the weighted average remaining term of a pool
of our real estate lien notes which would be pledged to secure the remaining
balance of the bank line of credit.  At March 31, 2008,
loans to us under Master Note Agreements, which are in effect demand notes,
totaled $24,537,391. In the past, we have utilized our bank line of credit and
the principal paid to us upon our outstanding loan portfolio in order to meet
our maturing obligations.  Although our cash and
cash equivalents as of March 31, 2008 were only $109,987, the balance which
could be borrowed by us upon our bank line of credit as of March 31, 2008 was
$22,097,000. The principal payments scheduled to be received on our loan
portfolio for the fiscal year ending March 31, 2009 are $13,613,073. Assuming
all of these scheduled principal payments are received, these payments, together
with the balance available to us on our bank line of credit, would not provide
us with sufficient funds to meet our maturing obligations and fund loan
commitments without the necessity of borrowing funds from other sources. Based
upon our success in obtaining borrowings in the past, we are confident that,
should it be necessary, we will be able to obtain additional bank financing in
the future in sufficient amounts for us to timely meet all of our
obligations.   - 12 -    Should all the scheduled principal payments upon loans not be
received, and should we be unable to borrow against our line of credit, and
should borrowings from other sources not be available, it would be necessary to
sell a portion of our mortgage loan portfolio in order to meet all of our
financial obligations. At March 31, 2008, the principal balance of our loan and
church bond portfolio was $67,932,287, net of unamortized purchase discounts and
deferred commitment fees. The weighted average interest rate on loans and church
bonds was 8.39% per annum. In view of the normal marketability of conventional
loans, we might be required to discount a majority of these loans in order for
them to be attractive for purchase. The principal amount of these loans if
discounted to yield a weighted average interest rate of 12%, 14% and 16% would
be $47,495,991, $40,710,850, and $35,621,994, respectively. There is no
assurance that we would be able to sell all, or a portion of, our portfolio of
loans, in which event, it would be necessary to secure a loan, or loans, from a
lender in order to meet our financial obligations. There is no assurance that we
would be able to secure a loan in such instance. We have sold only one of our
loans in our mortgage loan portfolio and, therefore, have limited experience in
this area. Furthermore, if required to discount our loans in excess of 15.13%,
then we would not realize sufficient funds from the sale of the loans to retire
all of our debt.  Principal payments
scheduled to be received upon our permanent loan portfolio during the year
ending March 31, 2009, if not used to fund new loan commitments, would be used
to reduce our outstanding indebtedness. Should we use the payments of principal
which shall be received upon our loan portfolio to reduce our outstanding
indebtedness, our interest expense will decrease. In such instance, whether the
decrease in the interest income will exceed, or be less than, the decrease in
the interest expense will largely be dependent upon the prime rate of interest
prevailing at such time due to the fact that the interest to be earned upon our
mortgage loan portfolio is generally based upon a fixed rate of interest or a
variable rate of interest that periodically reprices, while the interest to be
paid upon our outstanding debts is directly, or indirectly, tied to the prime
rate of interest charged by major banks.  Pursuant to the loan
agreement with the bank, we have pledged all of our mortgage loans, church bonds
and interim construction loans to the bank to secure the line of credit. The
amount owing on the line of credit must not exceed an amount equal to 85% of the
outstanding principal amount of the performing mortgage loans and church bonds
and 50% of the outstanding principal amount of the performing interim
construction loans. Applying that borrowing limit to our loan portfolio as of
March 31, 2008, we can borrow up to the entire $35,000,000 line of credit limit.
However, during the term of the new loan agreement, we would not have the right
to sell our loans, without the banks consent, since all of our loans have been
pledged to the bank to secure the line of credit. Therefore, under our new loan
agreement, it will be very difficult, if not impossible, to sell our loans to
meet our financial obligations.  Cash flows from
operating activities consist primarily of net income. The primary components of
net income are interest income and expense. Interest income should continue to
be the main source of cash provided by operating activities; however, the
availability of this cash flow is dependent upon the ability of the borrowers to
repay loans. Cash provided by operating activities has been and is expected to
be a relatively stable source of cash flow.  Cash flows from
investing activities results primarily from investment in and payments received
on mortgage and interim construction loans and church bonds.  Cash flows from
financing activities relate primarily to the borrowings and payments on notes
payable and the line of credit. Borrowings are made as funds are needed to make
loans or as current obligations become due. Based upon our success to obtain
borrowings in the past, we are confident that we will be able to obtain
borrowings in the future in sufficient amounts, along with payments to be
received on loans, to timely meet our obligations.  Inflation  At March 31, 2008, the
weighted average interest rate on our mortgage loan and church bond portfolio
was 8.39% per annum while the weighted average interest rate upon all our
borrowings was 4.73% per annum resulting in a net interest rate margin of 3.66%.
By comparison, as of March 31, 2007, the weighted average interest rate on our
mortgage loan and church bond portfolio was 8.31% per annum while the weighted
average interest rate on our borrowings was 6.96% per annum resulting in a net
interest rate margin of 1.35% per annum. Therefore, our net interest rate margin
has increased by 231 basis points during the year ending March 31, 2008 as
compared to March 31, 2007. Although a majority of the loans constituting our
loan portfolio have been made at rates of interest that generally reprice either
daily, annually, or otherwise periodically, a portion of the loans constituting
our loan portfolio have been made at fixed rates of interest and therefore are
not subject to  being  increased  or  decreased  during
the  term of  the  loan.  All of  our 
indebtedness is  either directly or  - 13 -    indirectly tied to the prime rate of interest charged by major
banking institutions and, therefore, is subject to fluctuation.  During periods of
inflation, the prime rate of interest charged by major banking institutions, as
well as the interest rate or cost of borrowing money from any lender, generally
increases. Consequently, during an inflationary period our interest expense
would increase. Since our interest income would not increase as rapidly, an
increase in the interest expense would decrease our net income. However,
interest income should subsequently increase as variable rate loans reprice.  Should the amount of
our loans and the amount of our indebtedness remain constant, and should the
weighted average interest rate upon the indebtedness increase to approximately
15.13% per annum, interest income and interest expense would be substantially
equal.  Under the terms of the
loan agreement with Amarillo National Bank effective January 1, 2006, the
interest rate on our line of credit adjusts in accordance with the lesser of the
30-day, 60-day, 90-day or 180-day London Interbank Offered Rates (LIBOR) or
the J.P. Morgan Chase & Co. prime rate. The interest rate on our Master Note
Agreements adjusts as and when the Prime Rate as published by the Wall Street
Journal changes. Most of our loans are made on interest rates that are tied to
the Prime Rate as published by the Wall Street Journal or a similar index used
by major U.S. banking institutions. Therefore, our cost of funds should be tied
to an index that is equal to or less than the index used to price our loan
portfolio.  Off-Balance Sheet
Arrangements  We have no off-balance
sheet arrangements or commitments other than our normal loan commitments.  New Accounting
Standards  We do not believe the
adoption of any recently issued pronouncements by the Financial Accounting
Standards Board will have a significant impact on its financial statements.   Item 7A:
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Not applicable.    - 14 -    Item 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  Managements Report
on Internal Control over Financial Reporting  The management of
Church Loans & Investments Trust (the Company) is responsible for
establishing and maintaining adequate internal control over financial reporting
for the Company. The Companys internal control over financial reporting is a
process designed under the supervision of the Companys Chief Executive Officer
and Chief Financial Officer to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of the Companys
financial statements for external reporting purposes in accordance with U.S.
generally accepted accounting principles. The Companys management has made a
comprehensive review, evaluation and assessment of the Companys internal
control over financial reporting as of March 31, 2008. In making its assessment
of internal control over financial reporting, the Companys management used the
criteria issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. In accordance with
Section 404 of the Sarbanes-Oxley Act of 2002, the management of the Company
makes the following assertions:  Management has
implemented a process to monitor and assess both the design and operating
effectiveness of internal control over financial reporting.  All internal control
systems, no matter how well designed, have inherent limitations. Therefore, even
those systems determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and presentation.  The Companys
management assessed the effectiveness of the Companys internal control over
financial reporting as of March 31, 2008. In making this assessment, it used the
criteria set forth by COSO in Internal Control-Integrated Framework. Based on
that assessment, management believes that, as of March 31, 2008, the Companys
internal control over financial reporting is effective based on those criteria.  The Companys Annual
Report on Form 10-K for the period ended March 31, 2008 does not include an
attestation report of the Companys registered public accounting firm regarding
internal control over financial reporting. Managements report was not subject
to attestation by the Companys registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit the
Company to provide only managements report in the Annual Report on Form 10-K
for the period ended March 31, 2008.   /s/ Kelly
Archer Kelly Archer President and
CEO (Principal
Executive Officer)   /s/ Robert
Fowler Robert Fowler Senior
Vice-President and CFO (Principal
Financial and Accounting Officer)  - 15 -           Report of Independent
Registered Public Accounting Firm   The Board of Trust Managers and
Shareholders Church Loans & Investments
Trust Amarillo, Texas  We have audited the
accompanying balance sheets of Church Loans & Investments Trust (a real
estate investment trust) as of March 31, 2008 and 2007, and the related
statements of income, shareholders' equity, and cash flows for each of the years
in the three-year period ended March 31, 2008. 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 audit included consideration of 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 also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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 Church Loans & Investments Trust as of March 31,
2008 and 2007, and the results of its operations and its cash flows for each of
the years in the three-year period ended March 31, 2008 in conformity with
accounting principles generally accepted in the United States of America.  Clifton Gunderson LLP  Amarillo, Texas June 25, 2008  - 16 -     CHURCH LOANS
& INVESTMENTS TRUST(A Real Estate
Investment Trust)BALANCE
SHEETSMarch 31, 2008
and 2007ASSETS  2008


2007CASH
AND CASH EQUIVALENTS

$
109,987

$
95,412RECEIVABLESMortgage
loans and church bonds  performing


50,389,558


49,329,067Interim
construction loans  performing


11,611,879


18,244,751Nonperforming
mortgage loans, church bonds and interim construction loans


5,930,850


5,996,112Less:
Allowance for credit losses


(1,786,477)


(1,713,249)66,145,810


71,856,681Accrued
interest receivable


608,930


514,175Notes
receivable


2,000


3,000Net
receivables


66,756,740


72,373,856PROPERTY
AND EQUIPMENT,net of accumulateddepreciation of $536,136 and
$534,072 in 2008and 2007, respectively


216,996


219,060OTHER
REAL ESTATE OWNED


1,735,650


2,252,095OTHER
ASSETS


36,950


38,528TOTAL
ASSETS

$
68,856,323

$
74,978,951LIABILITIES AND
SHAREHOLDERS EQUITYLIABILITIESNotes
payable and line of credit:Related
parties

$
13,059,425

$
11,994,086Other


24,380,966


31,615,88337,440,391


43,609,969Accrued
interest payable


49,617


122,248Other


183,011


163,574Total
liabilities


37,673,019


43,895,791SHAREHOLDERS
EQUITYShares
of beneficial interest, no par value; authorizedshares unlimited,
10,223,690 shares issued


29,762,291


29,762,291Undistributed
net income


1,437,503


1,337,359Treasury
shares, at cost (6,596 shares)


(16,490)


(16,490)Total
shareholders equity


31,183,304


31,083,160TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY

$
68,856,323

$
74,978,951These financial
statements should be read only in connection withthe accompanying
summary of significant accounting policiesand notes to financial
statements.  - 17 -       CHURCH LOANS
& INVESTMENTS TRUST(A Real Estate
Investment Trust)STATEMENTS OF
INCOMEYears ended
March 31, 2008, 2007 and 20062008

2007

2006INTEREST
AND FEE INCOME:Interest
income
$
6,407,547
$
5,961,545
$
5,578,470Fee
income

897,255

627,535

708,897Interest
and fee income

7,304,802

6,589,080

6,287,367INTEREST
EXPENSE

2,749,919

2,781,039

1,972,371Net
interest income

4,554,883

3,808,041

4,314,996PROVISION
FOR CREDIT LOSSES

125,000

-

-Net
interest income less provision forpossible credit losses

4,429,883

3,808,041

4,314,996OTHER
INCOMEGain
(loss) on sale of other real estate owned

508,555

(13,317)

-Other

46,403

181,126

87,817Other
income

554,958

167,809

87,817OTHER
OPERATING EXPENSESGeneral
and administrative

1,601,339

1,211,253

1,041,874Board
of Trust Managers fees

51,700

50,300

50,035Total
other operating expenses

1,653,039

1,261,553

1,091,909Income
before provision for income taxes

3,331,802

2,714,297

3,310,904PROVISION
FOR INCOME TAXES

64,358

44,547

73,954NET INCOME
$
3,267,444
$
2,669,750
$
3,236,950NET
INCOME PER SHARE
$
.32
$
.26
$
.32These financial
statements should be read only in connection withthe accompanying
summary of significant accounting policiesand notes to financial
statements.  - 18 -     CHURCH LOANS
& INVESTMENTS TRUST(A Real Estate
Investment Trust)STATEMENTS OF
SHAREHOLDERS EQUITYYears ended
March 31, 2008, 2007 and 2006Shares of beneficial interest

Undistributed

TreasuryShares

Amount

net income

shares

TotalBalance, March 31, 2005
10,223,690
$
29,762,291
$
947,889
$
(16,490)
$
30,693,690Net
income
-

-

3,236,950

-

3,236,950Cash
dividends($0.29 per share)
-

-

(2,962,957)

-

(2,962,957)Balance, March 31, 2006
10,223,690

29,762,291

1,221,882

(16,490)

30,967,683Net
income
-

-

2,669,750

-

2,669,750Cash
dividends($0.25 per share)
-

-

(2,554,273)

-

(2,554,273)Balance, March 31, 2007
10,223,690

29,762,291

1,337,359

(16,490)

31,083,160Net
income
-

-

3,267,444

-

3,267,444Cash
dividends($0.31 per share)
-

-

(3,167,300)

-

(3,167,300)Balance, March 31, 2008
10,223,690
$
29,762,291
$
1,437,503
$
(16,490)
$
31,183,304These financial
statements should be read only in connection withthe accompanying
summary of significant accounting policiesand notes to financial
statements.  - 19 -     CHURCH LOANS
& INVESTMENTS TRUST(A Real Estate
Investment Trust)STATEMENTS OF
CASH FLOWSYears ended
March 31, 2008, 2007 and 20062008

2007

2006CASH
FLOWS FROM OPERATING ACTIVITIESNet
income
$
3,267,444
$
2,669,750
$
3,236,950Adjustments
to reconcile net income to net cashprovided by operating
activities:Depreciation

2,064

2,064

2,064Provision
for credit losses

125,000

-

-Loss
(gain) on sale of other real estate owned

(508,555)

13,317

-Amortization
of loan discounts

(31,980)

(22,947)

(472,356)Amortization
of commitment fees

(826,602)

(545,453)

(636,990)Changes
in:Accrued
interest receivable

(94,755)

44,042

(215,530)Accrued
interest payable

(72,631)

(7,981)

80,656Federal
income tax payable

22,739

-

-Other
liabilities

(3,302)

135,436

(60,842)Other,
net

1,578

7,522

89,569Net
cash provided by operating activities

1,881,000

2,295,750

2,023,521CASH
FLOWS FROM INVESTING ACTIVITIESInvestment
in mortgage and interim constructionloans and church bonds

(32,306,970)

(36,390,077)

(47,682,076)Payments
received on mortgage and interim construction loans and church
bonds

38,751,423

31,241,440

37,361,673Payments
received on notes receivable

1,000

2,902

18,872Proceeds
from sale of other real estate owned

1,025,000

250,607

-Insurance
proceeds on other real estate owned

-

400,249

-Net
cash provided (used) by investing activities

7,470,453

(4,494,879)

(10,301,531)CASH
FLOWS FROM FINANCING ACTIVITIESBorrowings
on notes payable and line of credit

44,758,670

38,906,978

53,825,599Principal
payments on notes payable and line of credit

(50,928,248)

(34,187,119)

(42,516,531)Cash
dividends paid

(3,167,300)

(2,554,273)

(2,962,957)Net
cash provided (used) by financing activities

(9,336,878)

2,165,586

8,346,111Increase
(decrease) in cash and cash equivalents

14,575

(33,543)

68,101CASH
AND CASH EQUIVALENTS AT BEGINNING OF YEAR

95,412

128,955

60,854CASH
AND CASH EQUIVALENTS AT END OF YEAR
$
109,987
$
95,412
$
128,955These financial statements should be read only in connection
withthe accompanying summary of significant accounting policiesand
notes to financial statements.   - 20 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESMarch 31,
2008, 2007 and 2006  NATURE OF OPERATIONS  Church Loans &
Investments Trust (Church Loans) is a real estate investment trust that invests
primarily in mortgage and interim construction loans to churches and other
borrowers (see note 1) across the United States, particularly in the southern
portion of the United States. Church Loans requires that real estate properties
be pledged against loans as security which could be foreclosed by Church Loans
should the borrower default. Repayment of each borrower's obligations is
generally expected to be repaid from contributions from church members or from
operations of the borrower, or in the case of interim construction loans, by
permanent financing provided by Church Loans or others.  USE OF
ESTIMATES  The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. A material estimate that is particularly susceptible to
significant changes in the near term relates to the determination of the
allowance for credit losses.  CURRENT OPERATING
ENVIRONMENT  Church Loans invests in
loans with rates of interest that generally reprice either daily, annually or
otherwise periodically and are generally funded by relatively short-term debt
obligations. The volatility of interest rates and increased competition to
attract customers' funds have caused Church Loans' liability structure to become
short-term and rate sensitive. Church Loans reflected an average interest yield
on its loan and church bond portfolio, an average interest rate on its total
indebtedness and a net interest rate margin at March 31, 2008, 2007 and 2006 as
follows:  Loan
andchurch bond portfolio
Totalindebtedness
Net
interestrate marginMarch 31, 2008

8.39%
4.73%
3.66%March 31, 2007

8.31%
6.96%
1.35%March 31, 2006

7.82%
6.64%
1.18%  Church Loans finances
maturities of debt obligations through its available lines of credit and
principal payments received on its mortgage and interim construction loans.  CHURCH BONDS  Church bonds, secured
by first mortgage liens on church facilities, are stated at cost, as there is no
traded market for the bonds and management intends to hold such securities until
maturity.  LOANS  Loans that Church Loans
has the intent and ability to hold for the foreseeable future or until maturity
or pay-off generally are reported at their outstanding unpaid principal balances
adjusted for charge-offs, the allowance for credit losses, and any deferred fees
or costs on originated loans. Interest income is accrued on the unpaid principal
balance. Loan origination fees, net of certain direct origination costs, are
deferred and recognized as an adjustment of the related loan yield using the
interest method.  - 21 -    CHURCH LOANS
& INVESTMENTS TRUST (A Real Estate Investment Trust)SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIESMarch 31, 2008, 2007 and 2006   The accrual of interest
is generally discontinued on loans and church bonds more than 60 days past due
unless the credit is well secured and in process of collection. In all cases,
loans and bonds are placed on nonaccrual or charged-off at an earlier date if
collection of principal or interest is considered doubtful.  All interest accrued
but not collected for loans that are placed on nonaccrual or charged-off is
reversed against interest income. The interest on these loans is accounted for
on the cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all the principal and
interest amounts contractually due are brought current and future payments are
reasonably assured.  Commitment fees
received on interim construction loans are recognized over the interim
commitment period for loans that are not permanently financed by Church Loans
and over the life of the mortgage loan for loans that are permanently financed
by Church Loans. Amounts are being amortized using the straight-line method. For
the years ended March 31, 2008, 2007 and 2006, this method is not materially
different from the method of deferring commitment fees until the commitment is
exercised and recognizing such fees as an adjustment to yield by the interest
method over the related loans' lives as prescribed by generally accepted
accounting principles.  Purchase discounts on loans are
amortized based on the interest method.  ALLOWANCE FOR CREDIT
LOSSES  The allowance for
credit losses is established as losses are estimated to have occurred through a
provision for credit losses charged to earnings. Loan losses are charged against
the allowance when Church Loans believes the uncollectability of a loan balance
is confirmed. Subsequent recoveries, if any, are credited to the allowance.  The allowance for
credit losses is evaluated on a regular basis by Church Loans and is based upon
management's and the Board of Trust Managers' periodic review of the
collectability of the loans in light of historical experience, the nature and
volume of the loan portfolio, adverse situations that may affect the borrower's
ability to repay, estimated value of any underlying collateral and prevailing
economic conditions. This evaluation is inherently subjective, as it requires
estimates that are susceptible to significant revision as more information
becomes available.  A loan is considered
impaired when, based on current information and events, it is probable that
Church Loans will be unable to collect the scheduled payments of principal or
interest when due according to the contractual terms of the loan agreement.
Factors considered by Church Loans in determining impairment include payment
status, collateral value, and the probability of collecting scheduled principal
and interest payments when due. Loans that experience insignificant payment
delays and payment shortfalls generally are not classified as impaired.  Church Loans determines
the significance of payment delays and payment shortfalls on a case-by-case
basis, taking into consideration all of the circumstances surrounding the loan
and the borrower, including the length of the delay, the reasons for the delay,
the borrower's prior payment record, and the amount of the shortfall in relation
to the principal and interest owed. Impairment is measured on a loan-by-loan
basis by either the present value of expected future cash flows discounted at
the loan's effective interest rate, the loan's observable market price, or the
fair value of the collateral if the loan is collateral dependent.  PROPERTY AND EQUIPMENT  Property and equipment
are stated at cost, less accumulated depreciation. Depreciation is provided on
the straight-line method over the estimated useful lives of the assets.   - 22 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESMarch 31,
2008, 2007 and 2006  OTHER REAL ESTATE OWNED  Real estate acquired
through, or in lieu of, loan foreclosure is to be sold and is initially recorded
at estimated fair value less cost to sell at date of foreclosure, establishing a
new cost basis. Other real estate owned, after foreclosure, is carried at the
lower of carrying amount or the property's estimated fair value minus estimated
costs to sell (fair value). Impairment losses are measured as the amount by
which the carrying amount of a property exceeds its fair value, and losses are
charged to operations.  INCOME TAXES  Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.  Effective April 1,
2007, Church Loans adopted Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income Taxes,an
interpretation of FASB Statement No. 109, Accounting for Income Taxes(
FIN 48). FIN 48 defines the methodology for recognizing the benefits of tax
return positions as well as guidance regarding the measurement of the resulting
tax benefits. FIN 48 requires an enterprise to recognize the financial statement
effects of a tax position when it is more likely than not (defined as a
likelihood of more than 50%), based on the technical merits, that the position
will be sustained upon examination. In addition, FIN 48 provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. The evaluation of whether a tax position
meets the more-likely-than-not recognition threshold requires a substantial
degree of judgment by management based on the individual facts and
circumstances. Actual results could differ from estimates. The adoption and
application of FIN 48 was not material to the financial statements.  OFF-BALANCE-SHEET FINANCIAL
INSTRUMENTS  In the ordinary course
of business, Church Loans has entered into off-balance-sheet financial
instruments consisting of commitments to extend credit. Such financial
instruments are recorded in the financial statements when they become
payable.  CASH FLOWS  For purposes of
reporting cash flows, cash and cash equivalents include cash-on-hand,
investments in a money market mutual fund, and certificates of deposit with
maturities of less than 90 days at the time of acquisition.  ADVERTISING  Advertising costs are
expended as incurred. Advertising expense for the years ended March 31, 2008,
2007 and 2006 was $53,070, $53,965 and $48,247, respectively.  NEW ACCOUNTING
PRONOUNCEMENTS  In September 2006, the
FASB issued Statement No. 157 (SFAS No. 157), Fair Value Measurements.
SFAS No. 157 defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles, and expands disclosures about
fair value measurements. SFAS No. 157 applies to other accounting pronouncements
that require or permit fair value measurements and does not require any new fair
value measurements. SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007 generally for financial assets and liabilities, and is
effective for fiscal years beginning after November 15,  - 23 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESMarch 31,
2008, 2007 and 2006   2008 generally for
non-financial assets and liabilities. Church Loans does not expect that the
adoption of SFAS No. 157 will have a material effect on its financial position
or results of operations.  In February 2007, the
FASB issued Statement No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS No. 159). SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at fair
value that are not currently required to be measured at fair value. Subsequent
unrealized gains and losses on items for which the fair value option has been
elected will be reported in earnings. The provisions of SFAS No. 159 are
effective for financial statements issued for fiscal years beginning after
November 15, 2007. Church Loans is evaluating if it will adopt the fair value
option of SFAS No. 159 and what impact the adoption will have on the financial
statements if adopted.  RECLASSIFICATION  Certain amounts in the 2006 and 2007
financial statements have been reclassified to conform to the 2008
presentation.                                     This information is an
integral part of the accompanying financial statements.  - 24 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)NOTES TO FINANCIAL STATEMENTSMarch 31, 2008, 2007 and
2006   NOTE 1  LOANS AND CHURCH
BONDS  Mortgage loans
receivable consist of conventional loans of $57,186,949 and $56,220,626 and
church bonds of $100,152 and $225,608 at March 31, 2008 and 2007, respectively.
Interim construction loans of $12,788,296 and $19,571,378 at March 31, 2008 and
2007, respectively, consist primarily of loans to churches for the construction
of church facilities and assisted living centers. Mortgage loans, church bonds
and interim construction loans are generally secured by first liens on real
estate comprised primarily of church buildings and other real estate.
Historically, the amount of a loan has been generally limited to 66-2/3% of the
appraised value of the related property. During the fiscal year 2005, the
debt-to-value ratio was increased to 85%. Certain loans are guaranteed by
individual members of the congregations or other individuals or congregations,
depending on the circumstances.  Church Loans' portfolio
included mortgage loans, church bonds and interim construction loans with
interest rates ranging from 5.0% to 12.0% at March 31, 2008. The weighted
average annual interest rates of Church Loans' loan and church bond portfolio
were 8.39% and 8.31% and 7.82% at March 31, 2008, 2007 and 2006,
respectively.  In addition to a
concentration of loans to churches, Church Loans makes certain interim real
estate construction loans and permanent loans to entities other than churches.
At March 31, 2008 and 2007, Church Loans had seven loans to three borrowers that
totaled approximately $11,462,000 and $11,710,000, respectively, which were
secured by assisted living centers and commercial properties.  The following schedule is a summary
of the combined mortgage, church bonds and interim construction loan portfolios
by size of loan at March 31: 2008

2007Description
No. ofLoans

Carryingamount

No. ofLoans

CarryingamountOver
$1,500,000
10
$
23,588,376

11
$
27,254,091$1,300,000-1,499,999
2

2,731,440

4

5,613,124$1,000,000-1,299,999
9

10,288,422

5

5,421,816$900,000-999,999
2

1,903,080

2

1,918,591$800,000-899,999
2

1,709,529

4

3,476,415$700,000-799,999
4

3,062,595

4

3,028,411$600,000-699,999
13

8,434,112

10

6,523,785$500,000-599,999
9

4,933,647

11

6,085,895$400,000-499,999
6

2,711,020

13

5,774,595$300,000-399,999
7

2,471,693

7

2,449,427$200,000-299,999
23

5,814,789

22

5,659,870$100,000-199,999
9

1,323,705

13

1,915,073Under $100,000
21

1,102,989

18

896,519117

70,075,397

124

76,017,612Less:
unamortized purchase discounts on mortgage loans


(1,030,598)



(1,062,578)Less: deferred commitment fees


(1,112,512)



(1,385,104)Less: allowance for credit losses


(1,786,477)



(1,713,249)Total

$
66,145,810


$
71,856,681   - 25 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)NOTES TO FINANCIAL STATEMENTSMarch 31, 2008, 2007 and
2006  NOTE 1  LOANS AND CHURCH
BONDS (CONTINUTED)  The mortgage and
interim construction loan portfolios included the following loans at
March 31, 2008, with individual balances in excess of 3% of the total
carrying amount of the combined portfolios:  Bickford
Cottage LLC, Peoria, IL; interest at prime plus 1.5%, witha floor of
9.75% (9.75% at March 31, 2008, scheduled to repriceJanuary 1, 2010);
monthly payments of $36,092 to maturityon January 1, 2032
$
4,002,966Community
Protestant Church of Co-Op City, Bronx, NY; interest atprime plus
2.0%, with a floor of 9.25% (9.25% at March 31, 2008,scheduled to
reprice January 1, 2009); monthly payments of$26,249 to maturity on
January 1, 2026

2,746,835Christ
Temple Pentecostal Church, Kansas City, MO; interest atprime plus
2.5%, with a floor of 10.75% (10.75% at March 31, 2008,scheduled to
reprice March 1, 2012); monthly payments of$31,387 to maturity on
March 1, 2022

2,720,515Great
Plains Assisted Living L.L.C., Sioux City, IA; interest atprime plus
1.5%, with a floor of 5.5% (5.5% at March 31, 2008,scheduled to
reprice January 1, 2009); monthly payments of$17,960 to maturity on
January 1, 2029

2,669,260Ministerio
Internacional Creciendo, Virginia Gardens, FL; interest at primeplus
2.0%, with a floor of 12.25% (12.25% at March 31, 2008); principaland
interest due on maturity on July 1, 2008

2,500,000Bickford
Cottage LLC, Lafayette, IN; interest at prime plus 1.5%, witha floor
of 8.0% (8.0% at March 31, 2008,scheduled to repriceSeptember 1,
2010); monthly payments of $18,949 to maturityon September 1,
2030

2,369,554$
17,009,130  The original terms of
the individual loans included in the loan portfolio generally vary from 1 to 30
years. Scheduled maturities during the five years subsequent to March 31,
2008, are:  2009
$
13,613,0732010

4,480,1502011

2,735,8292012

2,881,5672013

2,446,807  At March 31, 2008,
mortgage loans and interim construction loans of $69,975,245 were pledged to
support the indebtedness of Church Loans.   - 26 -     CHURCH LOANS &
INVESTMENTS TRUST (A Real Estate Investment Trust)NOTES TO FINANCIAL
STATEMENTSMarch 31, 2008, 2007 and 2006  NOTE 1  LOANS AND CHURCH
BONDS (CONTINUTED)  A summary of
transactions in the allowance for credit losses for the years ended March 31 is
as follows:  2008

2007

2006Balance at
beginning of year
$
1,713,249
$
1,713,249
$
1,713,249Charge-offs

(51,772)

-

-Provision charged to operating
expenses

125,000

-

-Balance at end of
year
$
1,786,477
$
1,713,249
$
1,713,249  At March 31, 2008, 2007
and 2006, the recorded investment for loans for which impairment was recognized
in accordance with Statement No. 114 was approximately $11,639,000, $6,923,000
and $10,173,000, respectively. The related allowance for credit losses at March
31, 2008, 2007 and 2006 was $1,492,000, $1,055,000 and $1,275,000, respectively.
The average investment in impaired loans was approximately $9,281,000,
$8,548,000 and $9,115,000 for the years ended March 31, 2008, 2007 and 2006
respectively. Total non-accrual loans were approximately $5,931,000, $5,996,000
and $1,959,000 for the years ended March 31, 2008, 2007 and 2006, respectively.
Interest income which would have been recorded under the original terms of
non-accrual loans and church bonds amounted to approximately $458,000, $350,000
and $97,000 for the years ended March 31, 2008, 2007 and 2006,
respectively.Interest income actually
recognized for the years ended March 31, 2008, 2007 and 2006 was approximately
$175,000, $290,000 and $46,000, respectively. Total loans past due ninety days
or more and still accruing were approximately $4,012,000, $0 and $678,000 for
the years ended March 31, 2008, 2007 and 2006, respectively.  NOTE 2  NOTES PAYABLE AND LINE OF
CREDIT  Information relating to notes payable
and line of credit follows:  Balance atend of year

Weightedaverageinterest rate atend of
year

Maximumamountoutstanding at
anymonth-end

Averagemonth-endbalance

Weightedaverageinterest rate forthe
yearMarch 31, 2008Line
of credit payableto bank
$
12,903,000

4.69%
*
$
25,288,000
$
19,312,667

6.74%
*Other
demand notes payable

24,537,391

4.75%


24,634,889

22,589,485

6.41%TOTAL
$
37,440,391

4.73%

$
49,922,889
$
41,902,152

6.56%March 31, 2007Line
of credit payableto bank
$
22,380,000

6.93%
*
$
24,380,000
$
21,207,083

6.81%
*Other
demand notes payable

21,229,969

7.00%


21,229,969

19,193,775

6.96%TOTAL
$
43,609,969

6.96%

$
45,609,969
$
40,400,858

6.87% * Does not consider commitment
fees.  The line of credit is
secured by the pledge of specific mortgage notes receivable.   - 27 -     CHURCH LOANS &
INVESTMENTS TRUST (A Real Estate Investment Trust)NOTES TO FINANCIAL
STATEMENTSMarch 31, 2008, 2007 and 2006  NOTE 2  NOTES PAYABLE AND LINE OF
CREDIT (CONTINUTED)  Maturities of notes
payable and the line of credit are financed through principal payments received
on loans, advances on other demand notes payable and advances on the line of
credit.  Descriptions of the
notes payable and the line of credit are as follows:  Line of Credit Payable to
Bank  The line of credit
payable to bank consists of borrowings under a loan agreement effective through
December 31, 2008, that provides for a $35,000,000 line of credit with certain
commitment fees. Pursuant to the agreement with the bank, Church Loans has
pledged all mortgage loans, church bonds and interim construction loans to the
bank to secure the line of credit. The amount owing on the line of credit must
not exceed an amount equal to 85% of the outstanding principal amount of the
performing mortgage loans and church bonds and 50% of the outstanding principal
amount of the performing interim construction loans.  Interest accrues at a
variable rate and was the thirty-day LIBOR rate plus 1.60% (4.6863%) at March
31, 2008. Interest is payable monthly.  Additionally, the line
of credit requires that Church Loans' net worth be no less than $18,000,000 and
its total indebtedness shall not exceed 250% of its net worth. At March 31,
2008, Church Loans' unused line of credit was $22,097,000 less than the maximum
amount permitted under the agreement.  Demand Notes
Payable  Notes payable consists
of demand notes payable of $24,537,391 which mature during the year ending March
31, 2009. The demand notes payable bear interest, payable monthly, at 1.25% less
than the prime rate (4.75% at March 31, 2008) and are unsecured (see note 6).  NOTE 3  INCOME TAX
PROVISION  Church Loans has
elected to be taxed as a real estate investment trust under the provisions of
the Internal Revenue Code (the Code). To qualify as a real estate investment
trust under the Code, Church Loans must, among other things, distribute at least
90% of its taxable income to its shareholders through dividends. Church Loans is
required to pay dividends of at least 85% of its calendar year undistributed
income by February 1 or be subject to a special federal excise tax of 4% on the
undistributed amount.  Deferred taxes were not
significant to Church Loans' 2008, 2007 and 2006 financial statements.   - 28 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)NOTES TO FINANCIAL STATEMENTSMarch 31, 2008, 2007 and
2006   NOTE 3  INCOME TAX
PROVISION(CONTINUTED)  Total income tax
provision for the years ended March 31 is less than the amount computed by
applying the applicable statutory federal income tax rate (35%) to income before
provision for income taxes as follows:  2008

2007

2006Computed
"expected" federal income tax provision
$
1,166,131
$
950,004
$
1,158,816Increases (decreases) in taxes resulting from:Dividends

(1,144,315)

(857,895)

(1,072,795)Graduated rate differential

(6,938)

(8,710)

(7,460)Difference
in provision for credit losses for financial and tax purposes

87,580

-

-Difference
in accounting for interest income recognized for financial and tax
purposes

(6,112)

(6,864)

(4,655)Other

(31,988)

(31,988)

48Actual provision for income taxes
$
64,358
$
44,547
$
73,954  Church Loans adopted
the provisions of FASB FIN 48, Accounting for Uncertainty in Income
Taxes, on April 1, 2007. Management has determined that Church Loans has no
material uncertain tax positions that would require recognition under FIN 48.
Church Loans had no significant unrecognized tax benefits as of March 31, 2008
that, if recognized would affect the effective tax rate. Church Loans had
recorded no accrued interest or penalties as of or for the year ended March 31,
2008. Church Loans had no positions for which it deemed that it is reasonably
possible that the total amounts of the unrecognized tax benefit will
significantly increase or decrease within the 12 months of March 31, 2008.   NOTE 4  NET INCOME PER
SHARE  Net income per share of
beneficial interest is based on the weighted average number of shares
outstanding, which were 10,217,094 for the years ended March 31, 2008, 2007 and
2006, respectively. There were no share equivalents or other potentially
dilutive securities outstanding during any of the periods presented.   NOTE 5  DIVIDENDS  All dividends paid by
Church Loans are taxable to the recipient. A schedule of dividends paid during
the years ended March 31, 2008 and 2007 and 2006 follows:  Dividend
amountDate of
record

Date
paid

Per
Share

TotalMarch 31, 2005

May 2005
$
.06
$
613,026December 31, 2005

January 2006

.23

2,349,931March 31, 2006

May 2006

.07

715,197December 31, 2006

January 2007

.18

1,839,076March 31, 2007

May 2007

.06

613,026December 31, 2007

January 2008

.25

2,554,274  In April 2008, a
dividend of $715,197 ($0.07 per share) was declared for shareholders of record
onMarch 31, 2008.   - 29 -    CHURCH LOANS & INVESTMENTS TRUST (A Real Estate
Investment Trust)NOTES TO FINANCIAL STATEMENTSMarch 31, 2008, 2007 and
2006  NOTE 6 - RELATED
PARTY TRANSACTIONS  Other demand notes
payable at March 31, 2008 and 2007 included notes totaling $13,059,425 and
$11,994,086, respectively, which represent borrowings from related parties. The
notes bear interest at 1.25% less than the prime rate (4.75% at March 31, 2008)
and are unsecured. Interest expense incurred on related party other demand notes
payable was approximately $854,000, $723,000 and $555,000 for the years ended
March 31, 2008, 2007 and 2006, respectively.  NOTE 7 - CASH FLOW
INFORMATION  Supplemental
information on cash flows and noncash transactions for the years ended
March 31 is as follows:  2008

2007

2006Supplemental cash flow
informationInterest
paid
$
2,822,550

$
2,789,020

$
1,891,715Income
taxes paid
$
10,228

$
67,089

$
76,252Schedule
of noncash investing activity:Real estate
acquired through foreclosure
$
-

$
1,735,650

$
-   NOTE 8  SIMPLE RETIREMENT
PLAN  Church Loans
participates in a Simplified Employee Pension  Individual Retirement Accounts
Contribution Agreement. Church Loans agrees to provide discretionary
contributions in each calendar year to the individual retirement account or
individual retirement annuity of all employees who are at least 21 years old and
have performed services for Church Loans in at least three years of the
immediately preceding five years. Church Loans contribution amounted to
approximately $61,000, $58,000 and $59,000 for the years ended March 31, 2008,
2007, and 2006, respectively.  NOTE 9 - COMMITMENTS AND
CONTINGENCIES  Church Loans is a party
to financial instruments with off-balance-sheet risk in the normal course of
business. Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract.
Commitments generally have variable interest rates, fixed expiration dates or
other termination clauses and require payment of a fee. Since some of the
commitments may expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements. Church Loans evaluates each
customer's credit worthiness on a case-by-case basis. Collateral generally
includes real estate properties. The exposure to credit loss in the event of
nonperformance by the other party to the commitments to extend credit is
represented by the contractual amount. At March 31, 2008, Church Loans had
outstanding loan commitments (by contract amounts) of approximately $14,868,000.
Management does not anticipate any losses as a result of these transactions.  Church Loans is
involved in litigation in the normal course of business and, in the opinion of
management; such litigation will have no material effect on Church Loans'
financial statements.  - 30 -     CHURCH LOANS &
INVESTMENTS TRUST (A Real Estate Investment Trust)NOTES TO FINANCIAL
STATEMENTSMarch 31, 2008, 2007 and 2006   NOTE 10 - DISCLOSURE
ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS  The following methods
and assumptions were used to estimate the fair value of each class of financial
instruments, the results of applying such methods and assumptions to the
financial instruments and limitations inherent in fair value estimates:  Cash and Cash
Equivalents  The assets are
considered short-term instruments for which the carrying amount is a reasonable
estimate of fair value.  Loans and Church
Bonds  Fair values are
estimated for portfolios of loans with similar financial characteristics. Loans
are segregated by type, such as mortgage and interim construction loans and
church bonds. Each loan category is further segmented into fixed and adjustable
rate interest terms. For variable-rateloans, primarily interim
construction loans, that reprice frequently and with no significant change in
credit risk, fair values are based on carrying amounts. The fair value of
fixed-rate mortgage loans and bonds is generally estimated by discounting the
future cash flows through the estimated maturity using the current rates at
which similar loans would be made to borrowers with similar credit ratings. The
estimate of maturity is based on Church Loans' historical experience with
repayments for each loan classification, modified, as required, by an estimate
of the effect of current economic and lending conditions. The carrying value of
loans and bonds, net of the allowance for credit losses was $66,145,810 and
$71,856,681 and the fair value of loans and bonds was approximately
$71,662,000and $58,568,000 at March 31,
2008 and 2007, respectively.  Notes Payable and
Line of Credit  The fair value of notes
payable are equal to the carrying value as such liabilities are deemed to be
short-term borrowings. The fair value of the line of credit is equal to the
carrying value as such amounts are variable rate debt.  Commitments to
Extend Credit  Generally, Church Loans
enters into commitments to extend credit at adjustable interest terms.
Accordingly, the commitment amount is a reasonable estimate of fair value.  Other  The carrying amounts of
notes receivable and accrued interest approximate fair value.  Limitations  Fair value estimates
are made at a specific point in time, based on relevant market information and
information about the financial instrument. These estimates do not reflect any
premium or discount that could result from offering for sale at one time Church
Loans' entire holdings of a particular financial instrument. Because no market
exists for a significant portion of Church Loans' financial instruments, fair
value estimates are based on judgments regarding future expected loss
experience, current economic conditions, risk characteristics of various
financial instruments, and other factors. These estimates are subjective in
nature and involve uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.  This information is an
integral part of the accompanying financial statements.   - 31 -    Item 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE  None   Item 9A(T): CONTROLS AND PROCEDURES  Evaluation of
Disclosure Controls and Procedures  We performed an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rules 13a-15 or 15d-15 as of the end of the
period covered by this report. Based upon that evaluation, our Chief Executive
Officer and our Chief Financial Officer concluded that our disclosure controls
and procedures, as defined by Exchange Act Rules 13a-15(e) or 15d-15(e), were
effective as of the end of the period covered by this Annual Report on Form 10-K
to provide reasonable assurance that the information required to be disclosed by
us in our reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission and such information
is accumulated and communicated to management as appropriate to allow timely
decisions regarding required disclosure.  Managements Report
on Internal Control over Financial Reporting  Managements annual
report on internal control over financial reporting is contained in Item 8 of
this Report.  Changes in Internal
Control over Financial Reporting  There has not been any
change in our internal control over financial reporting during our fiscal
quarter ending March 31, 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.   Item 9B: OTHER
INFORMATION  None.   PART III   Item 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE  (a) Board of Trust Managers. The following information is furnished as
to each individual who now serves as a member of our Board of Trust
Managers:  B.
R. McMorries, age 81, is a consulting engineer. He has served as a Trust Manager
since 1963. He serves as Chairman of the Board of Trust Managers.  Larry G. Brown, age 65, is the President of Larry Brown Realtors,
Inc. and is a licensed realtor. He has served as a Trust Manager since 1981. He
serves as Vice-Chairman of the Board of Trust Managers.  Jack R. Vincent, age 78, is engaged in farming and ranching
operations. He has served as a Trust Manager since 1989.  Steven Rogers, age 60, is a commercial real estate agent. He has
served as a Trust Manager since 1990.  Michael A. Bahn, age 64, is the Vice-President of Amarillo
Blueprint Co., an office equipment and supply and reproduction services
business. He has served as a Trust Manager since 1997. He serves as Secretary of
the Board of Trust Managers.   - 32 -    Michael W. Borger, age 53, is the President of Turnkey Leasing,
Ltd., an equipment leasing business. Mr. Borger has served as a Trust Manager
from 1988 to 1990 and again since 2002.  Stephen W. Myers, age 52, is the principal owner and President of
Turnkey Computer Systems, LLC, a computer software provider with emphasis in the
cattle feeding industry. Mr. Myers has served as a Trust Manager since January
2008.  E.
Stan Morris, Jr., age 60, is a certified public accountant and an employee of
the public accounting firm of Brown, Graham & Company, P.C. Mr. Morris has
served as a Trust Manager since January 2008.  (b) Executive Officers. The following information is furnished as to
each individual who now serves as an executive officer and who is not mentioned
under "Board of Trust Managers" above:  M.
Kelly Archer, age 56, serves as President, Manager of Operations and Chief
Executive Officer. As such, Mr. Archer functions as our Executive Officer. Mr.
Archer has served in this capacity for 26 years.  Robert E. Martin, age 58, serves as our Senior
Vice-President-Lending. Mr. Martin has served in such capacity since 1999. Prior
to serving in such capacity, Mr. Martin served as the President/CEO of Santa Fe
Federal Credit Union. Mr. Martin also served as a member of our Board of Trust
Managers prior to becoming our Senior Vice-President.  Robert E. Fowler, age 55, serves as our Senior Vice-President-CFO
and Information Systems. Mr. Fowler has served in such capacity for 26
years.  (c) Identification of Certain Significant Employees.  None.  (d) Family Relationships.  None.  (e) Business Experience.  See responses to Items
10(a) and 10(b) above.  (f) Involvement in Certain Legal Proceedings.  None.  (g) Audit Committee Financial Expert.  We do not have an audit
committee financial expert serving on our Audit Committee. However, we believe
that our Audit Committee, as a whole, meets the requirements of a financial
expert.  (h) Identification of the Audit Committee.  We have an Audit
Committee which consists of Messers McMorries, Morris, Vincent and Borger. This
committee, which met twelve times during our last fiscal year, is primarily
responsible for: reviewing the activities of our independent auditors; reviewing
and evaluating recommendations of the auditors; recommending areas of review to
our management; reviewing our loans to determine the recommended credit loss
reserve and review and classification of past due loans; and reviewing and
evaluating our accounting policies, reporting practices and internal
controls.   - 33 -    (i) Changes in Recommending Nominees to the Board of Trust
Managers.  None.  (j) Compliance with Section 16(a) of the Securities Exchange Act of
1934.  Based upon information
provided to us by individual Trust Managers and Executive Officers and
shareholders, we believe that during the preceding fiscal year our Managers and
Executive Officers and shareholders have complied with all such applicable
filing requirements.  (k) Code of Ethics.  We have adopted a Code
of Ethics applicable to our executive officers. A copy of the Code of Ethics is
attached hereto as Exhibit 14. The Code of Ethics is also posted on our website
at www.churchloans.com. We will provide, free of charge, to any person so
requesting a copy of the Code of Ethics. Requests can be made to:  Church Loans & Investments Trust Attn: Mr. Kelly Archer 5305
I-40 West Amarillo, Texas 79106 Telephone: (806) 358-3666 E-mail: karcher@churchloans.com   Item 11: EXECUTIVE COMPENSATION  (a) Executive
Officers:  The following table
sets forth certain information regarding compensation paid during each of our
last three fiscal years to our Manager of Operations (CEO) and Chief Financial
Officer (CFO). We have no other executive officers whose salary, bonuses and
other compensation earned during fiscal 2008 exceeded $100,000 for services
rendered in all capacities.  Annual CompensationName and Principal
Position
Fiscal
Year

Salary

Bonus

Other Annual
CompensationCEO -
M. Kelly Archer
Manager
of Operations
2008
2007
2006
$
115,704
112,854
110,850
$
-0-
-0-
12,000
$
19,650
19,500
19,350CFO -
Robert E. Fowler
2008
2007
2006
$
75,542
73,760
72,130
$
-0-
-0-
6,000
$
12,844
12,750
12,656   Other Annual
Compensation paid to or for the benefit of Mr. Archer and Mr. Fowler represents
annual contributions to the SEP (Simplified Employee Pension) accounts for Mr.
Archer and Mr. Fowler.  (b) Trust Managers' Compensation:  Our Board of Trust
Managers was paid $51,700 in cash as a group during the last fiscal year for
services as Trust Managers. The Chairman of the Board of Trust Managers, B. R.
McMorries, is paid $500 per month for serving in such capacity. The remaining
members of the Board of Trust Managers are paid $300 per month for serving as a
member of the board. All Trust Managers are paid an additional $100 per board or
committee meeting attended. In addition, a Trust Manager receives $400 per day
for their services when out of town on trust business.  The members of the
Board of Trust Managers are not otherwise employed or compensated by us.  - 34 -     (c) Compensation Committee Interlocks
and Insider Participation:  We have a Compensation
Committee which consists of Messers Rogers, Borger and Brown. This committee did
notmeet
during the Trust's last fiscal year. The Compensation Committee is primarily
responsible for reviewing the compensation of the Trust's staff and making
recommendations regarding same to the Board of Trust Managers. Mr. Brown also
serves as Vice-Chairman of the Board of Trust Managers. However, Mr. Brown
receives no compensation as an officer of the Trust other than the board fees
described above.  (d) Compensation
Committee Report:  The Compensation
Committee has reviewed and discussed with management the Compensation Discussion
and Analysis required by Item 402(b) (§229.402(b)) of Regulation S-K. Based upon
the review, the Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this annual report.  The compensation of our
employees and officers is based on multiple factors. In determining the
compensation for any employee or officer, the committee considers the following
factors:  


The profitability
of the Company.


The employees or
officers contribution to the profitability of the Company.


The current
market rate for the experience level of the employee or officer.


The cost of
living in Amarillo, Texas.  By:
Stephen Rogers, Chairman
Michael W. Borger
Larry G. Brown   Item 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS  (a) The
following table indicates the persons known by us to own beneficially more than
5 percent of our shares of beneficial interest as of March 31, 2008:  Name and Address of
Beneficial
Owner
Amount of and Nature
of Beneficial
Ownership
Percent
of
ClassEdith M. Brandon
3001 Teckla,
Amarillo, TX 79106
605,323 shares
5.92%  (b) The
following table indicates the number of our shares of beneficial ownership owned
by the Board of Trust Managers and Executive Officers, individually and as a
group as of March 31, 2008:  Name and Address of
Beneficial
Owner
Amount of and Nature
of Beneficial
Ownership*
Percent
of
ClassB. R. McMorries
1601 Jordan,
Amarillo, TX 79106

423,672

4.15%Larry G. Brown
4210 Palacio
Drive, Amarillo, TX 79109

42,787

0.42%Jack R.
Vincent
6303 Stoneham
Drive, Amarillo, TX 79109

12,500

0.12%Steven Rogers
6206 Calumet,
Amarillo, TX 79106

2,800

0.03%Michael A.
Bahn
1612 S. Travis,
Amarillo, TX 79102

1,650

0.02%  - 35 -     Stephen W.
Myers
8401 New England
Drive, Amarillo, TX 79119

50,000

0.49%Michael W.
Borger
43 Cypress Point,
Amarillo, TX 79124

63,000

0.62%E. Stan Morris,
Jr.
6308 Calumet Road,
Amarillo, TX 79106

-0-

0.00%M. Kelly
Archer
7200 Dreyfuss
Road, Amarillo, TX 79106

248,568

2.43%Robert E.
Fowler
6714 Mosley St.,
Amarillo, TX 79119

9,302

0.09%Robert E.
Martin
8 Country Club
Drive, Amarillo, TX 79124

10,261

0.10%All Trust Managers
and
Executive Officers
as a Group

864,540

8.46%   * The
nature of beneficial ownership of such shares is either directly by such named
person, indirectly through such persons spouse or through Individual Retirement
Accounts directed by such person or their spouse.  (c) Change in
control.  We know of no arrangements which may
result in a change of control.  (d) Securities
Authorized for Issuance under Equity Compensation Plans.  None.   Item
13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE  We issue a limited
number of "Master Notes" which are unsecured debt instruments. We pay the
obligee of such notes interest at the rate of one and one-quarter percent per
annum (1.25%) less than the prime lending rate of Amarillo National Bank, our
primary lender. As of March 31, 2008 we had entered into Master Note Agreements
with B. R. McMorries, Chairman of the Board of Trust Managers, and related
persons, in the amount of $3,793,949; Larry Brown, Vice-Chairman of the Board of
Trust Managers and related persons, in the amount of $1,111,078; M. Kelly
Archer, President, Manager of Operations and CEO of the Trust and related
persons, in the amount of $181,883; Stephen W. Myers, a member of the Board of
Trust Managers, and related persons in the amount of $301,451; Michael W.
Borger, and related persons, in the amount of $754,782; and Edith M. Brandon, a
person owning more than 5% of the outstanding stock of the Trust, and related
persons, in the amount of $6,531,294. The terms of such Master Notes are the
same as Master Notes entered into with other unrelated persons, except as to the
amounts thereof.  Jack R. Vincent serves
as a member of our Board of Trust Managers and serves also as a member of the
Board of Directors of Happy State Bank and Trust Company, Happy, Texas. Happy
State Bank and Trust Company competes with us for loans to churches, including
interim loans to churches. This competition may have a significant impact on the
number of interim loans we acquire through referrals from church bond
broker-dealers. These church bond broker-dealers are a substantial source of our
interim loans.    - 36 -    Item 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES  The Board of Trust
Managers has selected Clifton Gunderson LLP, independent certified public
accountants, as the auditors of our financial statements for the fiscal year
ending March 31, 2009. At the meeting of the shareholders to be held on August
26, 2008, the shareholders will vote upon a proposal to ratify the selection of
this firm as auditors. No member of such firm, or any associate thereof, has any
financial interest in us.  Audit Fees  The aggregate fees
billed for professional services rendered for the audit of our annual financial
statements for the most recent fiscal year, the review of the financial
statements included in our Form 10-Q for such fiscal year, or for services that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements were $75,450 as compared to $70,950 for the
fiscal year ended March 31, 2007.  Audit-Related Fees  None.  Tax Fees  The aggregate fees
billed us for tax services, including preparation of our tax return and tax
related matters, were $8,010 for the most recent fiscal year as compared to
$7,045 for the fiscal year ended March 31, 2007.  All Other Fees  There were no other
fees billed in each of the last two fiscal years for services rendered by the
principal accountant, Clifton Gunderson LLP for other services not included
above.  Before Clifton
Gunderson LLP is engaged by us to render audit or non-audit services, the
engagement is approved by our Audit Committee. Furthermore, the accountants
engagement to render tax services is also approved by our Audit Committee prior
to the engagement. There were no other fees not included above.  All hours expended on
the principal accountants engagement to audit our Financial Statements for the
most recent fiscal year were attributed to work performed by Clifton Gunderson
LLPs full-time, permanent employees.   PART IV    Item 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES  (a) Exhibits  The Exhibits listed on
the accompanying Index to Exhibits are filed as a part of this Annual Report.   - 37 -     CHURCH LOANS
& INVESTMENTS TRUST
(A Real Estate
Investment Trust)INDEX TO EXHIBITS(2)
None(3)
(i) Amended and
Restated Declaration of Trust dated July 16, 2004, previously filed as an
exhibit to the Trusts Definitive Proxy Statement, Form DEF 14A, dated
June 25, 2004 (File No. 000-08117) and is incorporated by
reference.(ii) Amended and
Restated Bylaws dated July 16, 2004, previously filed as an exhibit to the
Trusts Definitive Proxy Statement, Form DEF 14A, dated June 25, 2004
(File No. 000-08117) and is incorporated by reference.(4)
None other than those listed in
(3) above.(9)
None(10)
Loan Agreement
dated January 31, 2006 entered into by and between Church Loans and
Amarillo National Bank included as an exhibit to Issuers Form 10-QSB for
the quarterly period ended December 31, 2005, under File No. 000-08117 and
is incorporated by reference.(11)
Statement
regarding computation of per share earnings-omitted since information
necessary to make the computation is included in the Financial Statements
and Note 4 thereto.(12)
Not
applicable.(13)
None(14)
Code of Ethics for
Officers(16)
None(18)
None(21)
None(22)
None(23)
None(24)
None(31)
(i)(1)
Certification of President (Principal Executive Officer and CEO) Pursuant
to Exchange Act Rule 13a-14(a)/15d-14(a).(2)
Certification of Senior Vice-President and CFO (Principal Financial
Officer) Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).(ii)
None(32)
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.(33)
None(34)
None(35)
None(99)
None(100)
None  - 38 -     SIGNATURESPursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.CHURCH LOANS & INVESTMENTS
TRUSTBy:
/s/ B.R.
McMorriesB.R. McMorriesChairman of
the Board ofTrust ManagersDATED: June 27, 2008Pursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates
indicated.Signature
Capacity
Date/s/ B.R. McMorriesB.R. McMorries
Chairman of the Boardof
Trust Managers
6/27/2008/s/ Larry G.
BrownLarry G. Brown
Vice-Chairman of the
Boardof Trust Managers
6/27/2008/s/ Michael A.
BahnMichael A. Bahn
Secretary of the Board of
TrustManagers
6/27/2008/s/ M. Kelly
ArcherM. Kelly Archer
President, Principal
ExecutiveOfficer and CEO
6/27/2008/s/ Robert E.
FowlerRobert E. Fowler
Senior Vice-President
andChief Financial Officer
6/27/2008/s/ Jack R.
VincentJack R. Vincent
Trust Manager
6/27/2008/s/ Steven
RogersSteven Rogers
Trust Manager
6/27/2008/s/ Stephen W.
MyersStephen W. Myers
Trust Manager
6/27/2008/s/ Michael W.
BorgerMichael W. Borger
Trust Manager
6/27/2008/s/ E. Stan Morris,
Jr.E. Stan Morris, Jr.
Trust Manager
6/27/2008      - 39 -     Service Mark and Copyright Notice

Copyright © 2008 by Church Loans & Investments
TrustThis report is copyrighted material ofChurch Loans &
Investments Trust.Church Loans & Investments Trust is a
service markof the Trustees of Church Loans & Investments
Trust.The unauthorized use of the service marks and
copyrightsof Church Loans & Investments Trust without the
express,written permission of Church Loans & Investments
Trust,is strictly prohibited. All rights reserved.   - 40 -