As Filed with the Securities and Exchange Commission On March 25, 2009


                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                               Amendment No. 3 to


                                    FORM S-11

                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933

                        American Church Mortgage Company
        (Exact Name of Registrant as Specified in Governing Instruments)

                            10237 Yellow Circle Drive
                              Minnetonka, MN 55343
                                 (952) 945-9455
       (Address, Including Zip Code, and Telephone Number, Including Area
               Code, of Registrant's Principal Executive Offices)

                           Philip J. Myers, President
                            10237 Yellow Circle Drive
                              Minnetonka, MN 55343
                                 (952) 945-9455
                     (Name, Address, Including Zip Code, and
          Telephone Number, Including Area Code, of Agent For Service)

                                   copies to:

                             Philip T. Colton, Esq.
                           Winthrop & Weinstine, P.A.
                       225 South Sixth Street, Suite 3500
                              Minneapolis, MN 55402
                                 (612) 604-6400

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

      If any of the securities  being  registered on this form are to be offered
on a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]

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

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

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

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

Indicate 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," and "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 [X]

                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==========================================================================================================
                                           Amount     Proposed Maximum    Proposed Maximum      Amount Of
  Title Of Each Class Of Securities         to be      Offering Price    Aggregate Offering   Registration
           To Be Registered              Registered       Per Unit              Price              Fee
----------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>                <C>                  <C>
Series C Secured Investor Certificates     20,000        $1,000(1)           $20,000,000         $786(2)
==========================================================================================================
</TABLE>

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

(2)   Previously paid.

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

<PAGE>


                         PROSPECTUS DATED MARCH 25, 2009


                        AMERICAN CHURCH MORTGAGE COMPANY

              $20,000,000 of Series C Secured Investor Certificates

                                   ----------

      American Church Mortgage Company has operated as a real estate  investment
trust,  or "REIT."  We make  mortgage  loans to  churches  and other  non-profit
religious organizations.  We also purchase mortgage-secured bonds issued by such
organizations.

      We are offering our Series C Secured Investors Certificates.

      Best  efforts  offering.  The  underwriters  are not  required to sell any
specific  number or dollar amount of securities  but will use their best efforts
to sell the securities offered.

      We may offer new certificates with maturities  ranging from  approximately
thirteen (13) to twenty (20) years. Depending on our capital needs, certificates
with certain terms may not always be available.  We will periodically  establish
and may  change  interest  rates  on the  unsold  certificates  offered  in this
prospectus.  Current  interest  rates  can be found in the  "Description  of the
Certificates"  section of this  prospectus.  Investors  are advised to check for
prospectus supplements as interest rates are subject to change.  However, once a
certificate is sold, its interest rate will not change during its term.

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

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

      The certificates  are not  certificates of deposit or similar  obligations
and are not  guaranteed  by the FDIC or any other  governmental  fund or private
entity.  Investing in certificates involves risks and conflicts of interest. See
"Risk Factors"  beginning on p. 10 and  "Conflicts of Interest"  beginning on p.
21. Those risks include the following:

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

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

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

      o     Our  mortgages  and bonds are secured by church  property,  which is
            typically limited purpose collateral.

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

<TABLE>
<CAPTION>
====================================================================================================
                                                             Selling Commission and
Series C Secured Investor Certificates   Price to Public      Offering Expenses (2)   Proceeds to Us
----------------------------------------------------------------------------------------------------
<S>                                      <C>                 <C>                      <C>
Minimum Purchase                           $     1,000 (1)          $  46.00           $        954
----------------------------------------------------------------------------------------------------
Total                                      $20,000,000              $920,000           $ 19,080,000
====================================================================================================
</TABLE>

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

(2)   Assumes the sale of all certificates offered hereby, of which there can be
      no  assurance.  Estimated  for  purposes  of this  table  based on a 2.75%
      underwriter's  commission, a .75% underwriter's management fee, a $120,000
      non-accountable  expense fee payable to the  underwriter,  and $100,000 in
      other offering expenses.

                         AMERICAN INVESTORS GROUP, INC.
                              Minnetonka, Minnesota

                               _________ ___, 2009

                                      - 2 -

<PAGE>

                                Table of Contents

PROSPECTUS SUMMARY ........................................................    4
RISK FACTORS ..............................................................   10
WHO MAY INVEST ............................................................   17
USE OF PROCEEDS ...........................................................   18
COMPENSATION TO ADVISOR AND AFFILIATES ....................................   19
CONFLICTS OF INTEREST .....................................................   21
DISTRIBUTIONS .............................................................   23
CAPITALIZATION ............................................................   25
SELECTED FINANCIAL DATA ...................................................   26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
   OF OPERATIONS ..........................................................   27
OUR BUSINESS ..............................................................   32
MANAGEMENT ................................................................   49
EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS; DIRECTOR
   COMPENSATION ...........................................................   52
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
   STOCKHOLDER MATTERS ....................................................   53
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE ..   54
THE ADVISOR AND OUR ADVISORY AGREEMENT ....................................   55
MATERIAL FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE
   CERTIFICATES ...........................................................   57
QUALIFICATION AS A REIT FOR FEDERAL INCOME TAX PURPOSES ...................   58
ERISA CONSIDERATIONS ......................................................   59
DESCRIPTION OF CAPITAL STOCK ..............................................   60
DESCRIPTION OF THE CERTIFICATES ...........................................   61
SUMMARY OF THE ORGANIZATIONAL DOCUMENTS ...................................   67
PLAN OF DISTRIBUTION ......................................................   70
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES .....   72
LEGAL MATTERS .............................................................   72
EXPERTS ...................................................................   72
ADDITIONAL INFORMATION ....................................................   72
INDEX TO FINANCIAL STATEMENTS .............................................  F-1

                                      - 3 -

<PAGE>

                               PROSPECTUS SUMMARY

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

                        American Church Mortgage Company

      American Church Mortgage Company has operated as a real estate  investment
trust,  or REIT.  We make  mortgage-backed  loans from $100,000 to $2,000,000 to
churches  and  other  non-profit  religious   organizations  for  the  purchase,
construction or refinancing of real estate and improvements. As of September 30,
2008 we had 76 mortgage loans  outstanding in the original  aggregate  principal
amount of $33,841,353,  and own church bonds having a face value of $12,018,000.
The principal  balance of our loan and bond portfolios  outstanding at September
30, 2008, were $33,770,318 and $11,682,585,  respectively. We intend to continue
to lend  funds  pursuant  to our  business  plan as  funds  from the sale of our
securities become available and as funds become otherwise available, for example
through the repayment of loans.

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

                                   Our Advisor

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

                                More Information

      We have filed a  registration  statement on Form S-11 with the  Securities
and  Exchange  Commission  (the  "SEC")  with  respect to the  secured  investor
certificates  to be issued in the  offering.  This  prospectus is a part of that
registration statement.

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

                                      - 4 -

<PAGE>

                            The Certificates Offered

Issuer ......................   American Church Mortgage Company

Trustee .....................   Herring Bank, Amarillo, Texas

Securities Offered ..........   Series C Secured Investor Certificates

Offering Price ..............   100% of the  principal  amount per  certificate;
                                multiples of $1,000 per certificate.

Maturity ....................   13,  14,   15,  16,  17,  18,  19  and   20-year
                                maturities. Each certificates will mature on the
                                anniversary  of  the  last  day  of  the  fiscal
                                quarter in which the  certificate  is purchased.
                                We may cease offering specified maturities,  and
                                begin re-offering any unavailable  maturity,  at
                                any time.

Interest Rates ..............   As of the offering  date,  the interest rates we
                                will pay for each maturity of  certificates  are
                                set forth in the section  entitled  "Description
                                of  the   Certificates"   to  this   prospectus.
                                However,  investors  are  advised  to check  for
                                prospectus  supplements  as  interest  rates are
                                subject to change.

Interest Payments ...........   Interest will be paid quarterly.

Principal Payment ...........   Unless you renew your  certificate,  we will pay
                                the entire  principal  amount of the certificate
                                at maturity.

Redemption ..................   We  generally  will not be  required  to  redeem
                                outstanding   certificates.    We   may   redeem
                                outstanding certificates in the following cases:

                                o     In our sole  discretion,  at any time upon
                                      30 days' notice.

                                o     If  you  die,  your   representative   may
                                      require  us to  redeem  your  certificate,
                                      subject to an  aggregate  limit of $25,000
                                      in   any   calendar    quarter   for   all
                                      redemptions.

                                o     If we  terminate  our  advisory  agreement
                                      with  Church  Loan  Advisors,   Inc.,  our
                                      current advisor,  for any reason,  we will
                                      be   required   to  offer  to  redeem  all
                                      outstanding    certificates    (but    are
                                      permitted to redeem fewer than all).

                                If we redeem  any  certificate,  we will pay the
                                holder  an  amount  equal  to  the   outstanding
                                principal  amount  of the  redeemed  certificate
                                plus accrued but unpaid interest.

Collateral ..................   To secure payment of the  certificates,  we will
                                assign   to   the    trustee    as    collateral
                                non-defaulted  mortgage-secured promissory notes
                                and church bonds with an  aggregate  outstanding
                                principal  balance equal to at least 100% of the
                                aggregate  outstanding  principal  amount of the
                                certificates.   We  may,   in  our   discretion,
                                substitute  cash  or  cash  equivalents.  Unless
                                there is an event of default, we will not assign
                                underlying   mortgages   securing  the  assigned
                                promissory    notes.    To   the    extent   not
                                collateralized, the certificates will constitute
                                a subordinated claim against the issuer.

Transferability .............   The certificates are  non-negotiable  and may be
                                transferred only in limited  circumstances  with
                                the consent of our advisor.

Absence of Public Market ....   There is no market for the  certificates.  We do
                                not believe that a public  market will  develop.
                                You may not be able to sell your certificates.

Sales Commission, Fees ......   We will pay the  underwriter  a  commission  for
                                assisting  us in selling the  certificates.  The
                                underwriter  will receive a sales  commission of
                                up to 2.75% and an  underwriting  management fee
                                equal to .75% of

                                      - 5 -

<PAGE>

                                the principal  amount of  certificates  sold. We
                                will   also   pay   to   the    underwriter    a
                                non-accountable  expense fee of up to  $120,000,
                                as  further  described  herein  at  the  section
                                entitled "Use of Proceeds."

Outstanding Indebtedness ....   Our bylaws  prohibit us from borrowing in excess
                                of 300% of  shareholders'  equity,  except under
                                certain circumstances.

                                On September  12,  2008,  we entered into a Loan
                                and  Security  agreement  with  Beacon  Bank  as
                                lender,  and a Revolving  Note  evidencing an $8
                                million  revolving  loan.   Approximately   $4.2
                                million was advanced under the Revolving Note at
                                closing.  Of  this  amount,  approximately  $4.2
                                million  was  used  to  pay  off  the  Company's
                                previous credit  facility with KeyBank  National
                                Association.   Advances   under   the  Loan  and
                                Security  Agreement are based upon,  among other
                                things,  a borrowing  base  calculation  and are
                                available  to the Company for use in  connection
                                with  its  general  business   purposes.   Total
                                availability   under  the   Revolving   Note  is
                                initially limited to $4.5 million,  which amount
                                shall be increased to $8 million at such time as
                                one or more participants purchase an interest in
                                the Revolving Note.

                                At  September  30,  2008,  the Company  also had
                                $7,258,000  worth of Series A  Secured  Investor
                                Certificates  and $14,695,000  worth of Series B
                                Secured Investor Certificates outstanding.

                                      - 6 -

<PAGE>

                                 Use of Proceeds

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

                                 Our REIT Status

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

                                  Risk Factors

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

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

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

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

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

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

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

                              Conflicts of Interest

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

      o     Our  President  is  the  President  of  both  our  advisor  and  the
            underwriter and thus is in a position of control of both entities.

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

      o     Agreements  between us and our advisor and the underwriter  were not
            negotiated at arm's-length.

      o     We and the underwriter have common business interests.

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

      o     The advisory  agreement was not negotiated at  arm's-length,  but is
            subject to annual renewal by our Board of Directors.

                                      - 7 -

<PAGE>

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

      Our advisor and its affiliates  may engage in businesses  similar to ours.
We compensate our advisor and its  affiliates  for services  rendered and pay an
annual advisory fee equal to 1.25% of average invested assets.

                            Our Investment Objectives

      Our investment objectives are to provide our certificate holders with:

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

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

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

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

                        Business Objectives and Policies

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

      o     find  qualified  borrowers  and make  loans in  accordance  with out
            Lending Guidelines;

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

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

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

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

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

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

                               Lending Guidelines

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

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

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

      o     We require appraisals of the property securing our loans.

                                      - 8 -

<PAGE>

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

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

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

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

                                 Who May Invest

      You may purchase up to $5,000 of certificates  only if you have either (i)
a minimum annual gross income  (without  regard to your investment in our shares
or  certificates)  of at least $45,000 and a net worth  (exclusive of home, home
furnishings and  automobiles) of $45,000;  or (ii) a net worth  (determined with
the  foregoing  exclusions)  of at least  $150,000.  You may purchase  more than
$5,000 of  certificates  only if you have  either:  (i) a minimum  annual  gross
income (without regard to your investment in our shares or  certificates)  of at
least  $70,000  and a  net  worth  (exclusive  of  home,  home  furnishings  and
automobiles)  of at least  $70,000;  or (ii) a net  worth  (determined  with the
foregoing exclusions) of at least $250,000.  Suitability standards may be higher
in certain states.  Potential investors who are residents of Idaho, Iowa, Kansas
or Washington should read Exhibit B for suitability  requirements  particular to
their state.

      The  Office of the  Kansas  Securities  Commissioner  recommends  that you
should limit your  aggregate  investment in our  Certificates  and other similar
investments  to not more than 10% of your liquid net worth.  Liquid net worth is
defined as that  portion  of your  total net worth  (total  assets  minus  total
liabilities) that is comprised of cash, cash equivalents and readily  marketable
securities.

      In  addition to the above  suitability  standards,  residents  of Iowa and
Texas are limited to investing no more than 10% of their net worth (exclusive of
home, home furnishings and automobiles) in our shares or certificates.

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

      The  underwriter's  account  application to be signed by all purchasers of
the Series C Secured Investors  Certificates  contains an arbitration  agreement
for disputes by the underwriter.  By this agreement,  each purchaser agrees that
all  controversies  with the underwriter  relating to the  Certificates  will be
determined by arbitration  before the Financial  Industry  Regulatory  Authority
("FINRA")  (f/k/a the  National  Association  of  Securities  Dealers,  Inc.  or
"NASD").

                                      - 9 -

<PAGE>

                                  RISK FACTORS

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

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

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

Risks Related to Method and Terms of This Offering

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

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

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

Risks Related to Us

      Our Failure to Qualify as a Real Estate  Investment Trust Could Reduce the
      Funds We Have Available for Investment.
      --------------------------------------------------------------------------
      We operate as a real estate  investment trust. As a REIT, we are allowed a
deduction  for  dividends  paid to our  shareholders  in  computing  our taxable
income.  Thus,  only our  shareholders  are taxed on our taxable  income that we
distribute.  This treatment  substantially  eliminates the "double  taxation" of
earnings  to  which  many  corporations  and  their  shareholders  are  subject.
Qualification as a REIT involves the application of highly technical and complex
Internal Revenue Code provisions.

      To qualify and maintain our status as a REIT,  we must meet certain  share
ownership,  income,  asset and  distribution  tests on a  continuing  basis.  No
assurance can be given that we will satisfy  these tests at all times.  Further,
the requirements for a REIT may substantially affect day-to-day  decision-making
by our advisor.  Our advisor may be forced to take action it would not otherwise
take or refrain  from action  which might  otherwise  be  desirable  in order to
maintain our REIT status.

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

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

                                     - 10 -

<PAGE>

      Conflicts of Interest Arise From Our Relationship with Our Advisor and the
      Underwriter.
      --------------------------------------------------------------------------
      The terms of transactions involving our formation and the formation of our
advisor, and our contractual  relationship with our advisor, were not negotiated
at arm's-length.  Our non-independent  directors and officers may have conflicts
of  interest  in  enforcing  agreements  between  us  and  our  advisor  or  the
underwriter.  Future  business  arrangements  and agreements  between us and our
advisor or the underwriter and their affiliates must be approved by our board of
directors, including a majority of our independent directors.

      We Have  Identified  Material  Weaknesses in Our  Disclosure  Controls and
      Procedures and Have  Concluded  That Our Internal  Controls over Financial
      Reporting Are Not Effective.  In Addition,  We May  Experience  Additional
      Material Weaknesses in the Future.
      --------------------------------------------------------------------------

      We have  identified  material  weaknesses in our  disclosure  controls and
procedures relating to our lack of sufficient internal accounting  personnel and
segregation of duties  necessary to ensure that adequate review of our financial
statements  and notes thereto is performed and have  concluded that our internal
control  over  financial  reporting  is not  effective.  In  addition,  we  have
identified a material  weakness due to our  restatement of financial  statements
related to the  reclassification  of interest expense within operating income in
our  statements  of operations  for the fiscal year ended  December 31, 2007 and
2006, and the quarterly financial statements for the fiscal quarters ended March
31, 2008, June 30, 2008 and September 30, 2008.

      Material weaknesses in our disclosure controls and procedures could result
in material  misstatements  in our financial  statements not being  prevented or
detected. We may experience  difficulties or delays in completing remediation or
may  not be able to  successfully  remediate  material  weaknesses  at all.  Any
material weakness or unsuccessful  remediation could affect investor  confidence
in the accuracy and  completeness  of our  financial  statements,  which in turn
could  harm our  business  and have an  adverse  effect on our  ability to raise
additional funds,  including through this offering.  If under such circumstances
the Company's  financial  condition is adversely  affected,  it could negatively
impact the Company's ability to pay interest on the certificates.


Risks Related to the Certificates

      We May Incur More Indebtedness.
      ------------------------------
      We had, at September  30, 2008,  $4.2  million  outstanding  on our credit
facility  with Beacon  Bank and  $7,258,000  worth of Series A Secured  Investor
Certificates  and $14,695,000  worth of Series B Secured  Investor  Certificates
outstanding.  We may incur additional  indebtedness in the future. We may assign
or pledge some of our  mortgage-secured  promissory notes or other collateral in
connection  with incurring this  additional  indebtedness.  Our ability to incur
additional  indebtedness is limited to 300% of our  Shareholders'  Equity by our
bylaws,  unless an increased amount is approved by a majority of our Independent
Directors and disclosed and justified to our shareholders. Once the threshold is
reached  (or if  approval  is not  obtained),  we  will  not be  able  to  incur
additional   indebtedness  unless  we  raise  additional  equity  capital.  This
limitation  could  restrict  our  growth  or  affect  our  ability  to repay the
certificates as they mature.

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

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

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

      There Is No Public Market for the Certificates.
      ----------------------------------------------
      There is no market for certificates  issued by the Company. It is unlikely
that a market will develop.  The certificates will not be listed on any exchange
and will not be qualified for quotation

                                     - 11 -

<PAGE>

on any NASDAQ market. In addition,  the market for REIT securities  historically
has been less liquid than other types of publicly-traded  securities.  It may be
impossible  for  you  to  recoup  your  investment  prior  to  maturity  of  the
certificates.

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

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

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

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

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

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

Risks Related to Management

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

o     mortgage loan marketing and procurement

o     bond portfolio selection and investment

o     mortgage loan underwriting

o     mortgage loan servicing

o     money management

o     developing and maintaining business relationships

o     maintaining "goodwill"

o     managing relationships with our accountants and attorneys

o     corporate management including payment of office rent, etc.

o     bookkeeping

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

o     reports to shareholders and shareholder relations

                                     - 12 -

<PAGE>

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

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

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

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

Risks Related to Mortgage Lending

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

   o  low demand for mortgage loans

   o  interest rate and real estate valuation fluctuations

   o  changes in the level of consumer confidence

   o  availability of credit-worthy borrowers

   o  demographic and population patterns

   o  zoning regulations

   o  taxes and tax law changes

   o  availability of alternative financing and competitive conditions

   o  factors affecting specific borrowers

   o  national and local economic conditions

   o  state and federal laws and regulations

   o  bankruptcy or insolvency of a borrower

   o  borrower misrepresentation(s) and/or fraud

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

                                     - 13 -

<PAGE>

the event of  foreclosure,  which  shortfall  would decrease the value of assets
held by the Company and could  negatively  impact the  Company's  ability to pay
interest on the certificates.

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

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

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

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

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

      We Are Subject to the Risks  Associated with  Fluctuations in National and
      Local Economic Conditions.
      --------------------------------------------------------------------------
      The mortgage  lending  industry is subject to  increased  credit risks and
rates of foreclosures during economic downturns. In addition, because we provide
mortgages to churches and other religious  organizations  who generally  receive
financing through charitable contributions, our financial results are subject to
fluctuations  based on a lack of consumer  confidence  or a severe or  prolonged
national or regional  recession.  As a result of these and other  circumstances,
our  potential  borrowers  may decide to defer or terminate  plans for financing
their  properties.  In addition,  during such economic times we may be unable to
locate as many  credit-worthy  borrowers.  In  addition,  we  believe  the risks
associated with our business are more severe during periods of economic slowdown
or  recession  if these  periods are  accompanied  by  declining  values in real
estate. For example,  declining real estate values would likely reduce the level
of new loan  originations,  since  borrowers often use increases in the value of
their existing properties to support the purchase of or investment in additional
properties. Borrowers may also be less able to pay principal and interest on our
loans if the real estate economy  weakens,  which could result in higher default
rates.  Higher  default rates could  adversely  affect the Company's  results of
operations,  which could negatively impact the Company's ability to pay interest
on  the  certificates.  Further,  declining  real  estate  values  significantly
increase  the  likelihood  that we will  incur  losses in the  event of  default
because the value of our  collateral may be  insufficient  to cover our basis in
the investment.

      The Company Faces Certain Risks and Uncertainties Related to Financing and
      Liquidity,  and These  Volatilities Could Have an Impact on Its Operations
      and Its Ability to Maintain its  Long-term  Capital  Needs  and/or  Secure
      Additional Financing.
      --------------------------------------------------------------------------
      The Company  faces certain risks and  uncertainties,  particularly  during
volatile market conditions,  such as the dramatic changes in interest rates that
have occurred  recently.  In addition,  liquidity has tightened in all financial
markets, including the debt and equity markets. These volatilities could have an
impact  on  operations  to  the  extent  that  the  Company  experiences  slower
maturities  or  repayment  of  mortgage  loans,  illiquid  markets  for our bond
portfolio,  or a higher  redemption rates on our secured  investor  certificates
than has been the case historically.

      The  Company's  operating  performance  is affected by our ability to earn
interest and origination  fees in excess of what we pay and to match  maturities
of our long-term debt with  maturities of our mortgage loans and bond portfolio,
as well as

                                     - 14 -

<PAGE>

available amounts from our line of credit.  While we currently do not expect any
difficulties,  it is  possible  in these  uncertain  times  that  the  Company's
revolving  line of credit could fail to fund a borrowing  request or that Beacon
Bank would be unable to find funding  participants.  Such events could adversely
affect  our  ability  to access  funds or  increased  amounts  of funds from the
revolving  credit  facility  when  needed.  In  addition,  the Company may incur
additional  indebtedness,  particularly through the sale of its secured investor
certificates,  but the success of such an offering is  uncertain  in the current
economic  climate.  Moreover,  the Company may need to increase  the size of its
offering in order to meet its  capital  needs,  which  could harm our  financial
condition or creditworthiness.

      Our Business May Be Adversely  Affected if Our Borrowers  Become Insolvent
      or Bankrupt.
      --------------------------------------------------------------------------
      If any of our  borrowers  become  insolvent  or bankrupt,  the  borrower's
mortgage  payments will be delayed and may cease entirely.  For example,  due to
the difficult and uncertain  national and economic  conditions,  many  companies
have  been  forced to cut  employee  salaries  and many  jobs  have been  either
temporarily  or permanently  eliminated.  Because our borrowers are churches and
other religious organizations who generally receive financing through charitable
contributions,  if their members experience a decrease in pay or lose their jobs
and are unable to secure new ones,  they may make fewer or no  contributions  to
our borrowers,  which could result in the borrower's  inability to make mortgage
payments  or make  them on  time.  In  those  situations,  we may be  forced  to
foreclose  on the  mortgage  and take legal  title to the real  estate and incur
expenses  related to the  foreclosure  and  disposition  of the  property.  Such
increased  expenses  paired with possible  lower real estate values (having been
reduced by the foregoing  expenses) could adversely affect the Company's results
of  operations,  which  could  negatively  impact the  Company's  ability to pay
interest on the certificates.

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

Risks Related to Mortgage Lending to Churches

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

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

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

Risks Related to Environmental Laws

      We May Face Liability under Environmental Laws.
      ----------------------------------------------
      Under  federal,  state and local laws and  regulations,  a secured  lender
(like us) may be liable, under certain limited  circumstances,  for the costs of
removal or remediation of certain  hazardous or toxic substances and other costs
(including  government  fines and  injuries to persons and  adjacent  property).
Liability may

                                     - 15 -

<PAGE>

be imposed whether or not the owner or lender knew of, or was  responsible  for,
the presence of  hazardous  or toxic  substances.  The costs of  remediation  or
removal of hazardous or toxic  substances,  or of fines for personal or property
damages,  may be  substantial  and  material  to our  business  operations.  The
presence of hazardous or toxic substances,  or the failure to promptly remediate
such  substances,  may  adversely  affect  our  ability  to resell  real  estate
collateral after foreclosure or could cause us to forego foreclosure.  This is a
changing area of the law. The courts have found both in favor and against lender
liability  in  this  area  under  various  factual  scenarios.   We  require  an
environmental  database check on all properties to be used as collateral for our
mortgage loans.

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

Future Changes in Tax Laws May Affect Our REIT Status

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

                                     - 16 -

<PAGE>

                                 WHO MAY INVEST

      Who May Purchase  Certificates.  You should purchase  certificates only if
you are  prepared  to hold the  certificates  until  maturity,  only if you have
significant  financial  means,  and  only if you  have  no  immediate  need  for
liquidity  of  your  investment.   We  have  established  financial  suitability
standards for investors desiring to purchase  certificates.  You may purchase up
to $5,000 of  certificates  only if you have either (i) a minimum  annual  gross
income (without regard to your investment in shares or certificates) of at least
$45,000 and a net worth (exclusive of home, home furnishings and automobiles) of
$45,000;  or (ii) a net worth  (determined with the foregoing  exclusions) of at
least $150,000.  You may purchase more than $5,000 of  certificates  only if you
have  either:  (i) a minimum  annual  gross  income of  (without  regard to your
investment  in  shares  or  certificates)  at  least  $70,000  and a  net  worth
(exclusive of home, home furnishings and automobiles) of $70,000;  or (ii) a net
worth  (determined  with  the  foregoing   exclusions)  of  at  least  $250,000.
Suitability standards may be higher in some states.  Potential investors who are
residents  of  Idaho,  Iowa,  Kansas or  Washington  should  read  Exhibit B for
suitability requirements particular to their state.

      In addition to the above suitability  standards,  the Office of the Kansas
Securities   Commissioner  recommends  that  you  should  limit  your  aggregate
investment in our  Certificates  and other similar  investments to not more than
10% of your  liquid  net worth.  Liquid net worth is defined as that  portion of
your total net worth (total assets minus total liabilities) that is comprised of
cash, cash equivalents and readily marketable securities.

      In  addition to the above  suitability  standards,  residents  of Iowa and
Texas are limited to investing no more than 10% of their net worth (exclusive of
home, home furnishings and automobiles) in our certificates.

      We may not complete a sale of certificates  until five days after you have
received a prospectus.  We will refund your investment upon your request,  which
we must  receive  within  five  days  after you  subscribe,  if you  received  a
prospectus only at the time of subscription.

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

                                     - 17 -

<PAGE>

                                 USE OF PROCEEDS

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

                                                         Total        Percent
                                                       -----------  -----------
            Gross Offering Proceeds (1)                $20,000,000       100.00%

            Less Expenses                                  700,000         3.50%
                 Selling Commissions (2)
                 Underwriter's Expense Allowance (3)       120,000          .60%
                 Offering Expenses (4)                     100,000          .50%
                                                       -----------  -----------
            Total Public Offering-Related Expenses         920,000         4.60%
                                                       -----------  -----------

            Amount Available for Investment (5)        $19,080,000        95.40%
                                                       ===========  ===========

----------

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

(2)   We  will  pay  the  underwriter  a  sales   commission  of  2.75%  and  an
      underwriting  management  fee  equal to .75% of the  principal  amount  of
      certificates sold.

(3)   We will pay the underwriter a  non-accountable  expense allowance of up to
      $120,000,  if all of the  certificates are sold,  payable as follows:  (i)
      $10,000 is payable upon the sale of each  $1,000,000 of certificates up to
      the sale of $10,000,000 of  certificates;  and (ii) $2,000 is payable upon
      the sale of each additional $1,000,000 of certificates up to completion of
      the sale of all  certificates  offered  hereby or the  termination of this
      offering, whichever is first.

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

(5)   The principal  purpose of this offering is to raise capital to allow us to
      make  mortgage  loans  to  churches  and/or  to other  non-profits  and to
      purchase mortgage bonds issued by churches. We presently expect to use all
      of the net proceeds for this purpose, regardless of the amount of proceeds
      raised in this  offering.  Because it is possible that it may take time to
      invest the proceeds in this manner,  however, we would in that case invest
      the net  proceeds  in  permitted  temporary  investments  and may use some
      portion for working capital purposes including, but not limited to: paying
      down our line of credit,  redeeming  our equity  securities  and  repaying
      maturing certificates.  Our line of credit has an adjustable interest rate
      that at September 30, 2008 was 5.0% on the $4.2 million  outstanding.  The
      Series A and Series B Secured Investor Certificates bear interest at rates
      ranging  from  4.50% to 7.50% and have  maturities  ranging  from 3 months
      years to 12  years.  However,  we will use no more  than 15% of the  gross
      proceeds  of this  offering  to pay  interest  on  certificates  and repay
      principal to certificate holders.

                                     - 18 -

<PAGE>

                     COMPENSATION TO ADVISOR AND AFFILIATES

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

                              ADVISOR COMPENSATION

<TABLE>
<CAPTION>
ITEM OF
COMPENSATION               RECIPIENT     AMOUNT OR METHOD OF COMPENSATION
------------               ---------     --------------------------------
<S>                        <C>           <C>
Advisory Fee               Advisor       1.25% annually,  paid monthly,  of our average invested assets up to $35 million.
                                         This fee is reduced to 1.00% on assets  from $35  million to $50  million  and to
                                         .75% on assets over $50 million. Our advisor received advisory fees in the amount
                                         of $382,112 for the year ended  December  31,  2005,  $386,461 for the year ended
                                         December 31, 2006,  $413,007 for the year ended  December 31, 2007,  and $299,771
                                         for the nine months ended  September 30, 2008.  Assuming all of the  certificates
                                         are sold and our average invested assets were $50,000,000, the advisory fee would
                                         be $587,500 per year.  In addition,  assuming we had borrowed the maximum  amount
                                         permitted under our bylaws (not in excess of 300% of shareholders' equity, except
                                         under  certain  circumstances),  which at  September  30, 2008 would have been an
                                         additional $35,000,000 and assuming our average invested assets were $69,000,000,
                                         the advisory fee would be $730,000 per year.

Acquisition
Fees/Expenses              Advisor       In connection  with mortgage loans we make,  borrowers may be required to pay our
                                         advisor's  expenses  for  closing  and  other  loan-related  expenses,   such  as
                                         accounting  fees and appraisal  fees paid by our advisor to  independent  service
                                         providers.  Our advisor  may retain  payments  made by the  borrower in excess of
                                         costs,  but our bylaws limit the total of all  acquisition  fees and  acquisition
                                         expenses to a reasonable  amount and in no event in excess of six percent (6%) of
                                         the funds advanced to the borrower.

Advisor Loan
Origination Fee            Advisor       Up to one-half of the origination  fees collected from the borrower at closing in
                                         connection with each mortgage loan we make. Our advisor received origination fees
                                         in the amount of $78,820 for the year ended  December 31, 2005,  $187,021 for the
                                         year ended  December 31, 2006,  $36,514 for the year ended December 31, 2007, and
                                         $27,549 for the nine months  ended  September  30, 2008.  We cannot  estimate the
                                         total amount of loan  origination  fees that may be realized by our advisor,  but
                                         assuming all of the  certificates  are sold and we invest in that one-year period
                                         net proceeds of $19,080,000 in mortgage loans with an average  origination fee of
                                         3%, the loan  origination fees payable to our advisor in such year could be up to
                                         $286,200.  As our loans mature or are otherwise  repaid, we may make new loans to
                                         borrowers.  Loan  origination  fees would be payable to our advisor in with these
                                         loans.
</TABLE>

                                     - 19 -

<PAGE>

                             AFFILIATE COMPENSATION

<TABLE>
<CAPTION>
ITEM OF
COMPENSATION               RECIPIENT     AMOUNT OR METHOD OF COMPENSATION
------------               ---------     --------------------------------
<S>                        <C>           <C>
Commissions on the         Underwriter   2.75% of the principal amount of the  certificates.  The underwriter may re-allow
Sale of Certificates                     all or a portion of this  amount to other  participating  broker-dealers  who are
in this Offering                         members of the Financial Industry Regulatory Authority ("FINRA").

Non-Accountable            Underwriter   Up to  $120,000 to cover the  underwriter's  costs and  expenses  relating to the
Expense Allowance                        offer and sale of the  certificates  in this  offering,  payable as follows:  (i)
Relating to the Sale                     $10,000 paid upon the sale of each  $1,000,000 of  certificates up to the sale of
of Certificates in  this                 $10,000,000  of  certificates,  and  (ii)  $2,000  payable  upon the sale of each
Offering                                 additional  $1,000,000  of  certificates  up to the  completion  of  sale  of all
                                         certificates offered hereby or the termination of this offering, whichever occurs
                                         first.

Underwriter's              Underwriter   .75% of the  principal  amount of the  certificates,  payable only upon  original
Management Fee                           issuance.

Commissions and Expenses   Underwriter   Customary  mark-ups and mark-downs on first mortgage church bonds we purchase and
on First Mortgage Bonds                  sell through the  underwriter on the secondary  market,  and  commissions  earned
Purchased                                through the underwriter on church bonds we purchase in the primary market.
</TABLE>

                                     - 20 -

<PAGE>

                              CONFLICTS OF INTEREST

      We  are  subject  to  various  conflicts  of  interest  arising  from  our
relationship  with our advisor and the  underwriter.  Our  President,  Philip J.
Myers, is the President of both our advisor and the underwriter and thus is in a
position of control of both  entities.  In  addition,  Mr. Myers owns 20% of the
underwriter. Our advisor, its affiliates, our directors and the directors of our
advisor are not  restricted  from  engaging  for their own  accounts in business
activities  similar to ours.  Occasions may arise when our interests would be in
conflict  with  those  of one or more of the  directors,  our  advisor  or their
affiliates. Our directors, a majority of whom are independent,  will endeavor to
exercise their  fiduciary  duties in a manner that will preserve and protect our
rights and the  interests  of the  shareholders  in the event any  conflicts  of
interest arise. Any transactions between us and any director, our advisor or any
of their affiliates,  other than the purchase or sale, in the ordinary course of
our business, of church bonds from or through the underwriter,  will require the
approval  of a  majority  of  the  directors  who  are  not  interested  in  the
transaction.

Transactions with Affiliates and Related Parties

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

Compensation to Our Advisor and Conflicts of Interest

      We pay our advisor an annual  advisory fee equal to a 1.25% of our average
invested  assets up to $35  million.  This fee is reduced to 1.0% on assets from
$35 million to $50 million  and to .75% on assets over $50  million.  The fee is
not dependent on our advisor's  performance.  Our advisor  receives a portion of
the fees we make when we make or renew a mortgage  loan based upon a  percentage
of the amount paid by a mortgage  borrower as  "points,"  or  origination  fees.
Accordingly, a conflict of interest could arise since the retention, acquisition
or disposition of a particular loan could be  advantageous  to our advisor,  but
detrimental to us, or vice-versa.  Because origination fees are payable upon the
closing of the loan or its renewal, and the amount is dependent upon the size of
the mortgage  loan,  our advisor may have a conflict of interest in  negotiating
the terms of the loan and in determining the appropriate  amount of indebtedness
to be incurred by the borrower.

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

Compensation to the Underwriter and Conflicts of Interest

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

Our Affiliates May Compete with Us

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

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

                                     - 21 -

<PAGE>

loan for any reason, or if the prospective  borrower  independently  declines to
accept  our  lending,  then the  underwriter  or its  affiliates  will  have the
opportunity to provide financing to that prospective borrower.

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

Non Arm's-Length Agreements

      Many  agreements  and  arrangements  we  have  with  our  advisor  and its
affiliates,  including  those relating to  compensation,  were not negotiated at
arm's-length. The conflicts or potential conflicts arising from these agreements
and  arrangements are mitigated by the following  factors:  (i) our bylaws limit
our  operating  expenses  to an amount that does not exceed the greater of 2% of
our  average  invested  assets or 25% of our net income  unless the  independent
directors  approve a higher amount and disclose the justification for the higher
expenses to our  investors;  (ii) our advisor  seeks to  structure  its business
relationships  so as to be competitive  with other programs in the  marketplace;
and (iii) the agreements and  arrangements are subject to approval by a majority
of our independent directors.

Lack of Separate Legal Representation

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

Shared Operations Facilities

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

       Market for Common Equity and Related Stockholder Matters and Small
                Business Issuer Purchases of Equity Securities.

Outstanding Securities

      As of  February  29,  2008,  2,493,595  shares  of our  common  stock  and
$22,831,000 of secured investor certificates were issued and outstanding. We did
not sell any securities in 2007.

Holders of Our Common Shares

      As of  February  29,  2008,  we had 1,043  record  holders of our $.01 par
common stock.

Lack of Liquidity and Inconsistent Public Market Price

      Our common  stock is not  currently  listed or traded on any  exchange  or
market and is not quoted on the National Association of Securities Dealers, Inc.
Automated  Quotation System  ("NASDAQ"),  and it is not expected that a material
market for the shares will develop any time soon.  "Pink Sheet" price quotations
for our stock under the symbol "ACMC" were made at certain isolated times during
2007 by other  broker-dealers at prices as low as $4.45 per share and as high as
$7.80 per share. In addition,  the market for REIT securities  historically  has
been  less  liquid  than  non-real  estate  types  of   publicly-traded   equity
securities.  Because of such  illiquidity  and the fact that the shares would be
valued by  market-makers  (if a material market develops) based on market forces
which consider  various  factors  beyond our control,  there can be no assurance
that the  market  value of the  shares  at any given  time  would be the same or
higher than the public  purchase  price of our shares.  In addition,  the market
price,  if a material  market  develops,  could decline if the yields from other
competitive investments exceed the actual dividends paid by us on our shares.

                                     - 22 -

<PAGE>

                                  DISTRIBUTIONS

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

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

      We began making regular  quarterly  distributions  to our shareholders for
the period of operations ended June 30, 1996. Distributions for prior years, and
the  period  ended  September  30,  2008,  and the yield and  annualized  yield,
respectively,  represented by such distributions (assuming shares were purchased
for $10.00 per share), are as follows:

      --------------------------------------------------------------------
                                    Dollar Amount              Yield
                                     Distributed             Per Share
      For Year Ended:               Per Share(1):           Represented:
      --------------------------------------------------------------------
      December 31, 1996                0.6646                   9.375%
      --------------------------------------------------------------------
      December 31, 1997                0.9475                   9.475%
      --------------------------------------------------------------------
      December 31, 1998                0.8906                   8.906%
      --------------------------------------------------------------------
      December 31, 1999                0.8500                    8.50%
      --------------------------------------------------------------------
      December 31, 2000                0.8250                    8.25%
      --------------------------------------------------------------------
      December 31, 2001                0.8313                  8.3125%
      --------------------------------------------------------------------
      December 31, 2002                0.7688                  7.6875%
      --------------------------------------------------------------------
      December 31, 2003                0.6500                    6.50%
      --------------------------------------------------------------------
      December 31, 2004                0.6688                  6.6875%
      --------------------------------------------------------------------
      December 31, 2005                0.6188                  6.1875%
      --------------------------------------------------------------------
      December 31, 2006                0.5875                   5.875%
      --------------------------------------------------------------------
      December 31, 2007                0.2625                   2.625%
      --------------------------------------------------------------------
      September 30, 2008               0.3000                    4.00% (2)
      --------------------------------------------------------------------

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

      (2)   Represents  annualized yield for the nine months ended September 30,
            2008.

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

      During any period where our shares of common  stock are being  offered and
sold and the proceeds therefrom  accumulated for the purpose of funding loans to
be made  by us,  the  relative  yield  generated  by such  capital,  and,  thus,
dividends (if any) to  shareholders,  could be less than expected  until we have
fully  invested  such funds  into  loans.  We seek to address  this issue by (i)
collecting  from borrowers an origination  fee at the time a loan is made,  (ii)
timing our lending  activities to coincide as much as possible with sales of our
securities,  and (iii) investing our undeployed  capital in permitted  temporary
investments  that offer the highest  yields  together with safety and liquidity.
However,  there can be no assurance that these  strategies  will improve current
yields to our shareholders. In order to qualify for the beneficial tax treatment
afforded  real estate  investment  trusts by the Internal  Revenue  Code, we are
required to pay  dividends to holders of our shares in annual  amounts which are
equal to at least 90% of our "real estate  investment trust taxable income." For
the fiscal year ended December 31, 2007, we distributed substantially all of our
taxable income to our shareholders in the form of quarterly dividends. We intend
to continue  distributing  virtually all of such income to our shareholders on a
quarterly basis,  subject to (i) limitations  imposed by

                                     - 23 -

<PAGE>

applicable state law, and (ii) the factors  identified above. The portion of any
dividend  that exceeds our  earnings and profits will be  considered a return of
capital and will not  currently  be subject to federal  income tax to the extent
that such dividends do not exceed a shareholder's basis in their shares.

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

Equity Compensation Plans

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

                                     - 24 -

<PAGE>

                                 CAPITALIZATION

The following  table sets forth our  capitalization  as of December 31, 2007 and
September  30,  2008 and as of  December  31,  2007 and  September  30,  2008 as
adjusted to give effect to the sale of all of the  certificates  offered hereby,
of which there can be no assurance.

<TABLE>
<CAPTION>
                                      December 31,     December 31,    September 30,    September 30,
                                          2007             2007            2008             2008
                                         Actual       As Adjusted(1)      Actual       As Adjusted(1)
                                     --------------   --------------   -------------   --------------
<S>                                  <C>              <C>              <C>             <C>
Long Term Debt                       $   20,634,000   $   40,634,000   $  19,451,000   $   39,451,000

Current Liabilities                       5,799,055        5,799,055       7,588,296        7,588,296

Deferred Income                             596,164          596,164         577,614          577,614

Shareholder's Equity                         24,936           24,936          24,721           24,721
Common Stock, $.01 par value per
share; 30,000,000 shares
authorized; issued and outstanding
2,493,595 shares at December 31,
2007 and 2,472,081 shares at
September 30, 2008

Additional Paid-In Capital               22,927,644       22,927,644      22,814,911       22,814,911

Accumulated Deficit                      (1,699,000)      (1,699,000)     (2,382,046)      (2,382,046)
                                     --------------   --------------   -------------   --------------

Total Shareholder's Equity               21,253,580       21,253,580      20,457,586       20,457,586
                                     ==============   ==============   =============   ==============

   Total Capitalization              $   48,282,799   $   68,282,799   $  48,074,496   $   68,074,496
                                     ==============   ==============   =============   ==============
</TABLE>

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

                                     - 25 -

<PAGE>

                             SELECTED FINANCIAL DATA

      The selected  financial data  presented  below is derived from our audited
financial  statements at and for the years ended December 31, 2006 and 2007. The
selected financial data is from our unaudited financial statement information at
and for the nine months ended  September 30, 2008. The financial  statements are
included in the  appendix.  You should refer to the  financial  statements,  and
notes thereto, for a more detailed presentation of financial information.

<TABLE>
<CAPTION>
                                                      Year Ended December 31,      Nine Months
                                                    ---------------------------       Ended
                                                                                  September 30,
                                                        2006           2007           2008
                                                    ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>
Statement of Operations Data

Interest Income                                     $  3,927,765   $  3,947,690   $   2,801,558

Interest Expense                                       1,724,986      1,778,715       1,286,118
                                                    ------------   ------------   -------------

Net Interest Income                                    2,202,779      2,168,975       1,515,440

Provision for losses on mortgage loans receivable
and bonds                                                  8,682        133,101         231,730
                                                    ------------   ------------   -------------

Net Interest Income after provision for losses on
mortgage loans receivable and bonds                    2,194,097      2,035,874       1,283,710

Operating Expenses                                     1,039,929      1,182,684       1,222,981
                                                    ------------   ------------   -------------

Net Income                                          $  1,154,168   $    853,190   $      60,729
                                                    ============   ============   =============

Income per Common Share                             $        .46   $        .34   $         .02

Weighted Average Common Shares Outstanding             2,536,351      2,493,595       2,483,231

Dividends Declared                                  $  1,485,275   $    654,572   $     743,776

Dividends Declared per Share                        $        .59   $        .26   $         .30
</TABLE>

<TABLE>
<CAPTION>
                                                                                   Nine Months
                                                       Year Ended December 31,        Ended
                                                    ---------------------------   September 30,
                                                        2006           2007           2008
                                                    ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>
Balance Sheet Data:
Assets:
   Cash and Cash Equivalents                        $    232,258   $    285,118   $     516,190
   Current maturities of loans receivable              3,073,619        907,812         646,016
   Current maturities of bond portfolio                   79,000         41,000          53,000
   Loans Receivable, net of current maturities        34,779,117     33,061,115      33,124,302
   Bonds Receivable, net of current maturities         9,471,697     11,222,713      11,629,585
   Accounts Receivable                                   136,709        112,546         119,189
   Interest Receivable                                   164,923        151,105         153,595
   Prepaid Expense                                         8,372          7,072          15,358
   Real-Estate Held for Sale                           1,125,190      1,566,561       1,165,125
   Deferred Offering Costs                               852,720        927,757         652,136
   Deferred Tax Asset                                     60,000            -0-             -0-
                                                    ------------   ------------   -------------

Total Assets                                        $ 49,983,605   $ 48,282,799   $  48,074,496
                                                    ============   ============   =============

Liabilities and Shareholder's Equity
   Account Payable                                  $     26,311   $     46,963   $      31,328
   Investors Saver Certificates                       26,638,000     22,831,000      21,953,000
   Note payable, line of credit                        1,166,000      3,350,000       4,200,000
   Mortgage Loan Commitment                               27,000         50,000         577,595
   Deferred Income                                       673,914        626,576         607,779
   Dividends Payable                                     397,418        124,680         247,208
   Shareholder's Equity                               21,054,962     21,253,580      20,457,586
                                                    ------------   ------------   -------------
                                                    $ 49,983,605   $ 48,282,799   $  48,074,496
                                                    ============   ============   =============
</TABLE>

                                     - 26 -

<PAGE>

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

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

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

Management's Discussion and Analysis

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

      During  the nine  months  ended  September  30,  2008  and the year  ended
December  31,  2007 our total  assets  decreased  by  $208,000  and  $1,701,000,
respectively  due to an increase in provisions  for losses on our bond portfolio
and a decrease in mortgage loans  receivable  resulting from payments  exceeding
new issuances.  Our current liabilities  increased by $1,789,000 and $951,000 at
September  30,  2008  and  December  31,  2007,  respectively  due to  increased
borrowings  on our line of credit.  Our  non-current  liabilities  decreased  by
$1,202,000  and  $2,851,000  at  September  30,  2008  and  December  31,  2007,
respectively, due to maturation of our secured investor certificates.

      Since our inception, we experienced our highest quarterly dividend payment
for the  quarter  ended  December  31,  1997 and our lowest  quarterly  dividend
payments  for the  quarters  ended June 30, 2007 and  September  30,  2007.  The
quarterly  dividend  paid for each share held of record on December 31, 1997 was
$.25625  per share  representing  an  annualized  yield of 10.25% for each share
purchased at $10 per share. The quarterly  dividend payments for each share held
of record on June 30, 2007 and  September  30, 2007 were $.025  representing  an
annualized  yield of 1.00%  for  each  share  purchased  at $10 per  share.  The
dividend payment for December 31, 1997 was significantly higher than the average
dividend amount due to the large number of loans funded during the quarter and a
corresponding high level of origination  income earned during the quarter.  Each
loan funded during the quarter generates  origination  income,  which is due and
payable to shareholders as "Taxable Income" even though  origination  income was
not  recognized  in  its  entirety  for  the  period  under  generally  accepted
accounting  principals in the United States of America ("GAAP").  Recognition of
origination  income under GAAP must be deferred  over the expected  life of each
loan. By way of further comparison,  the dividend payments made to June 30, 2007
and September 30, 2007 shareholders of record were significantly  lower than the
average dividend amount due directly to losses related to the sale of foreclosed
property in Coupland, Texas.

Results of Operations

      Fiscal 2008 Nine Months Compared to Fiscal 2007 Nine Months

      Net income for the Company's  nine month periods ended  September 30, 2008
and 2007 was approximately $61,000 and $817,000, respectively, on total revenues
of approximately $2,802,000 and $3,034,000, respectively. Interest income earned
on our portfolio of loans was  approximately  $2,157,000  and $2,306,000 for the
nine month  periods  ended  September  30,  2008 and 2007,  respectively.  As of
September 30, 2008 the Company's  loans  receivable  have interest rates ranging
from 5.00% to  12.00%,  with an  average,  principal-adjusted  interest  rate of
8.70%.  The Company's bond portfolio has an average current yield of 7.91% as of
September 30, 2008. As of September  30, 2007,  the average,  principal-adjusted
interest  rate on the  Company's  portfolio of loans was 8.82% and the Company's
portfolio  of bonds had an  average  current  yield of 7.52%.  The  decrease  in
interest  income was largely due to the repayment of mortgage  loans without new
loans issued and the general  decline in interest  rates  throughout  the latter
part of 2007.  Interest expense was approximately  $1,286,000 and $1,334,000 for
the nine month periods  ended  September  30, 2008 and 2007,  respectively.  The
decrease in interest  was due to the maturity of secured  investor  certificates
and the decline in the interest rate on our line of credit.

                                     - 27 -

<PAGE>

      Net interest income for the nine months ended September 30, 2008 decreased
to  approximately  $1,284,000  compared to $1,667,000 at September 30, 2007. The
decrease relates to changes in the provision for losses on our bond portfolio of
$200,000,  a reduction in interest  income on our loan  portfolio,  due to lower
interest rate and loan balances outstanding and a reduction in income related to
loan originations due to fewer loans being issued.

      Operating  expenses for the nine months ended September 30, 2008 increased
to  approximately  $1,223,000  compared to $850,000 at September  30, 2007.  The
increase relates to changes in impairment  charges for real estate held for sale
of approximately  $144,000,  professional fees of approximately  $69,000,  costs
associated  with  real  estate  held  for  sale of  approximately  $22,000,  and
amortization  expense of approximately  $157,000,  which includes the loan costs
related to the previous  line of credit which were expensed once the new line of
credit was obtained with Beacon Bank.

      Results of Operations - 2007

      Since we began active business  operations on April 15, 1996, we have paid
46  consecutive  quarterly  dividend  payments to  shareholders.  These dividend
payments have resulted in an average annual return of 7.482% to shareholders who
purchased  shares in our public  offerings  at $10 per share.  Each loan  funded
during the  quarter  generates  origination  income  which is due and payable to
shareholders as taxable income even though origination income was not recognized
in its entirety for the period under generally  accepted  accounting  principles
("GAAP").  We anticipate  distributing  all of our taxable  income (100%) in the
form of dividends to our shareholders in the foreseeable  future to maintain our
REIT status and to provide a reliable income source to our shareholders.

      Net income under GAAP  accounting for our year ended December 31, 2007 was
$853,190 on total revenues of $3,947,690 compared to net income of $1,154,168 on
total revenues of $3,927,765 for the year ended December 31, 2006. This decrease
in net  income  was  primarily  due to  increased  loan  loss  and  real  estate
impairment reserves. We disposed of two properties in 2007 and one in January of
2008. We believe due to a general economic downturn in the economy, along with a
depressed  real estate  market,  the  availability  of qualified  buyers for our
current foreclosed  properties has been reduced since no viable offers have been
made.  We expect to foreclose on three  additional  properties  in 2008 and will
incur  costs to secure and prepare  these  properties  for sale.  We exhaust all
options available to us to before  proceeding to foreclosure.  We do not foresee
any additional increase in foreclosures other than these three churches.

      Interest income earned on the Company's  portfolio of loans was $3,022,695
for the year ended  December 31, 2007,  compared to  $2,854,477  for 2006.  This
increase in interest income was due to the fact that 8 new loans were originated
in the fiscal year ended  December 31, 2007.  Excluded from revenue for the year
ended  December  31, 2007 is $107,369 of  origination  income,  or  "points," we
received. Recognition of origination income under GAAP must be deferred over the
expected life of each loan. However, under tax principles, origination income is
recognized  in the period  received.  Accordingly,  because our status as a REIT
requires,  among other things,  the distribution to shareholders of at least 90%
of taxable income,  the dividends  declared and paid to our shareholders for the
quarters  ended March 31, 2007,  June 30, 2007,  September 30, 2007 and December
31, 2007 included  origination  income even though it was not  recognized in its
entirety as income for the period under GAAP.

      Net  interest  income  for  2007  decreased  to  approximately  $2,036,000
compared to $2,194,000 for 2006. The decrease in net interest  income relates to
the  increase  in  interest  expense due to  increases  in the  average  amounts
outstanding  on the line of  credit,  partially  offset  by a  reduction  in the
outstanding  balance of  secured  investor  certificates.  The  decrease  in net
interest  income also reflects the reserve for a bond that the Company owns, the
issuer of which had entered into a Chapter 11 bankruptcy.

      Our  operating  expenses for our fiscal year ended  December 31, 2007 were
$1,315,785  compared to $1,048,611  for our fiscal year ended December 31, 2006.
This increase in operating expenses was primarily a result of provisions related
to mortgage and bond  receivables as well as costs  associated  with  foreclosed
properties.

      Our Board of  Directors  declared  dividends  of $.1625  for each share of
record on March 31, 2007,  $.025 for each share held of record on June 30, 2007,
$.025 for each share held of record  September 30, 2007 and $.050 for each share
held of record on December 31, 2007. Based on the quarters ended March 31, 2007,
June 30, 2007,  September  30, 2007 and December 31, 2007,  the  dividends  paid
represented a 6.50%,  1.00%,  1.00% and 2.00 % annualized yield to shareholders,
respectively,  for an effective overall annual yield of 2.625% in 2007. In 2007,
and  especially in the second,  third and fourth  quarters of 2007, our dividend
yield was  significantly  lower than in prior  periods.  This decrease  resulted
directly from the loss related to the sale of  foreclosed  property in Coupland,
Texas.  In addition,  58% of dividends paid to  shareholders in 2007 was taxable
ordinary dividends,  while 42% of the dividends paid to shareholders in 2007 was
return of capital and is reported as non-dividend distributions.

                                     - 28 -

<PAGE>

      The  Company  expects  dividends  to be paid in 2008 will return to normal
historical  payout  levels prior to 2007.  Revenues  should  increase as we fund
additional  loans  through our line of credit and we do not expect a substantial
increase in our loan loss or real estate impairment reserves.

      Results of Operations - 2006

      Net income for our fiscal year ended  December 31, 2006 was  $1,154,168 on
total  revenues  of  $3,927,765  compared  to  $737,141  on  total  revenues  of
$3,736,738 for the year ended December 31, 2005. This increase was primarily due
to  increased  funding  of  mortgage  loans and a decrease  in the loan  reserve
amount.  Interest  income  earned  on  the  Company's  portfolio  of  loans  was
$2,854,477  for the year ended  December 31, 2006,  compared to  $2,748,247  for
2005.  This  increase was due to the fact that 22 new loans were  originated  in
fiscal year ended  December 31, 2006.  Excluded  from revenue for the year ended
December 31, 2006 is $234,175 of origination  income,  or "points," we received.
Recognition  of  origination  income  under  "GAAP"  must be  deferred  over the
expected life of each loan. However, under tax principles, origination income is
recognized  in the period  received.  Accordingly,  because our status as a real
estate  investment  trust  requires,  among other things,  the  distribution  to
shareholders  of at least 90% of "Taxable  Income," the  dividends  declared and
paid to our  shareholders  for the quarters ended March 31, 2006, June 30, 2006,
September 30, 2006 and December 31, 2006 included origination income even though
it was not  recognized in its entirety as income for the period under GAAP.  Our
operating  expenses for our fiscal year ended December 31, 2006 were  $1,048,611
compared  to  $1,619,508  for our fiscal  year ended  December  31,  2005.  This
decrease was primarily a result of a decrease in our loan loss reserve amount.

      Our Board of  Directors  declared  dividends  of $.1375  for each share of
record on March 31, 2006, $.1375 for each share held of record on June 30, 2006,
$.153125 for each share held of record  September 30, 2006 and $.159375 for each
share held of record on December 31, 2006. Based on the quarters ended March 31,
2006,  June 30, 2006,  September  30, 2006 and December 31, 2006,  the dividends
paid  represented  a  5.50%,  5.50%,  6.125%  and  6.375 %  annualized  yield to
shareholders,  respectively,  for an effective overall annual yield of 5.875% in
2006.  In 2006,  and  especially in the first and second  quarters of 2006,  our
dividend  yield was  significantly  lower than in prior  periods.  This decrease
resulted  in part from the large  cash  balances  we  received  from our  public
offering  of secured  investor  certificates,  which  were held in money  market
instruments  pending  deployment in new loans.  Because  interest  earned in our
money market account is substantially lower than interest earned on our mortgage
loans,  interest income earned was lower than in prior periods.  Dividend yields
in 2006 were also  largely  influenced  by the funding of numerous  new loans at
interest rates significantly lower than those funded in earlier years.

      We do not expect  additional loan loss reserve  increases in the first two
quarters of 2007. The Company  presently  expects that our revenues in 2007 will
be similar to those of the first two quarters of 2006.

Liquidity and Capital Resources

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

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

      Currently,   our  bond  portfolio   comprises  25%  of  our  assets  under
management.  The total principal amount of mortgage-  secured debt securities we
purchase from churches and other non-profit  religious  organizations is limited
to 30% of our Average Invested Assets. The total principal amount outstanding is
$11,392,790  as of December 31, 2007.  We earned  approximately  $763,000 on our
bond  portfolio in 2007.  Prior to 2007 we did not experience any loss of income
from our bond portfolio.

      We  currently  own  $2,035,000  First  Mortgage  Bonds issued by St. Agnes
Missionary Baptist Church. St. Agnes has defaulted on its payment obligations to
bondholders.   The  church  subsequently   commenced  a  Chapter  11  bankruptcy
reorganization  proceeding in November 2007.  The Company,  along with all other
bondholders, has a superior lien over all

                                     - 29 -

<PAGE>

other  creditors.  We did not  receive  our  August or  November  2007  interest
payments from St. Agnes. We are not accruing any missed  interest  payments from
the bonds which totaled approximately $34,000 for both August and November 2007.
We foresee that we will not receive any interest payments from St. Agnes through
the first half of 2008. We have reserved  $300,000 against the principal balance
of the bonds at September 30, 2008.

      The  church  has  listed  all  three  of its  properties  for  sale for an
aggregate price of $19,166,668.  The bondholders are currently owed  $13,027,000
excluding any accrued interest, fees or expenses.  Herring Bank, Amarillo, Texas
is  trustee  for the  first  mortgage  bondholders.  Herring  Bank and its legal
counsel are monitoring the bankruptcy  process and will advise the  bondholder's
of the  church's  re-organization  plans  once  they  are made  available.  Once
additional  information regarding the Church's  reorganization plan is provided,
we will  determine  whether  an  additional  valuation  adjustment  for the bond
investment should be recorded.

      In  addition,  we are  able to  borrow  funds in an  amount  up to 300% of
shareholder's  equity (in the absence of a  satisfactory  showing  that a higher
level of borrowing is appropriate;  any excess in borrowing over such 300% level
must be approved by a majority of the  Independent  Directors  and  disclosed to
shareholders  in the next  quarterly  report along with  justification  for such
excess)  in  order  to  increase  our  lending  capacity.  We  currently  have a
$15,000,000 secured revolving credit facility with KeyBank National Association,
Cleveland,  Ohio.  As of  December  31, 2007 we have an  outstanding  balance of
$3,350,000 against our line of credit. This credit line is secured by the pledge
of  approximately  $7,334,000 in principal amount of our first mortgage loans in
addition to any new mortgage loans funded with proceeds from the line.  Interest
on our line of credit is payable to KeyBank on a monthly basis.  We believe that
the rate at which we lend funds will  always be higher than the cost at which we
borrow the funds  (currently  our rate at which we can borrow  funds  under this
line of credit is 90-day LIBOR  interest  rate plus 1.50% and base rate loans at
..25% over prime rate).

      Based  on the  Company's  borrowing  base  adjusted  leverage  ratio  this
applicable margin can be adjusted,  on any date of determination,  either upward
or downward based on the following schedule:

<TABLE>
<CAPTION>
                                                 Per Annum Percentage for LIBOR   Per Annum Percentage for Base
            Total Leverage Ratio:                          Rate Loans:                     Rate Loans:
----------------------------------------------   ------------------------------   -----------------------------
<S>                                              <C>                              <C>
Greater than or equal to 60%                                 1.875%                          0.50%
Less than 60% but greater than or equal to 55%                1.50%                          0.25%
Less than 55%                                                 1.35%                          0.00%
</TABLE>

The total leverage  ratio is determined by dividing  total  liabilities by total
adjusted tangible asset value.

      However,  there can be no  assurance  that we can always lend funds out at
rates  higher  than the rate at which we borrow the  funds.  When we do carry an
outstanding  balance  on this line of credit we plan to  "pay-down"  any  future
borrowings  on  our  line  of  credit  by  (i)   negotiating   a  larger,   more
cost-advantageous  line of  credit  with  another  bank  and (ii)  applying  the
proceeds from principal  payments on our current loan portfolio payments and any
loan  re-payments.  Increases or decreases in the lending  rates  charged by our
bank sources as well as the increase or decrease in the rate of interest charged
on our loans has and likely will continue to impact interest income we will earn
and, accordingly, influence dividends declared by our Board of Directors.

      Our future  capital  needs are  expected  to be met by (i)  future  public
offerings of our shares and/or our certificates;  (ii) the repayment of existing
loans and bonds and (iii) borrowing under our existing line of credit.

Loan Loss Reserve Policy

      We  follow  a  loan  loss  reserve   policy  on  our  portfolio  of  loans
outstanding.  This critical  policy requires  complex  judgments and the need to
make estimates of future events, which may or may not materialize as planned. We
record mortgage loans receivable at their estimated net realizable value,  which
is the unpaid principal  balance less the allowance for mortgage loans. Our loan
policy  provides an  allowance  for  estimated  uncollectible  loans based on an
evaluation of the current status of the loan portfolio. This policy reserves for
principal amounts  outstanding on a particular loan if cumulative  interruptions
occur in the normal payment  schedule of a loan. Our policy will reserve for the
outstanding  principal  amount of a loan in our  portfolio  if the  amount is in
doubt of being  collected.  Additionally,  no interest  income is  recognized on
non-performing  loans that are in the foreclosure process. At December 31, 2007,
we reserved $72,056 against fourteen mortgage loans, of which four churches were
three or more mortgage  payments in arrears.  At September 30, 2008, we reserved
approximately $71,000 for

                                     - 30 -

<PAGE>

eleven  mortgage  loans,  of which  five  churches  are  three or more  mortgage
payments in arrears and one church is in the foreclosure process.

      The total value of non-performing  loans,  which are loans that are in the
foreclosure process or are no longer performing,  was approximately $238,000 and
$1,156,000 at September 30, 2008 and December 31, 2007, respectively. We believe
that the total  amount of  non-performing  loans is  adequately  secured  by the
underlying collateral.

      As of December 31, 2007, we had four first  mortgage  loans that are three
or more  payments  in  arrears.  Three of the loans are in the  process of being
foreclosed. The first loan has an outstanding balance of approximately $385,000.
The church  missed one  mortgage  payment in 2006 and ten  mortgage  payments in
2007.  We took  possession  of this  property in May 2008 and listed it for sale
through a local realtor.

      The second loan has an outstanding balance of approximately  $238,000. The
church  missed five  mortgage  payments  in 2007.  We obtained a deed in lieu of
foreclosure  from the church and have  recorded the deed in the county where the
church resides.  We took possession in May 2008 and listed it for sale through a
local realtor.

      The third loan has an outstanding balance of approximately  $383,000.  The
church  missed six  mortgage  payments in 2007.  We  initiated  the  foreclosure
process,  but on the day on which  we were to take  possession  through  Sheriff
Sale,  the  church  filed  bankruptcy.  Our  attorney  is in  contact  with  the
bankruptcy trustee, and we are awaiting the outcome of this process.

      The fourth loan has an outstanding balance of approximately  $150,000. The
church missed one payment in 2006 and two payments in 2007. The church submitted
a repayment plan which was accepted. We are monitoring the payment process. This
is the smallest loan in our loan portfolio.

      We  presently  expect our loan loss  reserves  to be adequate to cover all
losses. Listed below is our current loan loss reserve policy:

          Percentage of Loan
Incident  Reserved                Status of Loan
--------  ----------------------  ----------------------------------------------
1.        None                    Loan is current, no interruption in payments
                                  during history of the loan, ("interruption"
                                  means receipt by us more than 30 days after
                                  scheduled payment date).

2.        None                    Loan current, previous interruptions
                                  experienced, but none in the last six month
                                  period. Applies to restructured loans or loans
                                  given forebearance.

3.        None                    Loan current, previous interruptions
                                  experienced, but none in the last 90 day
                                  period.

4.        1.00%                   Loan serviced regularly, but 1 to 3 payments
                                  cumulative in arrears. Delinquency notice been
                                  sent.

5.        5.00%                   Loan serviced regularly, but 4 or 5 payments
                                  cumulative in arrears. Repayment plan
                                  requested.

6.        The greater of: (i)     Loan is declared to be in default. Foreclosure
          accumulated reserve     proceeding underway or imminent. Reserve
          during default period   amount dependent on value of collateral. All
          equal to principal      expenses related to enforcing loan agreements
          loan balance in excess  are expensed.
          of 65% of original
          collateral value; or
          (ii) 1% of the
          remaining principal
          balance each quarter
          during which the
          default remains in
          effect.

                                     - 31 -

<PAGE>

      The Company's  Advisor,  on an ongoing basis,  will review reserve amounts
under the policy stated above and determine the need, if any, to reserve amounts
in excess of its current policy. Any additional reserve amounts will be equal to
or greater than its current reserve policy. Loan loss reserves are recorded on a
quarterly basis.

Bond Loss Policy

      Bond loss  reserves are  estimated by  management  and are  determined  by
reviewing:  (i) payment history, (ii) our experience with defaulted bond issues,
(iii) the issuers payment history as well as (iv) historical trends.

Critical Accounting Policies and Estimates

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

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

      Of our  significant  accounting  policies  described  in the  notes to our
financial  statements included herewith,  we believe that the estimation of fair
value of our mortgage loans receivable and bond portfolio involves a high degree
of judgment.  We estimate the fair value of our mortgage loans  receivable to be
the same as the carrying value because of the substantial  activity/turnover  in
this  portfolio.  We do not consider the  availability of a market for a loan in
estimating  fair  value at this  time.  We  estimate  the fair value of the bond
portfolio to be the same as the carrying value, because there is no ready public
market for these  bonds and the bonds are  callable  at anytime by the issuer at
par. We do not consider  future cash flows,  the interest rate or the yield rate
of a loan or bond in estimating fair value. In addition,  the loan and bond loss
policy, previously discussed, is a critical accounting policy.

      Recognition of  origination  income under "GAAP" must be deferred over the
expected life of each loan. However, under tax principles, origination income is
recognized  in the period  received.  Accordingly,  because our status as a REIT
requires,  among other things,  the distribution to shareholders of at least 90%
of taxable income, the dividends declared and paid to our shareholders  included
origination  income even though it was not  recognized in its entirety as income
for the period under GAAP.

      We estimate the value of real estate we hold  pending  re-sale on a number
of factors.  We look at the current condition of the property as well as current
market  conditions in  determining a fair value.  Since  churches are single use
facilities  the listing price of the property may be lower than the total amount
owed to us. Attorney fees,  taxes,  utilities along with real estate  commission
fees will also reduce the amount we collect  from the sale of a property we have
acquired through foreclosure. The fair value of the real estate held for re-sale
includes estimates of expenses related to the sale of the real estate.

                                  OUR BUSINESS

General

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

                                     - 32 -

<PAGE>

funds and acquire mortgage secured investments  pursuant to our business plan as
additional  funds become  available from this offering,  and thereafter as funds
from loan repayments, bond maturities and other resources become available.

      We utilize American's unique  specialization in procuring,  qualifying and
servicing  church loans to enhance our  operations.  American  has  underwritten
first  mortgage  bonds for churches  throughout the United States since 1987. In
underwriting  church bonds,  American reviews financing  applications,  analyzes
prospective borrowers' financial capability, and structures,  markets and sells,
mortgage-backed  bond securities to the investing  public.  Since its inception,
American has underwritten  approximately  235 church bond  financings,  in which
approximately  $476,030,000  in first  mortgage  bonds  have been sold to public
investors.  The average size of church bond financings  underwritten by American
since its inception is approximately $2,026,000.

      Since our establishment, we have funded 165 mortgage loans to churches for
a total  amount of  $83,340,954.  As of September  30, 2008,  we had 76 mortgage
loans outstanding in the original aggregate  principal amount of $33,841,353 and
own church bonds having a face value of $12,018,000.

Financing Business

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

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

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

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

      o     charge  origination  fees,  or  "points,"  from the  borrower at the
            outset of a loan and upon any renewal of a loan;

      o     make a limited amount of higher-interest  rate second mortgage loans
            and construction loans to qualified borrowers; and

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

      Our  policies  limit the  amount of  second  mortgage  loans to 20% of our
average  invested  assets on the date any second  mortgage  loan is closed,  and
limit the amount of mortgage-secured  debt securities to 30% of average invested
assets  on the date of their  purchase.  All  other  mortgage  loans we make (or
church bonds  purchased for  investment)  will be secured by a first mortgage or
deed of trust on the  borrower's  real  property.  As of September 30, 2008, the
percentage  of  average  invested  assets  in  second  mortgage  loans,  and the
percentage of average invested assets in mortgage-secured  debt securities,  was
less than 1% and 26.1%  respectively.  As we attempt to make mortgage loans that
maximize  interest  income,  we may  make  longer-term  fixed-rate  loans in our
discretion in order to reduce the risk of downward interest rate fluctuations.

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

                                     - 33 -

<PAGE>

Current First Mortgage Loan Terms

      We offer prospective  borrowers a selection of loan types, which include a
choice of fixed or  variable  rates of interest  indexed to the prime rate,  the
U.S.  Treasury 10-Year Notes, or another generally  recognized  reference index,
and having  various  terms to  maturity,  origination  fees and other  terms and
conditions.  The  terms of loans we offer may be  changed  by our  advisor  as a
result  of  such  factors  as (i)  the  credit  quality  and  experience  of the
borrowers;  (ii) the terms of loans in our  portfolio;  (iii)  competition  from
other  lenders;  (iv)  anticipated  need to increase  the  overall  yield on our
mortgage  loan  portfolio;  (v) local and national  economic  factors;  and (vi)
actual experience in borrowers' demand for the loans. We currently make the loan
types described in the table below. This table describes material terms of loans
available  from us. The table does not purport to identify all  possible  terms,
rates,  and fees we may offer. We may modify the terms identified below or offer
loan terms different than those  identified  below.  Many loans are individually
negotiated and differ from the terms described below.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
            Loan Type                 Interest Rate (1)         Origination Fee (2)
-----------------------------------------------------------------------------------
<S>                         <C>                                 <C>
25/30 Year Term (3)         Fixed @ 8.75%/8.95% respectively            3.5%
-----------------------------------------------------------------------------------
20 Year Term (3)            Variable Annually @ Prime + 2.50%           3.5%
-----------------------------------------------------------------------------------
3 Year Renewable Term (4)   Fixed @ 8.25%                               3.0%
-----------------------------------------------------------------------------------
Construction 1 Year Term    Fixed @ 9.00%                               2.0%
-----------------------------------------------------------------------------------
</TABLE>

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

(2)   These are "target" fees; however, negotiation of these fees with borrowers
      often  occurs.  Origination  fees  are  generally  based  on the  original
      principal  amount of the loan and are  collected  from the borrower at the
      origination and renewal of loans, one-half of which is payable directly to
      our advisor.

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

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

                                     - 34 -

<PAGE>

Portfolio of the Company

      As of  December  31,  2008,  we had 76 first  mortgage  loans  aggregating
$36,304,688 in original  principal amount,  and purchased  $12,314,000  original
principal amount first mortgage bonds issued by churches.

The table below identifies,  by state, the loan amounts and amounts  outstanding
of the Company's first mortgage loans as of December 31, 2008.

                        American Church Mortgage Company
                                Current Portfolio
          ------------------------------------------------------------
                                     Principal Balance   Percentage of
          State      Loan Amount       a/o 12/31/2008        Total
          ------------------------------------------------------------

          AR       $   948,829.89      $   635,912.45        1.90%
          AZ       $ 1,325,000.00      $ 1,288,384.30        3.85%
          CA       $   865,000.00      $   819,351.93        2.45%
          CT       $   435,000.00      $   400,000.00        1.19%
          FL       $ 4,001,500.00      $ 3,300,968.70        9.85%
          GA       $ 1,555,000.00      $ 1,390,174.44        4.15%
          IL       $ 1,903,406.36      $ 1,816,845.06        5.42%
          IN       $ 1,505,000.00      $ 1,467,698.45        4.38%
          KY       $   620,000.00      $   590,000.00        1.76%
          LA       $   645,000.00      $   613,910.64        1.83%
          MA       $   440,000.00      $   390,925.42        1.17%
          MD       $ 1,515,000.00      $ 1,437,193.89        4.29%
          MI       $ 2,353,500.00      $ 2,285,120.43        6.82%
          MN       $   431,250.00      $   426,977.54        1.27%
          NC       $ 1,630,915.00      $ 1,533,296.44        4.58%
          NJ       $   427,500.00      $   424,031.66        1.27%
          NM       $   625,000.00      $   612,990.17        1.83%
          NV       $   400,786.75      $   367,872.70        1.10%
          NY       $ 4,560,000.00      $ 4,208,937.01       12.56%
          OH       $ 1,920,000.00      $ 1,775,390.00        5.30%
          OR       $   445,000.00      $   409,609.12        1.22%
          PA       $ 1,300,000.00      $ 1,259,604.25        3.76%
          TX       $ 4,334,000.00      $ 3,957,232.56       11.81%
          VA       $ 1,320,000.00      $ 1,311,837.56        3.92%
          WV       $   780,000.00      $   774,103.44        2.31%

                   ----------------------------------
                   $36,286,688.00      $33,498,368.16      100.00%

                                     - 35 -

<PAGE>

The table below  identifies the borrowing  institutions and certain key terms of
the loans comprising our loan portfolio as of December 31, 2008.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                        Loan          Loan       Interest     Collateral Appraised
          Borrowing Church                             Amount         Term         Rate               Value          Funding Date
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>          <C>          <C>                    <C>
Praise Chapel International(1)                      $    115,000     5 years      10.00%           $   175,000         03/02/99
---------------------------------------------------------------------------------------------------------------------------------
Greater Hill Zion Baptist Church                    $    500,000    20 years       9.75%           $ 1,040,000         05/20/99
---------------------------------------------------------------------------------------------------------------------------------
Freewill Christian Center                           $    596,000    20 years      10.00%           $   797,000         06/22/99
---------------------------------------------------------------------------------------------------------------------------------
Bethel Temple of Longview                           $    500,000    20 years      10.25%           $ 1,550,000         06/04/99
---------------------------------------------------------------------------------------------------------------------------------
Greater Fort Lauderdale                             $    605,000    20 years       9.75%           $   900,000         07/08/99
---------------------------------------------------------------------------------------------------------------------------------
Old Morning Star Church (1)                         $    280,000    20 years       9.85%           $   356,000         12/21/99
---------------------------------------------------------------------------------------------------------------------------------
Praise Christian Center                             $    500,000    20 years       9.85%           $   926,000         01/21/00
---------------------------------------------------------------------------------------------------------------------------------
St. Paul AME Church                                 $    200,000    20 years      10.25%           $   325,000         11/02/00
---------------------------------------------------------------------------------------------------------------------------------
Second Missionary Baptist Church                    $    225,000    20 years      10.25%           $   370,000         06/19/01
---------------------------------------------------------------------------------------------------------------------------------
True Vine Gospel Church                             $    350,000    25 years       9.95%           $   500,000         11/15/01
---------------------------------------------------------------------------------------------------------------------------------
Nehemiah Christian Center                           $    115,000     3 years       8.50%           $   140,000         05/30/02
---------------------------------------------------------------------------------------------------------------------------------
Eagle Vision Community Church                       $    165,000    20 years       9.25%           $   215,000         07/19/02
---------------------------------------------------------------------------------------------------------------------------------
Holly Grove Missionary Baptist Church               $    205,000    20 years       9.25%           $   461,900         09/19/02
---------------------------------------------------------------------------------------------------------------------------------
House of Joy & Praise Outreach Center               $    435,000    20 years       9.25%           $   780,000         12/30/02
---------------------------------------------------------------------------------------------------------------------------------
Bread of Life Baptist Church                        $    763,000    20 years       9.25%           $ 1,160,000         02/21/03
---------------------------------------------------------------------------------------------------------------------------------
Life Changing Faith Christian Church                $    460,000    20 years       9.00%           $   690,000         03/12/03
---------------------------------------------------------------------------------------------------------------------------------
Zion Hill Baptist Church                            $    255,000    20 years       8.65%           $   365,000          5/30/03
---------------------------------------------------------------------------------------------------------------------------------
Bend Christian Center                               $    445,000    25 years       8.65%           $  1,010,00          6/19/03
---------------------------------------------------------------------------------------------------------------------------------
Pembroke Park Church of Christ                      $    520,000    20 years       8.65%           $   880,000          6/26/03
---------------------------------------------------------------------------------------------------------------------------------
Glad Tidings Community Church                       $    663,000    25 years       8.75%           $   900,000          6/30/03
---------------------------------------------------------------------------------------------------------------------------------
The Apostolic Church of New York                    $    335,000    20 years       9.25%           $   537,000          8/18/03
---------------------------------------------------------------------------------------------------------------------------------
All Faiths Christian Center                         $    645,000    20 years       8.65%           $   922,000          9/11/03
---------------------------------------------------------------------------------------------------------------------------------
Landmark Apostolic Church                           $    400,000    20 years       8.65%           $   750,000          9/19/03
---------------------------------------------------------------------------------------------------------------------------------
Ekklesia Fellowship Ministries                      $    227,500    20 years       8.65%           $   335,000          9/25/03
---------------------------------------------------------------------------------------------------------------------------------
All Saints Community Church                         $    210,000    20 years       8.65%           $   300,000         11/25/03
---------------------------------------------------------------------------------------------------------------------------------
Praise Tabernacle Jamaica                           $    600,000    20 years       8.65%           $   950,143         11/25/03
---------------------------------------------------------------------------------------------------------------------------------
Praise Tabernacle Deliverance Baptist Church        $    500,000    25 years       8.35%           $ 1,058,000         12/19/03
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 36 -

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                        Loan          Loan       Interest     Collateral Appraised
          Borrowing Church                             Amount         Term         Rate               Value          Funding Date
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>          <C>          <C>                    <C>
Faith Christian Center                              $    475,000    20 years       8.65%           $   746,000         04/21/04
---------------------------------------------------------------------------------------------------------------------------------
Shiloh Temple House of God                          $    500,000    20 years       8.25%           $   710,000         04/29/04
---------------------------------------------------------------------------------------------------------------------------------
Fun Family Christian Center                         $    873,406    25 years       9.25%           $ 1,290,850         05/22/04
---------------------------------------------------------------------------------------------------------------------------------
The Lord Jesus Christ Church on the Rock            $    195,000    20 years       8.25%           $   300,000         07/09/04
---------------------------------------------------------------------------------------------------------------------------------
New Covenant Christian Fellowship                   $    375,000    20 years       8.25%           $   700,000         08/30/04
---------------------------------------------------------------------------------------------------------------------------------
Holy Deliverance Ministries                         $    238,830    20 years       9.85%           $   360,000         09/14/04
---------------------------------------------------------------------------------------------------------------------------------
Holy Tabernacle Ministries                          $    325,000    25 years       8.50%           $   500,000         09/16/04
---------------------------------------------------------------------------------------------------------------------------------
First Church of the Spirit and Truth                $    530,000    20 years       8.25%           $   750,000         09/30/04
---------------------------------------------------------------------------------------------------------------------------------
Bethany Uniting Faith                               $    235,000    20 years       8.25%           $   330,000         10/11/04
---------------------------------------------------------------------------------------------------------------------------------
Christ Wonderful World Outreach                     $    543,000    20 years       8.25%           $   725,000         11/03/04
---------------------------------------------------------------------------------------------------------------------------------
Covenant Love Christian Center                      $    785,000    20 years       8.25%           $ 1,200,000         11/10/04
---------------------------------------------------------------------------------------------------------------------------------
Faith Christian Ministry                            $    150,000    20 years       8.25%           $   220,000         11/15/04
---------------------------------------------------------------------------------------------------------------------------------
New Life Community Church of Truth                  $    570,000    20 years       8.25%           $   790,000         11/30/04
---------------------------------------------------------------------------------------------------------------------------------
Lincoln Heights Missionary Baptist Church           $    620,000    20 years       8.25%           $ 1,000,000         12/30/04
---------------------------------------------------------------------------------------------------------------------------------
Zion Mission                                        $    410,000    25 years       8.50%           $   800,000         02/04/05
---------------------------------------------------------------------------------------------------------------------------------
Inter-Denominational Fellowship Ministries          $    315,000    25 years       8.75%           $   491,000         04/06/05
---------------------------------------------------------------------------------------------------------------------------------
Mt. Ararat Baptist Church (2)                       $    215,000    25 years       8.95%           $ 1,000,000         04/24/05
---------------------------------------------------------------------------------------------------------------------------------
True Vine Baptist Church                            $    198,500    25 years       8.75%           $   265,000         06/01/05
---------------------------------------------------------------------------------------------------------------------------------
Calvary Baptist Church of Houston                   $    250,000    25 years       8.95%           $   350,000         06/29/05
---------------------------------------------------------------------------------------------------------------------------------
International Deliverance Center (3)                $    518,000    25 years       8.95%           $   738,000         06/30/05
---------------------------------------------------------------------------------------------------------------------------------
Unity of Faith Worship Center                       $    424,915    30 years       8.75%           $   835,150         06/30/05
---------------------------------------------------------------------------------------------------------------------------------
Iglesia de Dios Pentecostal                         $    775,000    25 years       8.75%           $ 1,008,484         07/13/05
---------------------------------------------------------------------------------------------------------------------------------
Defenders Faith Center                              $    260,000    25 years       8.95%           $   470,000         11/29/05
---------------------------------------------------------------------------------------------------------------------------------
Abundant Faith Baptist Church                       $    206,000    25 years       8.75%           $   500,000         02/15/06
---------------------------------------------------------------------------------------------------------------------------------
Grace Christian Church                              $  1,600,000    25 years       8.50%           $ 2,225,000         03/30/06
---------------------------------------------------------------------------------------------------------------------------------
Living Water Seventh-Day Adventist Church           $    640,000    30 years       8.75%           $   855,000         05/23/06
---------------------------------------------------------------------------------------------------------------------------------
Serenity Church                                     $    250,000    30 years       8.95%           $   370,909         06/13/06
---------------------------------------------------------------------------------------------------------------------------------
Evangel Temple                                      $  1,195,000    30 years       8.50%           $ 2,485,000         06/16/06
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 37 -

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                        Loan          Loan       Interest     Collateral Appraised
          Borrowing Church                             Amount         Term         Rate               Value          Funding Date
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>          <C>          <C>                    <C>
Calvary United Methodist Church of Holly            $    395,000    30 years       8.95%           $ 1,600,000         06/23/06
---------------------------------------------------------------------------------------------------------------------------------
Trinity Family Church                               $    625,000    30 years       8.75%           $ 1,007,000         06/23/06
---------------------------------------------------------------------------------------------------------------------------------
Iglesia Nueva Vida en Cristo                        $    195,000    30 years       8.75%           $   233,000         06/28/06
---------------------------------------------------------------------------------------------------------------------------------
Grace Evangelical Free Church                       $ 400,786.75    25 years       8.95%           $   900,000         08/11/06
---------------------------------------------------------------------------------------------------------------------------------
Norman Quintero Ministries                          $    275,000    25 years       9.00%           $   383,000         08/15/06
---------------------------------------------------------------------------------------------------------------------------------
Centro Cristiano Carismatico                        $  1,325,000    25 years       8.75%           $ 2,640,000         09/29/06
---------------------------------------------------------------------------------------------------------------------------------
Church of God of Prophecy of the Last Days          $    497,000    30 years       8.95%           $   710,000         12/07/06
---------------------------------------------------------------------------------------------------------------------------------
Sword of the Word Evangelistic Ministry             $    800,000    25 years       8.75%           $ 1,650,000         12/20/06
---------------------------------------------------------------------------------------------------------------------------------
Church of the Living God - Full Gospel Ministries   $  1,055,000    30 years       8.75%           $ 1,875,000         12/21/06
---------------------------------------------------------------------------------------------------------------------------------
Anchored in Faith Ministries                        $    675,000    25 years       9.25%           $   900,000         09/19/07
---------------------------------------------------------------------------------------------------------------------------------
New Maranatha-Karibu SDA Church                     $    427,500    30 years       8.95%           $   570,000         10/18/07
---------------------------------------------------------------------------------------------------------------------------------
Greater St. Andrew's AME Church                     $    440,000    30 years       8.95%           $ 1,250,000         11/01/07
---------------------------------------------------------------------------------------------------------------------------------
Burning Bush Worship Center                         $    450,000    30 years       8.95%           $   600,000         12/03/07
---------------------------------------------------------------------------------------------------------------------------------
Rock Spring Church                                  $    780,000    30 years       8.50%           $ 1,425,000         12/12/07
---------------------------------------------------------------------------------------------------------------------------------
Hope for You Family Life & Worship Center           $    450,000     3 years       7.50%           $   637,000         12/17/07
---------------------------------------------------------------------------------------------------------------------------------
Believers New Life Ministries                       $    266,000    25 years       8.25%           $   395,000         07/02/08
---------------------------------------------------------------------------------------------------------------------------------
Guiding Light Apostolic Church of Christ            $    430,000    25 years       8.25%           $ 1,250,000         08/20/08
---------------------------------------------------------------------------------------------------------------------------------
Victory Church of Troy, Inc.                        $  1,100,000    25 years       7.50%           $ 1,500,000         09/05/08
---------------------------------------------------------------------------------------------------------------------------------
Iglesia Pentecostes Alfa y Omega                    $    236,250    25 years       8.75%           $   317,000         09/25/08
---------------------------------------------------------------------------------------------------------------------------------
Norman Quintero Ministries                          $    645,000     5 years       5.00%           $ 1,500,000         09/30/08
---------------------------------------------------------------------------------------------------------------------------------
New Stranger's Home Baptist Church                  $    350,000    30 years       8.50%           $ 3,000,000         12/22/08
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Includes  an initial  loan in the  amount of  $250,000  and an  additional
      supplemental loan of $30,000 funded April 2001.

(2)    New promissory note signed.

(3)   New promissory note signed.

                                     - 38 -

<PAGE>

The  following  church bonds,  which are secured by mortgages,  were held by the
Company as of December 31,  2008.  Each of these bonds is callable at anytime by
the issuer at par.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                 Company                                                  Original
                                                   Principal     Purchase   Face Yield  Yield to  Current     Maturity      Issue
Issuer                                               Amount       Price      of Bonds   Maturity   Yield        Date        Date
----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>         <C>       <C>      <C>            <C>
From the Heart Ministries, Inc.                   $    13,000  $    13,000    10.40%     10.40%    10.40%  From 02/15/19  02/15/01
                                                                                                            to 08/15/19
----------------------------------------------------------------------------------------------------------------------------------
Abundant Life Family Worship                      $     3,000  $     2,760    10.15%     11.65%    11.03%     02/15/10    10/15/95
----------------------------------------------------------------------------------------------------------------------------------
From the Heart                                    $     3,000  $     3,000    10.40%     10.40%    10.40%     02/15/19    02/15/01
----------------------------------------------------------------------------------------------------------------------------------
From the Heart                                    $     1,000  $     1,000    10.15%     10.15%    10.15%     02/15/11    02/15/01
----------------------------------------------------------------------------------------------------------------------------------
Greater Holy Trinity                              $   766,000  $   766,000  From 8.25%     N/A      9.30%   Serially to   12/15/01
                                                                             to 9.75%                         12/15/21
----------------------------------------------------------------------------------------------------------------------------------
Swope Parkway Church of Christ                    $     8,000  $     7,440     9.95%     11.20%    10.70%     11/01/11    11/01/97
----------------------------------------------------------------------------------------------------------------------------------
Harvest Baptist Church                            $    10,000  $  5,073.95  From 5.00%     N/A       N/A      04/01/19    04/28/03
                                                                             to 12.00%
----------------------------------------------------------------------------------------------------------------------------------
Harvest Baptist Church                            $     6,000  $  3,031.14  From 5.00%     N/A       N/A      04/01/19    04/28/03
                                                                             to 12.00%
----------------------------------------------------------------------------------------------------------------------------------
Greater St. Matthew's Baptist                     $   372,000  $   372,000     9.00%      9.00%     9.00%  From 01/15/23  07/15/03
                                                                                                            to 07/15/23
----------------------------------------------------------------------------------------------------------------------------------
St. Agnes Missionary Baptist Church               $ 2,000,000  $ 2,000,000  From 5.35%     N/A      6.71%  From 05/15/10  05/15/03
                                                                             to 7.25%                       to 05/15/22
----------------------------------------------------------------------------------------------------------------------------------
Morning Star Missionary Baptist Church            $    10,000  $     7,500     9.80%     14.40%    13.07%     09/15/14    09/15/94
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $ 1,965,000  $ 1,965,000  From 7.25%     N/A      7.70%  From 03/01/18  03/01/04
                                                                              to 8.00%                      to 03/01/29
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $   472,000  $   472,000     7.75%      7.75%     7.75%  From 03/01/23  03/01/04
                                                                                                            to 09/01/23
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $    59,000  $    59,000     8.00%      8.00%     8.00%  From 03/01/24  03/01/04
                                                                                                            to 03/01/29
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $    17,000  $    17,000     8.00%      8.00%     8.00%     03/01/24    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $     1,000  $     1,000     8.00%      8.00%     8.00%     03/01/28    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $     1,000  $     1,000     8.00%      8.00%     8.00%     09/01/27    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $     1,000  $     1,000     8.00%      8.00%     8.00%     03/01/25    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $    10,000  $    10,000     8.00%      8.00%     8.00%     03/01/27    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 39 -

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                 Company                                                  Original
                                                   Principal     Purchase   Face Yield  Yield to  Current     Maturity      Issue
Issuer                                               Amount       Price      of Bonds   Maturity   Yield        Date        Date
----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>         <C>       <C>      <C>            <C>
Chapel Hill Harvester Church                      $     8,000  $     8,000     8.00%      8.00%     8.00%     03/01/28    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
Full Gospel Holy Temple                           $    25,000  $    23,500     7.25%      7.98%     7.71%     02/15/18    02/15/03
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $   796,000  $   796,000  From 5.75%     N/A      6.09%  From 09/01/11  03/01/04
                                                                             to 7.50%                       to 03/01/21
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $    30,000  $    28,200     7.75%      8.41%     8.24%     03/01/22    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
St. Agnes Missionary Baptist Church               $    30,000  $    27,300     7.00%      8.18%     7.69%     11/15/16    05/15/03
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $   400,000  $   400,000     9.00%      9.00%     9.00%  From 06/15/29  12/15/04
                                                                                                            to 12/15/29
----------------------------------------------------------------------------------------------------------------------------------
Original Holy Ark Missionary Baptist Church       $     2,000  $     2,000    10.00%     10.00%    10.00%     10/15/13    04/15/97
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $    97,000  $    97,000     9.00%      9.00%     9.00%  From 12/15/28  12/15/04
                                                                                                            to 06/15/29
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $   248,000  $   248,000     7.75%      7.75%     7.75%  From 12/15/20  12/15/04
                                                                                                            to 06/15/21
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $   150,000  $   150,000     7.50%      7.50%     7.50%  From 12/15/18  12/15/04
                                                                                                            to 06/15/19
----------------------------------------------------------------------------------------------------------------------------------
United Apostolic Church                           $     1,000  $     1,000     6.00%      6.00%     6.00%     05/15/14    05/15/05
----------------------------------------------------------------------------------------------------------------------------------
United Apostolic Church                           $     3,000  $     3,000     6.50%      6.50%     6.50%     05/15/16    05/15/05
----------------------------------------------------------------------------------------------------------------------------------
United Apostolic Church                           $     5,000  $     5,000     6.75%      6.75%     6.75%     05/15/17    05/15/05
----------------------------------------------------------------------------------------------------------------------------------
United Apostolic Church                           $    13,000  $    13,000     7.00%      7.00%     7.00%  From 11/15/17  05/15/05
                                                                                                            to 11/15/19
----------------------------------------------------------------------------------------------------------------------------------
United Apostolic Church                           $    12,000  $    12,000     7.25%      7.25%     7.25%     11/15/21    05/15/05
----------------------------------------------------------------------------------------------------------------------------------
United Apostolic Church                           $     4,000  $     4,000     7.50%      7.50%     7.50%     05/15/23    05/15/05
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $    24,000  $    24,000     6.25%      6.25%     6.25%     06/15/12    12/15/04
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $    76,000  $    76,000     6.50%      6.50%     6.50%  From 06/15/13  12/15/04
                                                                                                            to 12/15/13
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $   119,000  $   119,000     6.75%      6.75%     6.75%  From 06/15/14  12/15/04
                                                                                                            to 12/15/14
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 40 -

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                 Company                                                  Original
                                                   Principal     Purchase   Face Yield  Yield to  Current     Maturity      Issue
Issuer                                               Amount       Price      of Bonds   Maturity   Yield        Date        Date
----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>         <C>       <C>      <C>            <C>
Agape Assembly Baptist Church                     $     5,000  $     5,000     7.25%      7.25%     7.25%     12/15/16    12/15/04
----------------------------------------------------------------------------------------------------------------------------------
Christ Bible Teaching Center                      $    36,000  $    36,000  From 5.00%     N/A      6.14%  From 01/15/10  07/15/05
                                                                             to 6.75%                       to 01/15/17
----------------------------------------------------------------------------------------------------------------------------------
Brea Baptist Church                               $   543,000  $   543,000  From 4.50%     N/A      5.98%  From 04/01/09  10/01/05
                                                                             to 6.75%                       to 04/01/19
----------------------------------------------------------------------------------------------------------------------------------
Grace Community Church                            $   214,000  $   214,000     8.00%      8.00%     8.00%  From 08/15/30  02/15/06
                                                                                                            to 08/15/32
----------------------------------------------------------------------------------------------------------------------------------
Christ Fellowship Baptist Church                  $    25,000  $    25,000     7.50%      7.50%     7.50%     12/01/21    06/01/06
----------------------------------------------------------------------------------------------------------------------------------
Christ Fellowship Baptist Church                  $    25,000  $    25,000     7.75%      7.75%     7.75%     12/01/23    06/01/06
----------------------------------------------------------------------------------------------------------------------------------
Greater New Macedonia Miss. Baptist Church        $     1,000  $     1,000    10.15%     10.15%    10.15%     01/15/11    07/15/00
----------------------------------------------------------------------------------------------------------------------------------
Greater New Macedonia Miss. Baptist Church        $     1,000  $     1,000    10.15%     10.15%    10.15%     07/15/11    07/15/00
----------------------------------------------------------------------------------------------------------------------------------
St. Agnes Missionary Baptist Church               $     5,000  $     4,850     8.00%      8.30%     8.25%     11/15/27    05/15/03
----------------------------------------------------------------------------------------------------------------------------------
Redeemed Christian Church of God                  $    60,000  $    60,000     9.00%      9.00%     9.00%     11/01/36    11/01/06
----------------------------------------------------------------------------------------------------------------------------------
Oak Grove Missionary Baptist Church               $   993,000  $   993,000     8.50%      8.50%     8.50%  From 02/01/33  08/01/06
                                                                                                            to 08/01/36
----------------------------------------------------------------------------------------------------------------------------------
Christ Fellowship Baptist Church                  $   157,000  $   157,000     8.00%      8.00%     8.00%  From 02/01/10  06/01/06
                                                                                                            to 06/01/14
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $    10,000  $     8,900     8.00%      9.27%     8.99%     09/01/24    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
Grace Community Church                            $     4,000  $     3,560     7.75%      8.87%     8.71%     12/15/29    12/15/04
----------------------------------------------------------------------------------------------------------------------------------
United Baptist Church                             $     3,000  $     2,670     5.25%      9.06%     5.90%     06/01/10    06/01/05
----------------------------------------------------------------------------------------------------------------------------------
United Baptist Church                             $     3,000  $     2,670     5.50%      8.53%     6.18%     06/01/11    06/01/05
----------------------------------------------------------------------------------------------------------------------------------
United Baptist Church                             $     1,000  $       890     5.75%      8.12%     6.46%     12/01/12    06/01/05
----------------------------------------------------------------------------------------------------------------------------------
First Love Fellowship                             $     5,000  $     4,450     7.75%      9.02%     8.71%     01/15/24    07/15/06
----------------------------------------------------------------------------------------------------------------------------------
His Tabernacle Family Church                      $   240,000  $   240,000  From 8.25%     N/A      8.74%  From 09/01/15  03/01/07
                                                                             to 9.00%                       to 03/01/22
----------------------------------------------------------------------------------------------------------------------------------
New Beginnings Cathedral of Worship               $   281,000  $   281,000     7.00%      7.00%     7.00%     09/15/36    09/15/06
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 41 -

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                 Company                                                  Original
                                                   Principal     Purchase   Face Yield  Yield to  Current     Maturity      Issue
Issuer                                               Amount       Price      of Bonds   Maturity   Yield        Date        Date
----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>         <C>       <C>      <C>            <C>
Redeemed Christian Church of God                  $   151,000  $   151,000     8.25%      8.25%     8.25%  From 05/01/34  11/01/06
                                                                                                            to 11/01/35
----------------------------------------------------------------------------------------------------------------------------------
Calvary Tabernacle                                $   277,000  $   277,000     8.90%      8.90%     8.90%  From 12/15/33  06/15/07
                                                                                                            to 06/15/34
----------------------------------------------------------------------------------------------------------------------------------
Abundant Life Family Worship Center               $     1,000  $       940    10.35%     11.49%    11.01%     08/15/15    08/15/96
----------------------------------------------------------------------------------------------------------------------------------
Abundant Life Family Worship Center               $    15,000  $    13,800    10.30%     12.00%    11.20%     08/15/14    08/15/96
----------------------------------------------------------------------------------------------------------------------------------
The House of Refuge Apostolic Church              $   113,000  $   113,000     8.75%      8.75%     8.75%  From 02/15/37  08/15/07
                                                                                                            to 08/15/37
----------------------------------------------------------------------------------------------------------------------------------
Full Gospel Holy Temple                           $     5,000  $     4,400     5.25%     12.88%     5.97%     08/15/09    02/15/03
----------------------------------------------------------------------------------------------------------------------------------
The New York Dong Yang Church                     $     2,000  $     1,760     6.00%      8.96%     6.82%     12/01/12    12/01/03
----------------------------------------------------------------------------------------------------------------------------------
Redeemed Christian Church of God                  $   211,000  $   211,000     9.00%      9.00%     9.00%  From 11/15/36  11/15/07
                                                                                                            to 11/15/37
----------------------------------------------------------------------------------------------------------------------------------
Morning Star Missionary Baptist Church            $     5,000  $     4,100     9.80%     14.23%    11.95%     03/15/14    09/15/94
----------------------------------------------------------------------------------------------------------------------------------
Morning Star Missionary Baptist Church            $     5,000  $     4,400     9.50%     22.04%    10.80%     03/15/09    09/15/94
----------------------------------------------------------------------------------------------------------------------------------
Abundant Life Family Worship Center               $     3,000  $     2,670    10.20%     15.56%    11.46%     08/15/10    08/15/96
----------------------------------------------------------------------------------------------------------------------------------
Bethlehem Missionary Church                       $     3,000  $     2,655     9.20%     11.07%    10.40%     08/15/18    09/14/99
----------------------------------------------------------------------------------------------------------------------------------
Copperas Cove Unity Missionary Baptist Church     $   113,000  $   113,000     8.50%      8.50%     8.50%  From 02/15/38  02/15/08
                                                                                                            to 02/15/39
----------------------------------------------------------------------------------------------------------------------------------
The Church of the Pentecost USA                   $   491,000  $   491,000  From 6.25%     N/A      8.19%  From 02/15/09  02/15/08
                                                                             to 8.75%                       to 02/15/38
----------------------------------------------------------------------------------------------------------------------------------
New Community Baptist Church of Pine Bluff, AR    $     5,000  $     5,000     8.25%      8.25%     8.25%     08/15/35    02/15/08
----------------------------------------------------------------------------------------------------------------------------------
Redeemed Christian Church of God                  $   100,000  $   100,000     9.00%      9.00%     9.00%     01/15/38    11/15/07
----------------------------------------------------------------------------------------------------------------------------------
Redeemed Christian Church of God                  $   105,000  $   105,000     9.00%      9.00%     9.00%     07/15/38    11/15/07
----------------------------------------------------------------------------------------------------------------------------------
Chapel Hill Harvester Church                      $    10,000  $     7,500     8.00%     11.41%    10.67%     09/01/24    03/01/04
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 42 -

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                 Company                                                  Original
                                                   Principal     Purchase   Face Yield  Yield to  Current     Maturity      Issue
Issuer                                               Amount       Price      of Bonds   Maturity   Yield        Date        Date
----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>         <C>       <C>         <C>         <C>
Agape Assembly Baptist Church                     $    10,000  $     7,500     8.00%     11.34%    10.67%     06/15/25    12/15/04
----------------------------------------------------------------------------------------------------------------------------------
Agape Assembly Baptist Church                     $     5,000  $     3,750     7.50%     10.98%    10.00%     12/15/22    12/15/04
----------------------------------------------------------------------------------------------------------------------------------
Greater New Birth Church                          $   100,000  $   100,000     9.00%      9.00%     9.00%     04/01/38    10/01/08
----------------------------------------------------------------------------------------------------------------------------------
Greater New Macedonia Missionary Baptist Church   $       500  $       420    10.45%     13.28%    12.44%     07/15/19    07/15/00
----------------------------------------------------------------------------------------------------------------------------------
Bethlehem Missionary Church                       $       500  $       420     9.15%     12.40%    10.89%     08/15/16    08/15/99
----------------------------------------------------------------------------------------------------------------------------------
Cullen Missionary Baptist Church                  $    85,000  $    85,000     8.50%      8.50%     8.50%     05/15/38-   11/15/08
                                                                                                              11/15/38
----------------------------------------------------------------------------------------------------------------------------------
The House of Refuge Apostolic Church              $   125,000  $   125,000     8.65%      8.65%     8.65%     06/15/38-   12/15/08
                                                                                                              12/15/38
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Mortgage Loan Processing and Underwriting

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

   o  applications   containing  key  information   concerning  the  prospective
      borrower

   o  project description

   o  financial statements of the prospective borrower

   o  organizational documents and history of the borrower

   o  preliminary title report or commitment for mortgagee title insurance

   o  a real estate appraisal in accordance with our Lending Guidelines

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

                                     - 43 -

<PAGE>

half is payable to us and  one-half is payable to our  advisor.  We may charge a
fee to recoup expenses we have incurred.  This fee would be calculated  based on
funds we have paid for  appraisal,  accounting  and title work.  These costs are
usually paid by borrowers from proceeds at closing. We may not recoup these fees
if a commitment fee is not charged.

Loan Commitments

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

Loan Portfolio Management

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

   o  closing and recording of mortgage documents

   o  collecting principal and interest payments

   o  enforcing loan terms and other borrower's requirements

   o  periodic review of each mortgage loan file

   o  determination of reserve classifications

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

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

Loan Funding and Borrowing

      Our mortgage loans and purchases of church bonds are funded with available
cash resources.  Historically,  we have obtained cash resources from the sale of
our common stock,  the repayment of our investments in loans and bonds, the sale
of  certificates  and from our line of credit.  We will use the  proceeds of the
sale of  certificates  to fund mortgage loans and purchase  church bonds. We may
borrow up to 300% of shareholders'  equity, unless greater amounts are permitted
under certain  circumstances.  We have a $4,500,000  secured line of credit with
Beacon Bank, Shorewood, Minnesota. We intend to use this loan facility to enable
us to close loans on schedule  while we may not otherwise have adequate funds on
hand.  The Beacon  Bank line of credit is secured by church  bonds  owned by us.
This line of credit is used  periodically to fund loans when we do not otherwise
have sufficient capital to do so.  Historically,  the line has been paid as soon
as  additional  capital  becomes  available  to us. We pay Beacon Bank a rate of
interest equal to the prime interest rate up to a prime rate of 6.00%,  and when
above  6.00%,  a rate equal to the prime rate less 1/2% but not less than 6.00%,
in addition to a nominal annual renewal fee.

Lending Guidelines

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

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

                                      - 44 -

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

   o  We may borrow up to 300% of shareholders'  equity,  unless greater amounts
      are permitted under certain circumstances.

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

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

Prohibited Investments and Activities

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

                                      - 45 -

<PAGE>

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

   o  Investing  in  commodities  or  commodity  futures  contracts  other  than
      "interest rate futures" contracts intended only for hedging purposes;

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

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

   o  Investing in equity securities;

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

   o  Issuing redeemable equity securities;

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

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

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

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

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

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

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

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

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

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

                                      - 46 -

<PAGE>

Policy Changes

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

Competition

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

Allowance for Mortgage Loans Receivable

      The Company  records loans  receivable at their  estimated net  realizable
value,  which is the unpaid  principal  balance less the  allowance for mortgage
loans.   The  Company's   loan  policy   provides  an  allowance  for  estimated
uncollectible  loans based on an  evaluation  of the current  status of the loan
portfolio.   This  policy  reserves  for  principal  amounts  outstanding  on  a
particular loan if cumulative interruptions occur in the normal payment schedule
of a loan. The Company  reserves for the outstanding  principal amount of a loan
in  the  Company's   portfolio  if  the  amount  is  in  doubt  of   collection.
Additionally,  no interest income is recognized on non-performing loans that are
in  the  foreclosure  process.  At  December  31,  2007,  the  Company  reserved
approximately  $72,000 for fourteen  mortgage loans, of which four were three or
more mortgage payments in arrears, and three were in the foreclosure process, of
which one has declared  bankruptcy.  At September 30, 2008, the Company reserved
approximately  $71,000 for eleven  mortgage  loans,  of which five  churches are
three or more mortgage  payments in arrears and one church is in the foreclosure
process.

The  total  value of  non-performing  loans,  which  are  loans  that are in the
foreclosure process or are no longer performing,  was approximately $238,000 and
$1,156,000 at September 30, 2008 and December 31, 2007, respectively,  which the
Company believes is adequately secured by the underlying capital.

Loan Loss Provision

      Of our  significant  accounting  policies,  described  in the notes to our
financial  statements  incorporated  by  reference  hereto,  we believe that the
estimation of fair value of our mortgage  loans  receivable,  bond portfolio and
real estate held for sale  involve a high degree of  judgment.  We estimate  the
fair value of our mortgage loans  receivable  based on the average interest rate
for special  purpose  commercial  mortgage rates  extracted from the most recent
edition  of  www.RealtyRates.com.  The  carrying  value  of the  bond  portfolio
approximates  amortized  cost  since our bonds are  callable  at any time by the
issuer at par and the bond  portfolio  yield is currently  higher than  interest
rates on similar instruments. We do consider the interest rate or the yield rate
of a loan or bond in estimating fair value. We do not consider the  availability
of a market for a loan in estimating  fair value.  The value of real estate held
for sale is based on management's  estimate,  real estate appraisals and similar
property market comparisons.

      Our loan loss policy  results in  reserves  based on a  percentage  of the
principal amount outstanding on a loan if cumulative  interruptions occur in the
normal  payment  schedule  of a loan.  The amount  reserved  under our loan loss
policy on  delinquent  loans ranges from 1% to 5% of the  outstanding  principal
amount of the loan,  depending  on the number of payments  that are  delinquent.
Management  reviews the amount  reserved  on payments  that are in arrears on an
ongoing  basis and may increase the amount  reserved to  adequately  reflect the
amount that is believed to be collectible.

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

      As of  September  30,  2008,  we have  five  properties  acquired  through
foreclosure. Each property is valued based on its current listing price less any
anticipated selling costs, including, for example, realtor commissions. The fair
value of our real  estate  held for  re-sale  is  approximately  $1,165,000  and
$1,567,000 as of September 30, 2008 and December 31, 2007, respectively.

                                      - 47 -

<PAGE>

      Once a  property  is  acquired  by us,  comparable  sales  information  is
obtained and a local realtor is engaged to determine  demand for our properties.
The  general  competitive  conditions  surrounding  the  potential  sale  of our
properties  are tied,  in large  part,  to the fact  that  they are  special-use
properties with variable zoning  restrictions.  We principally lend to churches,
which are  commonly  exempt from zoning  restrictions.  However,  while a church
property  may  be  exempt  from  zoning  restrictions,  if  it is  located  in a
residential  area, it still may only be used as a church,  thereby  limiting the
pool of potential  buyers. On the other hand, a church or other property that is
zoned for  commercial  use generally  experiences  higher  demand,  as potential
buyers  can  convert  the  property  to their own  business  use.  As such,  our
properties  that are located in  residential  areas  typically  experience  less
demand than those zoned for commercial use.  Descriptions of the five properties
we have acquired through foreclosure are listed below.

      Foreclosure  was completed on a church located in Battle Creek,  Michigan.
The  church  congregation   disbanded  and  the  church  property  is  currently
unoccupied.  The  Company  owns and has taken  possession  of the church and has
listed  the  property  for sale  through a local  realtor.  The  property  has a
commercial  store-front  building  and a single  church  building  located  in a
residential area.

      Foreclosure  was also completed on a church located in Tyler,  Texas.  The
church  congregation  is now  meeting  in a  different  location  and the church
property is currently  unoccupied.  The Company owns and has taken possession of
the church and has listed the property for sale  through a local  realtor.  This
property is located in a residential area.

      Foreclosure was completed on a church located in Dayton,  Ohio. The church
congregation  is now meeting in a different  location and the church property is
currently  unoccupied.  The Company took possession of the church and listed the
property  for sale  through a local  realtor.  This  property  is  located  in a
residential area.

      Foreclosure  was also completed on a church located in Anderson,  Indiana.
The  Company  took  possession  of the  property in May 2008,  and is  currently
preparing  the  property  to be listed for sale.  This  property is located in a
residential area.

      Foreclosure  was completed on a church  located in Lancaster,  Texas.  The
Company took possession of the property in July 2008 and has listed the property
for sale. In order to obtain a certificate of occupancy,  a new parking lot must
be  completed,  as the  previous  owner began to replace the parking lot without
city  approval.  The  Company  will most likely need to reduced the price of the
property  by the cost of the new  parking  lot.  This  property  is located in a
residential area.

      Our  properties  located in Battle Creek,  Michigan and Anderson,  Indiana
have had roof  repair  work  done due to  neglected  maintenance.  The  property
located in Dayton,  Ohio had the roof  replaced  due to storm  damage  which was
partially  paid by  insurance.  All three  properties  have  current  electrical
service  and both  Dayton,  Ohio and  Anderson,  Indiana  have  monitored  alarm
systems.  All five  properties  have had all water turned off by the  respective
municipalities  and the three  properties in Battle  Creek,  Dayton and Anderson
have had their heating  systems  winterized.  All  properties are secure and are
listed through a local real estate agent and have adequate property insurance in
place.

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

<TABLE>
<CAPTION>
====================================================================================
Location of Property Obtained   Principal Balance
     Through Foreclosure              Owed          Reserve Amount   Carrying Value
====================================================================================
<S>                             <C>                 <C>              <C>
    Battle Creek, Michigan         $   216,351.70   $   136,251.70   $    80,100.00

         Tyler, Texas              $   333,294.89   $    46,634.89   $   284,660.00

         Dayton, Ohio              $   418,577.90   $   225,393.47   $   193,184.43

       Anderson, Indiana           $   385,418.41   $    17,418.00   $   368,000.41

       Lancaster, Texas            $   383,323.41   $   145,043.41   $   238,280.00
                                   --------------   --------------   --------------

            Totals:                $ 1,736,966.31   $   572,741.47   $ 1,164,224.84

====================================================================================
</TABLE>

                                      - 48 -

<PAGE>

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

Employees

      We  have  no  employees.  Subject  to  the  supervision  of our  board  of
directors,  our business is managed by our advisor,  which  provides  investment
advisory and administrative  services to us. Our advisor is controlled by Philip
J. Myers,  our president and one of our  directors.  Mr. Myers also controls the
underwriter; both our advisor and the underwriter are under common ownership. At
present,  certain  officers and directors of the underwriter and our advisor are
providing  services to us at no charge.  These services  include,  among others,
legal and analytic services relating to the implementation of our business plan,
preparation  of this  prospectus  (and  registration  statement  of  which  this
prospectus is a part) and development and drafting of documents  utilized by our
advisor in connection with our business operations.


      Our advisor  has two  executive  officers  but no  employees.  The advisor
indirectly  utilizes the services of three  individuals  who are employed by the
underwriter.  We do not expect to directly employ any persons in the foreseeable
future,  since all  administrative  functions and  operations are contracted for
through our  advisor.  Legal and  accounting  services  are  provided by outside
professionals. We pay for these services directly.


                                   MANAGEMENT

General

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

<TABLE>
<CAPTION>
        Name              Age                           Office                   Director Since
        ----              ---                           ------                   --------------
<S>                       <C>     <C>                                            <C>
Philip J. Myers            53     President, Treasurer, Secretary and Chairman         2001
Kirbyjon H. Caldwell       54     Independent Director                                 1994
Dennis J. Doyle            55     Independent Director                                 1994
Michael G. Holmquist       58     Independent Director                                 2003
</TABLE>

      Philip J. Myers has been our Chairman, President,  Treasurer and Secretary
since April 2001. He has also served as President, Treasurer,  shareholder and a
director of our  advisor,  Church Loan  Advisors,  Inc.  since 1994,  President,
Secretary,  and a director of the underwriter,  American  Investors Group,  Inc.
since 1996, and of its parent company,  Apostle  Holdings Corp.  since 2000. Mr.
Myers has been an officer of American Investors Group, Inc. and engaged directly
in church mortgage  lending since 1989. He earned his bachelor of arts degree in
political  science in 1977 from the State  University  of New York at Binghamton
and his juris  doctor  degree from the State  University  of New York at Buffalo
School of Law in 1980. From 1980 to 1982, Mr. Myers served as an attorney in the
Division of Market Regulation of the U.S.  Securities and Exchange Commission in
Washington,  D.C.  and,  from 1982 to 1984,  as an attorney with the Division of
Enforcement  of the Securities  and Exchange  Commission in San Francisco.  From
August  1984 to  January  1986,  he was  employed  as an  attorney  with the San
Francisco  law firm of  Wilson,  Ryan and  Compilongo  where he  specialized  in
corporate finance,  securities and broker-dealer  matters.  From January 1986 to
January 1989, Mr. Myers was engaged as Senior Vice-President and General Counsel
of  Financial  Planners  Equity  Corporation,  a 400  broker  securities  dealer
formerly located in Marin County, California. He became affiliated with American
Investors  Group,  Inc.  in 1989.  He is an  inactive  member  of the New  York,
California  and  Minnesota  State Bar  Associations.  Mr.  Myers  holds  General
Securities  Representative  and General  Securities  Principal licenses with the
National Association of Securities Dealers, Inc.

                                      - 49 -

<PAGE>

      Kirbyjon H. Caldwell, has served as an independent director of the Company
since 1994. He has been Senior Pastor of Windsor Village United Methodist Church
in Houston,  Texas since January  1982.  The  membership  of Windsor  Village is
approximately  14,400.  Mr. Caldwell  received his B.A. degree in Economics from
Carlton   College   (1975),   an  M.B.A.  in  Finance  from  the  University  of
Pennsylvania's  Wharton School (1977), and his Masters in Theology from Southern
Methodist  University School of Theology (1981). He is a member of the Boards of
Directors of Continental  Airlines,  National  Children's  Defense Fund,  Baylor
College of Medicine, Greater Houston Partnership,  Advisory Board of Amergy Bank
of Texas,  Reliant Energy,  Bridgeway Capital Management and the American Cancer
Society.  He is also the  founder  and member of several  foundations  and other
community development organizations.

      Dennis J. Doyle has served as an independent director of the Company since
1994. He is a shareholder and co-founder of Welsh Companies,  Inc., Minneapolis,
Minnesota,  a full-service real estate company involved in property  management,
brokerage,  investment  sales,  construction and commercial  development.  Welsh
Companies was co-founded by Mr. Doyle in 1978,  and has over 300 employees.  Mr.
Doyle is the recipient of numerous civic awards relating to his business skills.
He also is a member  of the  board of  directors  on a number  of  philanthropic
business boards.

      Michael G. Holmquist has served as an independent  director of the Company
since 2003. Mr. Holmquist is a Certified Public  Accountant  practicing from his
office in Deephaven,  Minnesota. Prior to entering the accounting field in 1977,
he worked for two years as a public school  teacher and served four years in the
U.S.  Coast Guard.  He is a graduate of St. Olaf College.  Mr.  Holmquist was an
original  incorporator of American  Investors Group, Inc. and an employee of the
firm from 1986-1989.

Day-to-Day Management of Operations

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

Duties of Directors

      Our directors are  responsible for considering and approving our policies.
Directors meet as often and devote such time to our business as their  oversight
duties may require.  Pursuant to our bylaws, the independent  directors have the
responsibility  of evaluating the capability and  performance of our advisor and
determining  that the  compensation we pay to our advisor is reasonable.  During
2007,  our directors  held four  meetings.  The  attendance  policy of the Board
encourages  and expects all board members to attend all Board  meetings.  During
2007, Mr. Myers and Mr. Holmquist  attended 100% and 75%,  respectively,  of the
meetings held. Mr. Caldwell and Mr. Doyle each attended two meetings, and Robert
O. Naegele, Jr. (who is not standing for re-election) attended one.

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

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

Executive Compensation

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

      In addition,  because the Company has no employees,  and because Mr. Myers
is not compensated by the Company,  there is no Company compensation  committee.
However, we currently pay each independent  director $500 for each board meeting
attended  ($400 for  telephonic  meetings),  limited to $2,500 per year. We also
reimburse directors for travel expenses

                                      - 50 -

<PAGE>

incurred in connection with their duties as our directors.  Please see "Director
Compensation".  As a  non-independent  director,  Philip J.  Myers  receives  no
compensation  or  reimbursements  in connection with his service on our Board of
Directors.

Director Independence

      The  Company's  Board of Directors has  determined  that each of Dennis J.
Doyle, Kirbyjon H. Caldwell, Robert O. Naegele, Jr. and Michael G. Holmquist are
"independent,"  as that term is  defined in NASAA  REIT  Guidelines  and in Rule
4200(a)(15) of the NASDAQ Marketplace Rules. Accordingly,  the Board is composed
of a majority  of  independent  directors.  There are no  transactions  with the
directors which were evaluated in connection with the Board's  determination  of
the  independence  or which have not already  been  disclosed  elsewhere in this
proxy statement.

Fiduciary Responsibility of Board of Directors and Indemnification

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

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

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

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

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

Warrants and Options

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

                                      - 51 -

<PAGE>

   EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS; DIRECTOR COMPENSATION

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

<TABLE>
<CAPTION>
                                                       Director Compensation(1)

                          Fees
                         Earned                        Non-Equity     Non-Qualified
                         or Paid   Stock    Option   Incentive Plan   Incentive Plan    All Other
Name                     in Cash   Awards   Awards    Compensation     Compensation    Compensation     Total
----                     -------   ------   ------   --------------   --------------   -------------   -------
<S>                      <C>       <C>      <C>      <C>              <C>              <C>             <C>
Kirbyjon H. Caldwell     $ 1,200     n/a      n/a         n/a              n/a               n/a       $ 1,200
Dennis J. Doyle          $ 1,200     n/a      n/a         n/a              n/a               n/a       $ 1,200
Michael G. Holmquist     $ 1,400     n/a      n/a         n/a              n/a          $ 15,199 (2)   $16,599
Philip J. Myers              n/a     n/a      n/a         n/a              n/a               n/a            --
Robert O. Naegele, Jr.   $ 1,000     n/a      n/a         n/a              n/a               n/a       $ 1,000
</TABLE>

(1)   All  Directors,  except  Philip J. Myers,  are paid $500 per board meeting
      attended ($400 for telephonic  meetings),  limited to $2,500 per year, and
      reimbursed for travel expenses incurred in connection with their duties as
      directors.

(2)   Mr. Holmquist was paid an additional  $15,199 during 2007 for auditing and
      testing the  Company's  internal  controls to determine if the Company has
      established  and is maintaining an adequate  system of controls as defined
      by Section 404 of the Sarbanes-Oxley Act of 2002.

                                      - 52 -

<PAGE>

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

      The  following  table sets forth as of February  27,  2009,  the number of
shares  beneficially  owned by each director and by all  executive  officers and
directors as a group,  and the beneficial owner of 5% or more of our outstanding
stock,  based on  2,472,801  shares of common  stock  outstanding  at that date.
Unless  otherwise  noted,  each of the  following  persons  has sole  voting and
investment  power with respect to the shares set forth opposite their respective
names.

<TABLE>
<CAPTION>
================================================================================================
                                                                          Number of
                                                                          Shares of
                                                                         Common Stock   Percent
                                                                         Beneficially     of
Name and address of Beneficial Owner (1)                                    Owned        Class
------------------------------------------------------------------------------------------------
<S>                                                                      <C>            <C>
Philip J. Myers                                                           26,514 (2)      1.1%
------------------------------------------------------------------------------------------------
Kirbyjon H. Caldwell                                                          --           --
------------------------------------------------------------------------------------------------
Dennis J. Doyle                                                               --           --
------------------------------------------------------------------------------------------------
Michael H. Holmquist                                                          --           --
------------------------------------------------------------------------------------------------
All Executive Officers and Directors as a Group (five individuals) (3)    27,814          1.1%
================================================================================================
</TABLE>

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

(2)   Number  does  not  include  36,813  shares  owned by an  affiliate  of our
      Advisor,  which affiliate is 20% indirectly  owned by Mr. Myers. Mr. Myers
      disclaims  beneficial  ownership of these shares  (representing 20% of the
      shares  owned by the  affiliate),  and does not have voting or  investment
      power over the shares.

(3)   Includes 1,300 shares owned by Scott J. Marquis. Mr. Marquis is an officer
      of our Advisor.

                                     - 53 -

<PAGE>

    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

      Our advisor,  Church Loan Advisors,  Inc., manages our business subject to
the supervision of our board of directors. Our advisor provides us with lending,
marketing,  management and  administrative  services.  Our President,  Philip J.
Myers, is the President of both our advisor and American  Investors Group, Inc.,
the  underwriter of this offering,  and thus is in a position of control of both
entities. In addition, Mr. Myers owns 20% of the underwriter. On our behalf, our
advisor regularly uses the services of personnel  employed by American Investors
Group,  Inc.,  including our  President,  Philip J. Myers,  Scott J. Marquis and
Kristen S. Hurley,  a loan officer.  We incur no direct cost for such  services,
except for the  advisory  fee we pay to our  advisor.  While our  advisor has no
employees, it does have two executive officers. See section "The Advisor and Our
Advisory Agreement" herein.

Transactions With Our Advisor

      We pay our advisor  advisory fees and expenses.  In addition,  our advisor
receives a portion of any origination  fees associated with a mortgage loan made
or renewed by us. The Company paid the advisor  management and origination  fees
of  approximately  $342,000 and $331,000 for the nine months ended September 30,
2008 and 2007,  respectively.  For the year ended December 31, 2007, we paid our
advisor  advisory  fees in the amount of $413,000 and our advisor  received loan
origination fee income of $37,000. In 2006, we paid our advisor advisory fees in
the amount of $386,000 and our advisor  received loan  origination fee income of
$187,000.  We  believe  that the  terms of the  advisory  agreement  are no less
favorable  to us had we entered into the  agreement  with an  independent  third
party as advisor.

Transactions with the Underwriter

      Effective as of _________  __, 2009,  we have entered into a  distribution
agreement  with the  underwriter.  Pursuant  to the  agreement,  we will pay the
underwriter a commission  based on the gross  principal  amount of  certificates
sold in this offering and an underwriter's management fee based on the principal
amount  and term of  certificates  sold in this  offering.  We will also pay the
underwriter a non-accountable expense reimbursement of up to $120,000,  assuming
all of the  certificates  are  sold.  The  underwriter  is an  affiliate  of our
advisor.  We believe that the terms of the  distribution  agreement  are no less
favorable to us than if we had entered into the  agreement  with an  independent
third party.  The  following  table sets forth the name and positions of certain
officers and all directors of the underwriter:

                    Name                 Position
                    ----                 --------

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

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

                                     - 54 -

<PAGE>

                     THE ADVISOR AND OUR ADVISORY AGREEMENT

Our Advisor: Church Loan Advisors, Inc.

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

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

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

      Scott J. Marquis,  age 51, is Vice-President and Secretary of our advisor,
having served in such  capacities  since  December  1994.  He is also  currently
employed  full-time as Chief Financial and Operating Officer of the underwriter,
American  Investors Group, Inc., where he has been employed since February 1987.
Prior to his employment  with American  Investors  Group,  Inc., Mr. Marquis was
employed for approximately seven years with the Minneapolis-based broker dealer,
Piper Jaffray Companies in various capacities within its operations  department.
Mr.  Marquis  attended the University of Minnesota,  Minneapolis,  Minnesota and
served in the United  States  Coast  Guard  Reserve.  Mr.  Marquis is a licensed
financial  principal and registered  representative of American Investors Group,
Inc.,  holds his Series 7, 63 and 27 licenses from the National  Association  of
Securities Dealers,  Inc. and holds a Minnesota  life/accident/health  insurance
license.

      See   "Management"  for  a  description  of  the  positions  and  business
experience of Philip J. Myers.

Our Advisory Agreement

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

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

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

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

   o  services all mortgage loans that we make

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

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

   o  supervises the  preparation,  filing and  distribution  of tax returns and
      reports to governmental  agencies,  prepares  reports to shareholders  and
      acts on our behalf in connection with shareholder relations

   o  reports to us on its performance of the foregoing services

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

                                     - 55 -

<PAGE>

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

      The Advisory  Agreement is renewable  annually by us for one-year periods,
subject to a determination,  including a majority of our independent  directors,
that our advisor's  performance has been  satisfactory and that the compensation
paid by us to our  Advisor  has been  reasonable.  The  Advisory  Agreement  was
reviewed and renewed for a one-year  period on April 24, 2008.  We may terminate
the Advisory Agreement without cause or penalty on 60 days' written notice. Upon
termination of the Advisory  Agreement by either party,  the advisor may require
us to  change  our name to a name  that does not  contain  the word  "American,"
"America"  or the  name of the  advisor  or any  approximation  or  abbreviation
thereof.  However,  we may  continue to use the word  "church" in our name.  Our
directors  must  determine  that  any  successor  advisor  possesses  sufficient
qualifications  to  perform  the  advisory  function  for  us  and  justify  the
compensation provided for in its contract with us.

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

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

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

      Pursuant  to the  Advisory  Agreement,  we pay our  advisor an annual base
management fee of 1.25% of average  invested  assets on the first $35 million of
such assets, 1.00% on assets from $35 million to $50 million, and .75% on assets
in excess of $50  million.  Although  entitled  to do so, the  advisor  does not
assess its  management  fee on the church  bond  portion of our  portfolio,  but
rather only on the church loan  portion of our  portfolio.  For  purposes of the
Advisory  Agreement,  the Company's  Invested  Assets means  outstanding  church
loans,  and  does  not  include  church  bonds  or  cash  equivalent   temporary
investments. As defined in the Advisory Agreement, we remit to the advisor up to
one-half of any  origination  fee collected  from a borrower in connection  with
mortgage  loans made or renewed by us. For the years ended December 31, 2007 and
2006, we paid our advisor $456,000 and $573,000, respectively.

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

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

                                     - 56 -

<PAGE>

    MATERIAL FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH THE CERTIFICATES

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

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

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

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

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

Tax Classification of the Certificates

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

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

                                     - 57 -

<PAGE>

Interest Income on the Certificates

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

Treatment of Dispositions of Certificates

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

Reporting and Backup Withholding

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

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

             QUALIFICATION AS A REIT FOR FEDERAL INCOME TAX PURPOSES

      The discussion of an entity's  qualification  as a real estate  investment
trust ("REIT") for federal income tax purposes set forth below is a summary.  It
does not address fully all requirements for REIT qualification.

      WHETHER THE COMPANY  QUALIFIES  AS A REIT FOR FEDERAL  INCOME TAX PURPOSES
WILL NOT AFFECT  WHETHER THE  CERTIFICATES  ARE  CLASSIFIED  AS DEBT FOR FEDERAL
INCOME TAX PURPOSES OR THE SUMMARY OF THE  ANTICIPATED  MATERIAL  FEDERAL INCOME
TAX CONSEQUENCES TO U.S. PERSONS WHO HOLD THE CERTIFICATES  THAT IS SET FORTH IN
THE  PRECEDING  DISCUSSION  TITLED  "MATERIAL  FEDERAL  INCOME TAX  CONSEQUENCES
ASSOCIATED WITH THE  CERTIFICATES." IF THE COMPANY WOULD NOT CONTINUE TO QUALIFY
AS A REIT FOR FEDERAL INCOME TAX PURPOSES,  IT, HOWEVER,  COULD AFFECT ADVERSELY
THE COMPANY'S ABILITY TO MAKE INTEREST PAYMENTS TO HOLDERS OF THE CERTIFICATES.

Qualification as a Real Estate Investment Trust

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

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

                                     - 58 -

<PAGE>

the entire taxable year. Condition (v) must be met during at least 335 days of a
taxable year of 12 months,  or during a proportionate  part of a taxable year of
less than 12 months.

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

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

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

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

                              ERISA CONSIDERATIONS

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

                                     - 59 -

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

General

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

Repurchase of Shares and Restrictions on Transfer

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

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

      Our  articles  of  incorporation  provide  that in the  event  any  person
acquires excess shares,  we may redeem such Excess Shares,  at the discretion of
the board of  directors.  Except as set forth below,  the  redemption  price for
excess shares is, the closing price as reported on the NASDAQ System on the last
business  day prior to the  redemption  date or, if the  shares are listed on an
exchange,  the closing  price on the last  business day prior to the  redemption
date or, if neither listed on an exchange nor quoted on the NASDAQ  System,  the
net asset value of the excess shares as determined in good faith by the board of
directors.  In no event,  however, may the purchase price of the shares redeemed
be greater than their net asset value as determined by the board of directors in
good faith.  To redeem excess shares,  the board of directors must give a notice
of redemption to the holder of such excess shares not less than 30 days prior to
the date fixed by the board of directors for  redemption.  The redemption  price
for  excess  shares  will be paid on the  redemption  date fixed by the board of
directors and included in such notice. Excess shares cease to be entitled to any
distribution  and other  benefits from and after the date fixed for  redemption,
except the right to payment of the redemption price for such shares.

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

Repurchase of Shares by Us

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

                                     - 60 -

<PAGE>

Transfer Agent and Registrar

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

                         DESCRIPTION OF THE CERTIFICATES

      General.  The Series C Certificates we are offering by this prospectus are
secured debt obligations of American Church Mortgage Company. We have issued two
prior  series  of  secured  investor  certificates:  Series A and  Series B. The
following chart summarizes the amount of certificates of each series  originally
authorized to be sold, the amount actually sold and the amount outstanding as of
September 30, 2008:

      -------------------------------------------------------------------
                   Authorized Amount    Amount Sold    Amount Outstanding
      -------------------------------------------------------------------
      Series A     $      15,000,000    $15,000,000    $        7,258,000
      -------------------------------------------------------------------
      Series B     $      23,000,000    $14,860,000    $       14,695,000
      -------------------------------------------------------------------
      Series C*    $      20,000,000             --                    --
      -------------------------------------------------------------------

      *     No amount of Series C Certificates may be sold until the
            Registration Statement is declared effective by the Securities and
            Exchange Commission.

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

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

      You may  determine  the amount (any  multiple of $1,000) and term (13, 14,
15, 16, 17, 18, 19 or 20 years) of the  certificates  you would like to purchase
when you subscribe,  subject to availability.  However,  we may not always offer
certificates  of each maturity,  depending on market  conditions and our capital
requirements. Each certificate will mature on the anniversary of the last day of
the fiscal quarter in which the  certificate is purchased.  We will set interest
rates based on current  market  conditions  and our need for  capital.  Interest
rates will not be derived from any reference or published interest rate.

      The interest rate will be fixed for the term of your  certificate and paid
quarterly.  As of the  date of this  prospectus,  rates  we  will  pay for  each
maturity of certificates  are set forth below. The interest rate will vary based
on the term to maturity of the certificate you purchase.

                    ----------------------------------------
                    Certificate Term         Interest Rate %
                    ----------------------------------------
                         13 Year                  6.25%
                    ----------------------------------------
                         14 Year                  6.25%
                    ----------------------------------------
                         15 Year                  6.35%
                    ----------------------------------------
                         16 Year                  6.50%
                    ----------------------------------------
                         17 Year                  6.65%
                    ----------------------------------------
                         18 Year                  6.75%
                    ----------------------------------------
                         19 Year                  7.00%
                    ----------------------------------------
                         20 Year                  7.25%
                    ----------------------------------------

                                     - 61 -

<PAGE>

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

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

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

      Term and Maturity.  We are offering  certificates  with terms ranging from
thirteen to twenty years as follows:

               o   thirteen (13) years

               o   fourteen (14) years

               o   fifteen (15) years

               o   sixteen (16) years

               o   seventeen (17) years

               o   eighteen (18) years

               o   nineteen (19) years

               o   twenty (20) years.

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

      The maturity  date will be the  anniversary  of the last day of the fiscal
quarter in which you purchase your certificate.  For example,  if you purchase a
thirteen (13) year certificate on November 10, 2008, the certificate will mature
on  December  31,  2021.  We  may  cease  offering  specified  maturities,   and
re-continue  their  offering,  at any time during the  offering  period.  We may
change  the  interest  rate  offered on any unsold  certificates  without  prior
notice.

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

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

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

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

                                     - 62 -

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

      Book-entry   notations  in  the  accounts  evidencing   ownership  of  the
certificates are exchangeable  for actual  certificates  only if: (i) we, at our
option,  advise  the  trustee  in  writing  of our  election  to  terminate  the
book-entry system, or (ii) after the occurrence of an event of default under the
indenture,  holders  of  the  certificates  aggregating  more  than  50%  of the
aggregate

                                     - 63 -

<PAGE>

outstanding  amount of the  certificates  advise the trustee in writing that the
continuation  of a book-entry  system is no longer in the best  interests of the
holders of certificates and the trustee  notifies all registered  holders of the
occurrence of any such event and the  availability  of definitive  certificates.
Subject to the exceptions  described  above,  the book-entry  interests in these
securities  will not be  exchangeable  for fully  registered  certificates.  The
trustee  will also  issue  fully  registered  certificates  if  required  by the
administrator  of an  Individual  Retirement  Account  or similar  tax  deferred
account in which a holder has acquired a  certificate.  The trustee may charge a
$10 fee per certificate issuance.

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

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

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

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

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

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

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

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

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

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

                                     - 64 -

<PAGE>

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

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

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

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

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

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

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

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

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

      o     we will maintain a positive net worth, which includes  shareholders'
            equity and subordinated debt; and

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

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

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

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

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

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

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

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

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

                                     - 65 -

<PAGE>

powers under the indenture,  in our name and,  except in the case of a lease, we
will be released from all our liabilities  and  obligations  under the indenture
and under the certificates.

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

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

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

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

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

      o     defaults in certain of our other financial obligations; and

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

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

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

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

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

      o     to cure any ambiguity, defect or inconsistency;

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

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

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

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

      o     to maintain our status as a REIT.

                                     - 66 -

<PAGE>

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

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

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

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

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

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

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

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

      Reports.  We have  published  and filed with the  Securities  and Exchange
Commission  annual  reports on Form  10-KSB,  and will  publish  and file annual
reports on Form 10-K,  containing financial  statements,  and have published and
filed  quarterly  reports on Forms  10-QSB and 10-Q,  and will  publish and file
quarterly reports on Forms 10-Q,  containing financial information for the first
three quarters of each fiscal year. See "Additional  Information."  We will send
copies of our reports at no charge to any  certificate  holder who requests them
in writing.

                     SUMMARY OF THE ORGANIZATIONAL DOCUMENTS

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

Certain Articles of Incorporation and Bylaws Provisions

      Shareholders'  rights and related  matters are  governed by the  Minnesota
Business Corporation Act, our Articles and our Bylaws. Certain provisions of our
Articles and Bylaws,  which are summarized  below, may make it more difficult to

                                     - 67 -

<PAGE>

change the composition of our board and may discourage an attempt by a person or
group to obtain control of us through acquisitions of shares.

Shareholder Meetings

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

Board of Directors

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

Limitations on Director Actions

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

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

Minnesota Anti-Takeover Law

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

Restrictions on Roll-Ups

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

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

                                     - 68 -

<PAGE>

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

      o     result in our  shareholders  having voting rights that are less than
            those provided in our Bylaws;

      o     result in our shareholders having greater liability than as provided
            in our Bylaws;

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

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

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

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

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

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

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

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

Limitation on Total Operating Expenses

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

Transactions with Affiliates

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

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

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

                                     - 69 -

<PAGE>

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

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

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

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

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

Restrictions on Investments

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

                              PLAN OF DISTRIBUTION

General

      The  underwriter  is offering the  certificates  pursuant to the terms and
conditions of a  distribution  agreement (a copy of which is filed as an exhibit
to  the  Registration  Statement  of  which  this  prospectus  is a  part).  The
underwriter is offering  $20,000,000  principal  amount of  certificates  on our
behalf on a "best efforts"  basis.  "Best efforts" means that the underwriter is
not obligated to purchase any certificates.  This is a "no minimum" offering. No
minimum  principal amount of certificates  must be sold, and we will receive the
proceeds from the sale of  certificates  as they are sold. This offering will be
conducted on a continuous  basis pursuant to applicable  rules of the Securities
and Exchange  Commission and will  terminate upon  completion of the sale of all
certificates. We may terminate this offering at any time.

Compensation


      We will pay to the underwriter a commission  based on the principal amount
of  certificates  sold. The amount of this  commission is 2.75% for sales of new
certificates  sold. We will also pay the  underwriter a .75% management fee upon
the original  issuance of each  certificate.  No commission  will be charged for
renewals.  Because  there is  sharing of  employees  with the  underwriter,  the
underwriting compensation described above does not include the salaries or other
amounts  that such shared  employees  will receive  from their  employer,  which
amounts would be paid to those employees  whether or not the offering  occurred.
This  compensation,  and all  compensation to be received by the underwriter and
related  persons,  will not  exceed  ten  percent  (10%) of the  total  offering
proceeds.  We will allocate  $5,000 of the $50,000 of the total  estimated legal
fees we expect to pay toward the activities of the underwriter.

      We have agreed to pay the underwriter a non-accountable  expense allowance
of up to $120,000 to reimburse the underwriter for certain expenses  incurred by
it in  connection  with the offer and sale of the  shares,  $10,000  of which is
payable upon the sale of each  $1,000,000 of  certificates  up to $10,000,000 of
certificates,  and $2,000 for each additional $1,000,000 of certificates offered
hereby up to the completion or termination  of this offering,  whichever  occurs
first.


      Other Compensation  Information.  We will not pay or award any commissions
or  other  compensation  to any  person  engaged  by a  potential  investor  for
investment  advice to induce  such  person to advise the  investor  to  purchase
certificates.  This

                                     - 70 -

<PAGE>

provision does not prohibit the normal sales commission  payable to a registered
broker-dealer or other properly licensed person for selling certificates.

Subscription Process

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

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

      Clients of soliciting dealers who wish to purchase certificates must remit
payment for the purchase of certificates  directly to the underwriter payable to
"American  Church  Mortgage  Company" and will receive a  confirmation  of their
purchase directly from the underwriter.

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

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

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

Determination of Investor Suitability

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

      By executing your account application, each soliciting dealer acknowledges
its determination  that the certificates are a suitable  investment for you, and
will be required to represent  and warrant its  compliance  with the  applicable
laws requiring the  determination  of the suitability of the  certificates as an
investment  for you.  In  addition  to the  foregoing,  we will  coordinate  the
processes and procedures utilized by the underwriter and soliciting dealers and,
where necessary, implement additional reviews and procedures deemed necessary to
determine  that  you  meet the  suitability  standards  set  forth  herein.  The
underwriter  and/or the  soliciting  dealers must  maintain for at least six (6)
years a  record  of the  information  obtained  to  determine  that you meet the
suitability  standards  imposed on the offer and sale of  certificates  and your
representation  that you are  investing for your own account or, in lieu of such
representation, information indicating that you met the suitability standards.

Suitability of the Investment

      Our  certificates  are suitable  only for  investment  by persons who have
adequate  financial  means and can commit their  investment for the full term of
the  certificates  purchased.  You will be required  to provide us with  certain
financial information in your account application. You may purchase up to $5,000
of  certificates  if you meet one of the  following  standards:  (i) a net

                                     - 71 -

<PAGE>

worth (excluding home, home furnishings and automobiles) of at least $45,000 and
a minimum gross income (without regard to investment in the  certificates) of at
least  $45,000;  or (ii) a net  worth  (excluding  home,  home  furnishings  and
automobiles)  of  at  least  $150,000.  To  purchase  in  excess  of  $5,000  of
certificates,  you must  meet one of the  following  standards:  (i) a net worth
(excluding  home, home  furnishings  and  automobiles) of at least $70,000 and a
minimum gross income  (without regard to investment in the  certificates)  of at
least  $70,000;  or (ii) a net  worth  (excluding  home,  home  furnishings  and
automobiles) of at least  $250,000.  In the case of gifts to minors or purchases
in  trusts,  the  suitability  standards  must  be met by the  custodian  or the
grantor.  By  acceptance  of the  confirmation  of  purchase  or delivery of the
certificates,  you will represent  satisfaction  of the  applicable  suitability
standards and acknowledge receipt of this prospectus.

      Suitability standards may be higher in certain states. Potential investors
who are residents of Idaho, Iowa, Kansas or Washington should read Exhibit B for
suitability  requirements  particular  to their state.  You must meet all of the
applicable  requirements set forth in the account application.  Kansas residents
will also be required to complete the Subscription Agreement that is part of the
account application.

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

      COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

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

                                  LEGAL MATTERS

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

                                     EXPERTS

      Our balance sheets as of December 31, 2007 and 2006 and related statements
of operations,  stockholder's equity and cash flows for the years ended December
31,  2007 and 2006  included  in this  prospectus  have been  audited by Boulay,
Heutmaker,   Zibell  and  Company,   P.L.L.P.,   independent  registered  public
accountants,  as set forth in the report thereon appearing elsewhere herein, and
are included  herein in reliance upon such report given on the authority of said
firm as experts in accounting and auditing.

                             ADDITIONAL INFORMATION

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

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

                                     - 72 -

<PAGE>

                          INDEX TO FINANCIAL STATEMENTS


Financial Statements
   Audited Financial Statements
   Report of Independent Registered Public Accounting Firm................   F-2
   Balance Sheets as of December 31, 2007 and 2006........................   F-3
   Statements of Operations for the fiscal years ended December 31, 2007
     (Restated) and 2006 (Restated).......................................   F-5
   Statements of Stockholders' Equity for the fiscal years ended
     December 31, 2007 and 2006...........................................   F-6
   Statements of Cash Flows for the fiscal years ended
     December 31, 2007 and 2006...........................................   F-7
   Notes to Financial Statements..........................................   F-9

   Unaudited Interim Financial Statements
   Condensed Balance Sheets as of September 30, 2008 and
     December 31, 2007....................................................  F-16
   Condensed Statements of Operations for the nine-month periods ended
     September 30, 2008 (Restated) and 2007(Restated) ....................  F-18
   Condensed Statements of Cash Flows for the nine-month periods ended
     September 30, 2008 and 2007..........................................  F-19
   Notes to Unaudited Condensed Financial Statements......................  F-21


                                      F-1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
American Church Mortgage Company
Minnetonka, Minnesota

We have audited the  accompanying  balance  sheets of American  Church  Mortgage
Company  as of  December  31,  2007  and  2006  and the  related  statements  of
operations,  stockholders'  equity,  and cash  flows for the years  then  ended.
American Church Mortgage Company's management is responsible for these financial
statements.  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 American  Church  Mortgage
Company as of December  31, 2007 and 2006,  and the results of their  operations
and their cash flows for the years then ended,  in  conformity  with  accounting
principles generally accepted in the United States of America.

                             /s/ Boulay, Heutmaker, Zibell & Co., P.L.L.P.
                             Certified Public Accountants

Minneapolis, Minnesota
March 28, 2008, except as to Note 9 which is as of March 4, 2009

                                      F-2

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                                  Balance Sheet

<TABLE>
<CAPTION>
                                                                      December 31,
                                                                  2007           2006
<S>                                                           <C>            <C>
                               ASSETS
Current Assets
   Cash and equivalents                                       $    285,118   $    232,258
   Accounts receivable                                             112,546        136,709
   Interest receivable                                             151,105        164,923
   Current maturities of mortgage loans receivable, net of
     allowance of $72,056 and $97,262
     at December 31, 2007 and 2006                                 907,812      3,073,619
   Current maturities of bond portfolio                             41,000         79,000
   Prepaid expenses                                                  7,072          8,372
                                                              ------------   ------------
      Total current assets                                       1,504,653      3,694,881

Mortgage Loans Receivable, net of current maturities            33,061,115     34,779,117

Real Estate Held for Sale, net of impairment reserve of
  $635,286 and $1,196,168 at December 31, 2007 and 2006          1,566,561      1,125,190

Deferred Secured Investor Certificates Offering Costs,
  net of accumulated amortization of $871,437 and
  $706,022 at December 31, 2007 and 2006                           700,479        852,720

Deferred Line of Credit Costs, net of accumulated
  amortization of $36,652 at December 31, 2007                     227,278             --

Bond Portfolio, net of current maturities and allowance
  of $100,000 at December 31, 2007                              11,222,713      9,471,697

Other                                                                   --         60,000
                                                              ------------   ------------

      Total assets                                            $ 48,282,799   $ 49,983,605
                                                              ============   ============
</TABLE>

      Notes to Financial Statements are an integral part of this Statement.

                                      F-3

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                                  Balance Sheet

<TABLE>
<CAPTION>
                                                                    December 31
--------------------------------------------------------------------------------------
              LIABILITIES AND STOCKHOLDERS' EQUITY            2007            2006
--------------------------------------------------------------------------------------
<S>                                                      <C>             <C>
Current Liabilities
   Current maturities of secured investor certificates   $   2,197,000   $   3,169,000
   Line of credit                                            3,350,000       1,166,000
   Accounts payable                                             28,941          21,796
   Accounts payable - related party                                 --           4,515
   Accrued expenses                                             18,022              --
   Building funds payable                                       50,000          27,000
   Current maturities of deferred income                        30,412          62,023
   Dividends payable                                           124,680         397,418
                                                         -------------   -------------
         Total current liabilities                           5,799,055       4,847,752

Deferred Income, net of current maturities                     596,164         611,891

Secured Investor Certificates, Series A                      6,008,000       8,807,000
Secured Investor Certificates, Series B                     14,626,000      14,662,000

Stockholders' Equity
   Common stock, par value $.01 per share
      Authorized, 30,000,000 shares
      Issued and outstanding, 2,493,595 at
      December 31, 2007 and 2006                                24,936          24,936
   Additional paid-in capital                               22,927,644      22,927,644
   Accumulated deficit                                      (1,699,000)     (1,897,618)
                                                         -------------   -------------
         Total stockholders' equity                         21,253,580      21,054,962
                                                         -------------   -------------

         Total liabilities and equity                    $  48,282,799   $  49,983,605
                                                         =============   =============
</TABLE>

      Notes to Financial Statements are an integral part of this Statement.

                                      F-4

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                             Statement of Operations


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                                    Years Ended December 31
                                                                       2007         2006
                                                                    (Restated)    (Restated)
--------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>
Interest Income                                                    $ 3,947,690   $ 3,927,765

   Interest Expense                                                  1,778,715     1,724,986
                                                                   -----------   -----------

Net Interest Income                                                  2,168,975     2,202,779

   Provision for losses on mortgage loans receivable                    33,101         8,682
   Provision for losses on bonds                                       100,000            --
                                                                   -----------   -----------
Total provision for losses on mortgage loans and bonds                 133,101         8,682
                                                                   -----------   -----------

Net Interest Income after provision for mortgage and bond losses     2,035,874     2,194,097

Operating Expenses
   Other operating expenses                                            965,322       834,764
   Real estate impairment loss                                         217,362       205,165
                                                                   -----------   -----------
      Total operating expenses                                       1,182,684     1,039,929

Income Taxes                                                                --            --
                                                                   -----------   -----------

Net Income                                                         $   853,190   $ 1,154,168
                                                                   ===========   ===========

Basic and Diluted Income Per Common Share                          $       .34   $       .46
                                                                   ===========   ===========

Weighted Average Common Shares Outstanding                           2,493,595     2,536,351
                                                                   ===========   ===========
</TABLE>


                                      F-5

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                        Statement of Stockholders' Equity

<TABLE>
<CAPTION>
                                                     Common Stock         Additional
                                              ------------------------     Paid-In      Accumulated
                                                 Shares       Amount       Capital        Deficit
---------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>          <C>            <C>
Balance, December 31, 2005                      2,551,568   $   25,516   $ 23,416,468   ($1,566,511)

   Redemption of 57,973 shares of common
     stock                                        (57,973)        (580)      (488,824)

   Net income                                                                             1,154,168

   Dividends declared                                                                    (1,485,275)
                                              -----------   ----------   ------------   -----------

Balance, December 31, 2006                      2,493,595   $   24,936   $ 22,927,644   ($1,897,618)

   Net income                                                                               853,190

   Dividends declared                                                                      (654,572)
                                              -----------------------------------------------------

Balance, December 31, 2007                      2,493,595   $   24,936   $ 22,927,644   ($1,699,000)
                                              =====================================================
</TABLE>

      Notes to Financial Statements are an integral part of this Statement.

                                      F-6

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                            Statements of Cash Flows

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                              Years ended December 31
                                                            --------------------------
                                                                2007          2006
                                                            -----------   ------------
<S>                                                         <C>           <C>
Cash Flows from Operating Activities
   Net income                                               $   853,190   $  1,154,168
   Adjustments to reconcile net income to net cash
      from operating activities:
      Impairment loss on real estate                            217,362        205,165
      Provision for losses on mortgage loans receivable          33,101          8,682
      Provision for losses on bond portfolio                    100,000             --
      Amortization of deferred costs                            202,067        199,373
      Other                                                      60,000             --
      Change in assets and liabilities
         Accounts receivable                                     24,163        (27,267)
         Interest receivable                                     13,818        (26,781)
         Prepaid expenses                                         1,300         (8,372)
         Accounts payable                                         2,630          6,971
         Accrued expenses                                        18,022             --
         Deferred income                                        (47,338)       117,312
                                                            -----------   ------------
         Net cash from operating activities                   1,478,315      1,629,251

Cash Flows from Investing Activities
   Investment in mortgage loans receivable                   (6,807,144)   (19,699,820)
   Collections of mortgage loans receivable                   9,891,776      9,944,751
   Investments in bond portfolio                             (2,533,620)      (306,850)
   Proceeds from bond portfolio called/sold                     720,604        658,020
                                                            -----------   ------------
         Net cash from (used for) investing activities        1,271,616     (9,403,899)

Cash Flows from Financing Activities
   Proceeds from sale of property                               130,343             --
   Payments on line of credit, net                               61,185      1,166,000
   Proceeds from secured investor certificates                       --      3,369,000
   Payments on secured investor certificate maturities       (1,851,000)    (1,770,000)
   Payments for deferred costs                                 (110,289)      (177,987)
   Stock redemptions                                                 --       (489,404)
   Dividends paid                                              (927,310)    (1,454,646)
                                                            -----------   ------------
         Net cash (used for) from financing activities       (2,697,071)       642,963
                                                            -----------   ------------

Net Increase (Decrease) in Cash and Equivalents                  52,860     (7,131,685)

Cash and Equivalents - Beginning of Year                        232,258      7,363,943
                                                            -----------   ------------

Cash and Equivalents - End of Year                          $   285,118   $    232,258
                                                            ===========   ============
</TABLE>

      Notes to Financial Statements are an integral part of this Statement.

                                      F-7

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                      Statements of Cash Flows - Continued

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 Years ended December 31
                                                                 -----------------------
                                                                    2007         2006
                                                                 ----------   ----------
<S>                                                              <C>          <C>
Supplemental Schedule of Noncash Financing and
   Investing Activities

      Dividends payable                                          $  124,680   $  397,418
                                                                 ==========   ==========

      Reclassification of mortgage and accounts receivable to
         real estate held for sale                               $  789,076   $  573,108
                                                                 ==========   ==========

      Mortgage loans closed but not paid                         $   50,000   $   27,000
                                                                 ==========   ==========

      Line of credit borrowings for deferred costs               $  166,815   $       --
                                                                 ==========   ==========

      Line of credit borrowings used for payment of
        secured investor certificates                            $1,956,000   $       --
                                                                 ==========   ==========

Supplemental Cash Flow Information

   Cash paid during the year for Interest                        $1,760,693   $1,724,986
                                                                 ==========   ==========
</TABLE>

      Notes to Financial Statements are an integral part of this Statement.

                                       F-8

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

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

Accounting Estimates

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

Cash and Equivalents

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

The Company maintains accounts primarily at two financial institutions. At times
throughout the year, the Company's cash and equivalents balances may exceed
amounts insured by the Federal Deposit Insurance Corporation. Cash in money
market funds is not Federally insured. At December 31, 2007 and 2006, such
investments were $5,000 and $15,403, respectively. The Company has not
experienced any losses in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The
Company classifies its bond portfolio as "available-for sale."
Available-for-sale bonds are carried at fair value. Although no ready public
market for these bonds exists, management believes that cost approximates fair
value, since the bonds are callable at any time by the issuer at par.

Allowance for Mortgage Loans Receivable

The Company records loans receivable at their estimated net realizable value.
The Company's loan policy provides an allowance for estimated uncollectible
loans based on an evaluation of the current status of the loan portfolio. This
policy reserves for principal amounts outstanding on a particular loan if
cumulative interruptions occur in the normal payment schedule of a loan. The
Company reserves for the outstanding principal amount of a loan in the Company's
portfolio if the amount is in doubt of collection. Additionally, no interest
income is recognized on impaired loans that are in the foreclosure process. At
December 31, 2007, the Company reserved $72,056 for fourteen mortgage loans, of
which four are three or more mortgage payments in arrears. Three of the loans
are in the foreclosure process, of which one has declared bankruptcy. At
December 31, 2006, the Company reserved $97,262 for twelve mortgage loans of
which one was four mortgage payments in arrears and was in the foreclosure
process.

The total impaired loans, which are loans that are in the foreclosure process or
are no longer performing, were approximately $1,156,000 and $1,164,000 at
December 31, 2007 and 2006, respectively.

Real Estate Held for Sale

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

                                       F-9

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

Foreclosure was also completed on a church located in Tyler, Texas. The church
congregation is now meeting in a different location and the church property is
currently unoccupied. The Company owns and has taken possession of the church
and has listed the property for sale through a local realtor.

A deed in lieu of foreclosure was received from a church located in Cleveland,
Ohio. The Company took possession of the church and listed the property for sale
through a local realtor. The sale of the property was completed on January 18,
2008. The property sold for approximately $215,000 and the Company received
approximately $182,000 from the sale of the property after closing costs and
realtor fees. The Company subsequently realized a tax deductible loss on the
property totaling approximately $221,000.

Foreclosure was completed on a church located in Dayton, Ohio. The church
congregation is now meeting in a different location and the church property is
currently unoccupied. The Company took possession of the church and listed the
property for sale through a local realtor.

Foreclosure was also completed on a church located in Dallas, Texas. The Company
took possession of the property. The Company received an earnest money deposit
from a buyer who is currently in the process of obtaining a certificate of
occupancy. When the certificate of occupancy is obtained, the sale of the
property will be completed.

The Company recorded the real estate held for sale at fair value, which is net
of the expected expenses related to the sale of the real estate.

Carrying Value of Long-lived Assets

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

Recoverability is assessed based on the carrying amount of the asset and fair
value which is generally determined based on the sum of the undiscounted cash
flows expected to result from the use and the eventual disposal of the asset, as
well as specific appraisal in certain instances. An impairment loss is
recognized when the carrying amount is not recoverable and exceeds fair value.

Deferred Loan Costs

Deferred loan costs are amortized over the respective terms of the secured
investor certificates and the line of credit using the straight-line method
which approximates the effective interest method.

Revenue Recognition

Interest income on mortgage loans and the bond portfolio is recognized as
earned. Deferred income represents loan origination fees, which are recognized
over the life of the loan as an adjustment to the yield on the loan.

Income Taxes

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

                                      F-10

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

Income Per Common Share

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

Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 157 (SFAS 157), Fair Value
Measurements. SFAS 157 defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurements. The statement
is effective for (1) financial assets and liabilities in financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years and (2) certain non-financial assets and liabilities
in financial statements issued for fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The Company is evaluating
the effect, if any, that the adoption of SFAS 157 will have on its results of
operations, financial position, and the related disclosures.

In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, (SFAS 159), The Fair Value Option for Financial Assets and Financial
Liabilities - Including an amendment of FASB Statement No. 115 (Accounting for
Certain Investments in Debt and Equity Securities). SFAS 159 provides companies
with an option to report selected financial assets and liabilities at fair value
and is effective for fiscal years beginning after November 15, 2007 with early
adoption permitted. The Company is evaluating the effect, if any, that the
adoption of SFAS 159 will have on its results of operations, financial position,
and the related disclosures.

Repurchase of Common Stock

Although our common shares are not redeemable by us, we may, at our complete
discretion, repurchase shares offered to us from time to time by our
shareholders. In such event, we may pay whatever price Church Loan Advisors,
Inc., the "Advisor" to the Company, deems appropriate and reasonable, and any
such shares repurchased will be re-designated as "unissued," will no longer be
entitled to distribution of dividends and will cease to have voting rights.
Shares that may be purchased are not part of a publicly announced plan to
repurchase shares nor does the Company plan or anticipate any stock repurchase
plans.

2.    MORTGAGE LOANS AND BOND PORTFOLIO

At December 31, 2007, the Company had first mortgage loans receivable totaling
$34,040,983. The loans bear interest ranging from 7.50% to 12.00% at December
31, 2007. At December 31, 2006, the Company had first mortgage loans receivable
totaling $37,949,998 that bore interest ranging from 7.75% to 12.00%.

The Company also had a portfolio of secured church bonds at December 31, 2007
and 2006, which are carried at cost plus amortized interest income, which
approximates fair value since the bonds are callable at any time by the issuer
at par. The bonds pay either semi-annual or quarterly interest ranging from
4.50% to 12.00%. The combined principal of $11,392,790 at December 31, 2007 is
due at various maturity dates between February 1, 2008 and November 15, 2037.
Eight bond issues comprised 85% of the Company's bond portfolio at December 31,
2007. Six bond issues comprised 85% of the Company's bond portfolio at December
31, 2006. The Company recorded an allowance of $100,000 at December 31, 2007 for
one bond series that is in default. This bond series is approximately 18% of the
bond portfolio at December 31, 2007. The Company had maturities of bonds of
approximately $730,000 and $658,000 in 2007 and 2006, respectively. The Company
purchased approximately $2,534,000 and $307,000 of bonds in 2007 and 2006,
respectively.

                                      F-11

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

The contractual  maturity  schedule for mortgage loans and the bond portfolio as
of December 31, 2007, is as follows:

                                           Mortgage Loans   Bond Portfolio
                                           --------------   --------------

        2008                                $   979,868      $    41,000
        2009                                    788,205           52,000
        2010                                  1,292,126          164,000
        2011                                    922,221          516,000
        2012                                    998,478          346,000
        Thereafter                           29,060,085       10,273,790
                                            -----------      -----------
                                             34,040,983       11,392,790
        Less loan loss and bond reserves        (72,056)        (100,000)
        Less discount from par                                   (29,077)
                                            -----------      -----------

                    Totals                  $33,968,927      $11,263,713
                                            ===========      ===========

The Company  currently owns $2,035,000  First Mortgage Bonds issued by St. Agnes
Missionary  Baptist Church.  St. Agnes  defaulted on its payment  obligations to
bondholders.   The  church  subsequently   commenced  a  Chapter  11  bankruptcy
reorganization  proceeding  regarding  three  properties in November  2007.  The
Company,  along with all other  bondholders,  has a superior lien over all other
creditors.  No accrual for interest receivable from the bonds is recorded by the
Company.

The church listed all three of its properties for sale for an aggregate price of
$19,166,668.  The  bondholders  are  currently  owed  $13,027,000  excluding any
accrued interest, fees or expenses. Herring Bank, Amarillo, Texas is trustee for
the  first  mortgage  bondholders.  Herring  Bank  and  its  legal  counsel  are
monitoring  the  bankruptcy  process  and will  advise  the  bondholders  of the
church's  re-organization  plans  when  made  available.  The  Company  reserved
$100,000  for the  bonds at  December  31,  2007.  When  additional  information
regarding  the  Church's  reorganization  plan is  provided,  the  Company  will
determine  whether an additional  valuation  adjustment for the bond  investment
should be recorded.

3. SECURED INVESTOR CERTIFICATES

Secured  investor  certificates  (see  Note  6) are  collateralized  by  certain
mortgage  loans  receivable or secured  church bonds of  approximately  the same
value as the certificates.  Additionally, the Company incurred deferred offering
costs  related to the debt  offerings.  The  maturity  schedule  for the secured
investor certificates at December 31, 2007 is as follows:

                                     Secured Investor
                                       Certificates
                                     ----------------

        2008                          $   2,197,000
        2009                              4,024,000
        2010                              1,145,000
        2011                                680,000
        2012                              1,167,000
        Thereafter                       13,618,000
                                      -------------

                   Totals             $  22,831,000
                                      =============

Interest expense related to these  Certificates for the years ended December 31,
2007 and 2006,  respectively,  is approximately  $1,657,000 and $1,724,000.  The
weighted  average interest rate on the certificates was 7.34% and 7.33% for 2007
and 2006, respectfully.

4. TRANSACTIONS WITH AFFILIATES

The  Company  has  an  Advisory  Agreement  with  Church  Loan  Advisors,  Inc.,
Minnetonka, Minnesota ("Advisor"). The Advisor is responsible for the day-to-day
operations of the Company and provides office space, administrative services and
personnel.

                                      F-12

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

Under the terms of the  Advisory  Agreement,  the  Company  pays the  Advisor an
annual  base  management  fee of 1.25% of  average  invested  assets  (generally
defined as the  average of the  aggregate  book value of the assets  invested in
first mortgage bonds and loans secured by real estate) up to $35 million,  1.00%
of assets from $35 million to $50 million,  and 0.75% on assets in excess of $50
million, which is payable on a monthly basis. The Advisor also receives one-half
of the  origination  fees paid by a mortgage loan borrower in connection  with a
mortgage  loan  made  or  renewed  by the  Company.  The  Company  paid  Advisor
management and origination  fees of  approximately  $487,000 and $573,000 during
2007 and 2006, respectively.  At December 31, 2006, the Company had a payable of
approximately $5,000 due to the Advisor.

The Advisor and the Company are  related  through  common  ownership  and common
management. See Notes 1 and 6 for additional transactions.

5. INCOME TAXES

As discussed in Note 1, a REIT is subject to taxation to the extent that taxable
income exceeds  dividend  distributions  to  shareholders.  In order to maintain
status as a REIT,  the  Company is required  to  distribute  at least 90% of its
taxable  income.  In 2007,  the  Company  had  pretax  income  of  $853,190  and
distributions  to shareholders  in the form of dividends  during the tax year of
$654,572. The expected tax expense to the Company, pre-dividends would have been
$290,085. In 2006, the Company had pretax income $1,154,168 and distributions to
shareholders  in the form of dividends  during the tax year of  $1,485,275.  The
expected tax expense to the Company, pre-dividends,  would have been $392,417 in
2006. The Company paid out 100% of taxable income in dividends in 2007 and 2006.

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

                                                    2007         2006
                                                 ----------   ----------

        Expected tax expense                     $  290,085   $  392,417
        Realized Tax Loss                          (284,427)          --
        Benefit of REIT distributions              (129,118)    (504,994)
        Valuation allowance                          63,460      112,577
                                                 ----------   ----------

                    Total provision              $  (60,000)  $       --
                                                 ==========   ==========

The components of deferred income taxes are as follows:

                                                    2007         2006
                                                 ----------   ----------
        Loan origination fees                    $  213,036   $  229,131
        Loan loss allowance                          58,499       33,069
        Real-estate impairment                      215,997      406,697
        Valuation allowance                        (487,532)    (608,897)
                                                 ----------   ----------

                    Total deferred income tax    $       --   $   60,000
                                                 ==========   ==========

The total deferred tax assets are as follows:
                                                    2007         2006
                                                 ----------   ----------
        Deferred tax assets                      $  487,532   $  668,897
        Deferred tax asset valuation allowance     (487,532)    (608,897)
                                                 ----------   ----------

                    Net deferred tax asset       $       --   $   60,000
                                                 ==========   ==========

The change in the valuation allowance was approximately $63,000 and $113,000 for
2007 and 2006, respectively.

                                      F-13

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

6. PUBLIC OFFERINGS OF THE COMPANY

In July 2004, the Company filed a Registration Statement with the Securities and
Exchange  Commission for a second public offering of debt securities,  which the
Securities  and Exchange  Commission  declared  effective  October 7, 2004.  The
Company  concluded  the  offering  on  October  7,  2006.  The  Company  offered
$23,000,000  principal  amount of its  Series B secured  investor  certificates.
Certificates  could be purchased in any multiple of $1,000.  We sold $14,860,000
of secured investor certificates during the offering.

Pursuant  to the  terms of the  Underwriting  Agreement,  the  Company  incurred
commissions and non-reimbursable expenses and paid approximately $173,000 during
2006 in connection with these public  offerings to the managing  underwriter and
participating broker-dealers.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial  instruments,  none of which
are held for trading purposes, are as follows at December 31, 2007 and 2006:

<TABLE>
<CAPTION>
                                                 2007                        2006
                                      -------------------------   -------------------------
                                        Carrying       Fair         Carrying       Fair
                                         Amount        Value         Amount        Value
                                      -----------   -----------   -----------   -----------
<S>                                   <C>           <C>           <C>           <C>
      Cash and equivalents            $   285,118   $   285,118   $   232,258   $   232,258
      Accounts receivable                 112,546       112,546       136,709       136,709
      Interest receivable                 151,105       151,105       164,923       164,923
      Mortgage loans receivable        33,968,927    33,968,927    37,852,736    37,852,736
      Bond portfolio                   11,263,713    11,263,713     9,550,697     9,550,697
      Secured investor certificates    22,831,000    22,831,000    26,638,000    26,638,000
</TABLE>

The carrying value of cash and equivalents approximates fair value. The carrying
value of the mortgage loans  receivable  approximates  fair value because of the
substantial  turnover and activity in this portfolio.  The carrying value of the
bond portfolio  approximates  amortized cost since our bonds are callable at any
time  by  the  issuer  at  par.  The  carrying  value  of the  secured  investor
certificates  approximates  fair value  because the interest  rates at which the
certificates have been sold have not changed significantly in the past year.

8. LINE OF CREDIT

The Company obtained a $1,000,000 line of credit with its bank on July 22, 1999,
which was  increased to $2,000,000 on March 18, 2002 and increased to $3,000,000
on February 13, 2007,  subject to certain  borrowing base  limitations,  through
August 1, 2007. Interest was charged at 0.50% over the prime rate, which totaled
8.75% at December 31,  2007.  The line of credit was fully paid on July 26, 2007
by the KeyBank  facility  discussed  below,  leaving no balance  outstanding  at
December 31, 2007.  There was  interest  expense in the amount of  approximately
$41,000 related to the line of credit for December 31, 2007.

On July 26, 2007, the Company  entered into a three-year,  adjustable  rate, $15
million revolving credit facility with KeyBank National Association. There was a
balance of  $3,350,000  outstanding  at December  31,  2007.  There was interest
expense in the amount of  approximately  $86,000  related  to the  facility  for
December  31,  2007.  Interest  is charged at the LIBOR rate plus an  applicable
margin,  which was 1.50% at December 31, 2007. The total interest rate was 6.56%
at December 31, 2007. The applicable  margin is indexed based upon the Company's
financial performance as described below.

The Credit Agreement contains customary affirmative and negative covenants.  The
financial covenants include borrowing base restrictions,  a maximum indebtedness
to assets ratio,  a minimum cash flow  coverage  ratio,  a minimum  tangible net
worth  ratio,  and a  maximum  non-performing  assets  ratio.  The  creation  of
indebtedness  outside the credit facility,  creation of liens, making of certain
investments,  sale of assets,  and  incurrence of debt are all either limited or
require prior  approval from KeyBank or the lenders under the Credit  Agreement.
The  Credit  Agreement  also  contains  customary  events  of  default  such  as
nonpayment,  bankruptcy,  and  change  in  control,  which  if  they  occur  may
constitute an event of default. Additionally, under certain circumstances, total
availability  under the credit  facility can be  increased  to $25 million.  The
revolving credit facility is

                                      F-14

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                          Notes to Financial Statements
                           December 31, 2007 and 2006

secured  by a first  priority  security  interest  in  substantially  all of the
Company's  assets other than collateral  pledged to secure the Company's  Series
"A" and Series "B" secured investor certificates

The  Company's  applicable  margin rate is currently  1.50% over LIBOR for LIBOR
rate loans and 0.25% over prime rate for base rate loans. Based on the Company's
borrowing base adjusted  leverage ratio this applicable  margin can be adjusted,
on any date of  determination,  either upward or downward based on the following
schedule:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                          Per Annum Percentage for LIBOR     Per Annum Percentage for Base
        Total Leverage Ratio:                          Loans                          Rate Loans
----------------------------------------------------------------------------------------------------------
<S>                                       <C>                                <C>
Greater than or equal to 60%                          1.875%                              0.50%
----------------------------------------------------------------------------------------------------------
Less than 60% but greater than or
equal to 55%                                           1.50%                              0.25%
----------------------------------------------------------------------------------------------------------
Less than 55%                                          1.35%                              0.00%
----------------------------------------------------------------------------------------------------------
</TABLE>

The total leverage  ratio is determined by dividing  total  liabilities by total
adjusted tangible asset value.

9. AMENDMENT TO FINANCIAL STATEMENT

The Company has changed the  presentation of interest  expense and the provision
for losses on mortgage loans receivable and bonds on the Statement of Operations
to include these accounts as components of net interest income.

                                      F-15

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                             Condensed Balance Sheet

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                          ASSETS                                  September 30, 2008    December 31, 2007
---------------------------------------------------------------------------------------------------------
                                                                      (Unaudited)
<S>                                                               <C>                   <C>
Current Assets
   Cash and equivalents                                           $          516,190    $         285,118
   Accounts receivable                                                       119,189              112,546
   Interest receivable                                                       153,595              151,105
   Current maturities of mortgage loans receivable, net of
      allowance of $71,035 at September 30, 2008 and
      $72,056 at December 31, 2007                                           646,016              907,812
   Current maturities of bond portfolio                                       53,000               41,000
   Prepaid expenses                                                           15,358                7,072
                                                                  ------------------    -----------------
         Total current assets                                              1,503,348            1,504,653

Mortgage Loans Receivable, net of current maturities                      33,124,302           33,061,115

Real-Estate Held for Sale                                                  1,165,125            1,566,561

Deferred Secured Investor Certificates Offering Costs,
   net of accumulated amortization of $951,159 at
   September 30, 2008 and $841,437 at December 31, 2007                      637,042              700,479

Deferred Line of Credit Costs, net of accumulated
   amortization of $656 at September 30, 2008 and
   $36,652 at December 31, 2007                                               15,094              227,278

Bond Portfolio, net of current maturities and allowance
   of $300,000 at September 30, 2008 and
   $100,000 at December 31, 2007                                          11,629,585           11,222,713
                                                                  ------------------    -----------------

         Total assets                                             $       48,074,496    $      48,282,799
                                                                  ==================    =================
</TABLE>

 Notes to Unaudited Condensed Financial Statements are an integral part of this
                                   Statement.

                                      F-16

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                             Condensed Balance Sheet

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
           LIABILITIES AND STOCKHOLDERS' EQUITY                   September 30, 2008    December 31, 2007
---------------------------------------------------------------------------------------------------------
                                                                      (Unaudited)
<S>                                                               <C>                   <C>
Current Liabilities
   Current maturities of investor saver certificates              $        2,502,000    $       2,197,000
   Line of credit                                                          4,200,000            3,350,000
   Accounts payable                                                           21,995               28,941
   Accrued expenses                                                            9,333               18,022
   Building funds payable                                                    577,595               50,000
   Current maturities of deferred income                                      30,165               30,412
   Dividends payable                                                         247,208              124,680
                                                                  ------------------    -----------------
         Total current liabilities                                         7,588,296            5,799,055

Deferred Income, net of current maturities                                   577,614              596,164

Secured Investor Certificates, Series A                                    4,843,000            6,008,000
Secured Investor Certificates, Series B                                   14,608,000           14,626,000

Stockholders' Equity
   Common stock, par value $.01 per share
      Authorized, 30,000,000 shares
      Issued and outstanding, 2,472,081 at September 30,
      2008 and 2,493,595 at December 31, 2007                                 24,721               24,936
   Additional paid-in capital                                             22,814,911           22,927,644
   Accumulated deficit                                                    (2,382,046)          (1,699,000)
                                                                  ------------------    -----------------
         Total stockholders' equity                                       20,457,586           21,253,580
                                                                  ------------------    -----------------

         Total liabilities and equity                             $       48,074,496    $      48,282,799
                                                                  ==================    =================
</TABLE>

 Notes to Unaudited Condensed Financial Statements are an integral part of this
                                   Statement.

                                      F-17

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                       Condensed Statements of Operations


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                   Nine Months Ended
                                                                                     September 30,
                                                                             ------------------------------
                                                                                 2008              2007
                                                                              (Restated)        (Restated)
-----------------------------------------------------------------------------------------------------------
                                                                                      (Unaudited)
<S>                                                                          <C>               <C>
Revenues
   Interest income loans                                                     $  2,156,934      $  2,306,493
   Interest income bonds                                                          553,776           578,891
   Capital gains realized                                                          20,890            13,287
   Origination income                                                              69,958           135,542
                                                                             ------------      ------------
      Total revenues                                                            2,801,558         3,034,213

   Interest Expense                                                             1,286,118         1,334,115
                                                                             ------------      ------------

   Net interest income                                                          1,515,440         1,700,098

   Provision for losses on mortgage loans receivable                               31,730            33,101
   Provision for losses on bonds                                                  200,000                --
                                                                             ------------      ------------
   Total provision for losses on mortgage loans and bonds                         231,730            33,101
                                                                             ------------      ------------

   Net interest income after provision for mortgage and bond losses             1,283,710         1,666,997

Operating expenses
   Professional fees                                                              120,899            52,304
   Real estate held for sale impairment                                           305,779           161,805
   Costs associated with real estate held for sale                                129,918           107,643
   Director fees                                                                    3,200             3,600
   Advisory fees                                                                  299,772           312,905
   Amortization expense                                                           307,656           150,914
   Other                                                                           55,757            60,710
                                                                             ------------      ------------
      Total operating expenses                                                  1,222,981           849,881
                                                                             ------------      ------------

Net Income                                                                   $     60,729      $    817,116
                                                                             ============      ============

Basic and Diluted Income Per Common Share                                    $       0.02      $       0.33
                                                                             ============      ============

Dividends Declared Per Share                                                 $       0.30      $       0.21
                                                                             ============      ============

Weighted Average Common Shares Outstanding                                      2,483,231         2,493,595
                                                                             ============      ============
</TABLE>


 Notes to Unaudited Condensed Financial Statements are an integral part of this
                                   Statement.

                                      F-18

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                       Condensed Statements of Cash Flows

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------
                                                                             Nine Months Ended September 30,
                                                                                 2008              2007
------------------------------------------------------------------------------------------------------------
                                                                                       (Unaudited)
<S>                                                                          <C>               <C>
Cash Flows from Operating Activities
   Net income                                                                $     60,729      $     817,116
   Adjustments to reconcile net income to net cash
      from operating activities:
      Impairment loss on real estate held for sale                                305,779            161,805
      Provision for losses on mortgage loans receivable                            31,730             33,101
      Provision for losses on bond portfolio                                      200,000
      Amortization expense                                                        307,656            150,180
      Change in assets and liabilities
         Accounts receivable                                                      (32,435)           (41,147)
         Interest receivable                                                       (2,490)            24,366
         Prepaid expenses                                                          (8,286)            (3,261)
         Accounts payable                                                          (6,946)            25,185
         Accrued expenses                                                          (8,689)                --
         Deferred income                                                          (18,797)           (81,783)
                                                                             ------------      -------------
         Net cash from operating activities                                       828,251          1,085,562

Cash Flows from Investing Activities
   Investment in mortgage loans                                                (1,309,214)        (4,284,088)
   Collections of mortgage loans                                                1,944,605          9,204,813
   Investment in bond portfolio                                                (1,069,655)        (2,203,460)
   Proceeds from bond portfolio                                                   450,783            149,192
                                                                             ------------      -------------
         Net cash provided by investing activities                                 16,519          2,866,457

Cash Flows from Financing Activities
   Proceeds from sale of property                                                 180,532            130,343
   Proceeds from (payments on) line of credit, net                                850,000         (1,488,815)
   Payments on secured investor certificate maturities                           (878,000)        (1,595,000)
   Payments for deferred costs                                                    (32,035)          (103,668)
   Stock redemptions                                                             (112,948)                --
   Dividends paid                                                                (621,247)          (864,969)
                                                                             ------------      -------------
         Net cash used for financing activities                                  (613,698)        (3,922,109)
                                                                             ------------      -------------

Net Increase in Cash and Equivalents                                              231,072             29,910

Cash and Equivalents - Beginning of Year                                          285,118            232,258
                                                                             ------------      -------------

Cash and Equivalents - End of Year                                           $    516,190      $     262,168
                                                                             ============      =============
</TABLE>

 Notes to Unaudited Condensed Financial Statements are an integral part of this
                                   Statement.

                                      F-19

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY

                 Condensed Statements of Cash Flows - Continued

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                             Nine Months Ended September 30,
                                                                                 2008              2007
------------------------------------------------------------------------------------------------------------
                                                                                      (Unaudited)
<S>                                                                          <C>               <C>
Supplemental Schedule of Noncash Financing and
   Investing Activities

     Dividends payable                                                       $    247,208      $      62,341
                                                                             ============      =============

     Mortgage and accounts receivable transferred to
        real estate held for sale                                            $    735,990      $   1,189,676
                                                                             ============      =============

     Reclassification of real estate held for sale transferred to
        mortgage receivable                                                  $    645,000      $          --
                                                                             ============      =============

Supplemental Cash Flow Information
   Cash paid during the period for
       Interest                                                              $  1,294,807      $   1,334,115
                                                                             ============      =============
</TABLE>

 Notes to Unaudited Condensed Financial Statements are an integral part of this
                                   Statement.

                                      F-20

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                Notes to Unaudited Condensed Financial Statements
                               September 30, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

The unaudited  condensed  financial  statements of the Company should be read in
conjunction with its December 31, 2007 audited financial  statements included in
the Company's  Annual Report on Form 10-KSB,  as filed with the  Securities  and
Exchange Commission for the year ended December 31, 2007.  Operating results for
the periods presented are not necessarily  indicative of the results that may be
expected for the year ended December 31, 2008.

Nature of Business

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

Accounting Estimates

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

Cash and Equivalents

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

The Company maintains accounts primarily at two financial institutions. At times
throughout  the year,  the Company's  cash and  equivalents  balances may exceed
amounts  insured by the Federal  Deposit  Insurance  Corporation.  Cash in money
market funds is not  Federally  insured.  At September 30, 2008 and December 31,
2007, such investments  were $5,000.  The Company has not experienced any losses
in such accounts.

Bond Portfolio

The Company accounts for the bond portfolio under Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The
Company    classifies    its   bond   portfolio   as    "available-for    sale."
Available-for-sale bonds are carried at fair value.

Allowance for Mortgage Loans Receivable

The Company records  mortgage loans receivable at their estimated net realizable
value,  which is the unpaid  principal  balance less the  allowance for mortgage
loans.   The  Company's   loan  policy   provides  an  allowance  for  estimated
uncollectible  loans based on an  evaluation  of the current  status of the loan
portfolio.   This  policy  reserves  for  principal  amounts  outstanding  on  a
particular loan if cumulative interruptions occur in the normal payment schedule
of a loan. The Company  reserves for the outstanding  principal amount of a loan
in  the  Company's   portfolio  if  the  amount  is  in  doubt  of   collection.
Additionally, no

                                      F-21

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                Notes to Unaudited Condensed Financial Statements
                               September 30, 2008

interest  income  is  recognized  on  non-performing   loans  that  are  in  the
foreclosure  process.  At December 31, 2007, the Company reserved  approximately
$72,000 for fourteen  mortgage  loans, of which four churches were three or more
mortgage  payments  in  arrears.  Three  of the  loans  were in the  foreclosure
process, of which one church had declared bankruptcy. At September 30, 2008, the
Company reserved  approximately $71,000 for eleven mortgage loans, of which five
churches are three or more mortgage payments in arrears and one church is in the
foreclosure process.

The  total  value of  non-performing  loans,  which  are  loans  that are in the
foreclosure process or are no longer performing,  was approximately $238,000 and
$1,156,000 at September 30, 2008 and December 31, 2007, respectively,  which the
Company believes is adequately secured by the underlying collateral.

Real Estate Held for Sale

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

Foreclosure  was  completed  on a church  located  in Tyler,  Texas.  The church
congregation  is now meeting in a different  location and the church property is
currently  unoccupied.  The Company owns and has taken  possession of the church
and has listed the property for sale through a local realtor.

A deed in lieu of  foreclosure  was received from a church located in Cleveland,
Ohio. The Company took possession of the church and listed the property for sale
through a local  realtor.  The sale of the property was completed on January 18,
2008.  The property  sold for  approximately  $215,000 and the Company  received
proceeds of  approximately  $181,000 from the sale of the property after closing
costs and  realtor  fees.  The  Company  realized a tax  deductible  loss on the
property totaling approximately $221,000.

Foreclosure  was  completed  on a church  located  in Dayton,  Ohio.  The church
congregation  is now meeting in a different  location and the church property is
currently  unoccupied.  The Company took possession of the church and listed the
property for sale through a local realtor.

Foreclosure was completed on a church located in Dallas, Texas. The Company took
possession  of the property and received an earnest  money  deposit from a buyer
who needed to obtain a certificate  of occupancy.  The  certificate of occupancy
was obtained,  and the sale of the property was completed on September 30, 2008.
The  property  sold  for  approximately   $645,000.  The  Company  recognized  a
tax-deductible loss on the property totaling approximately $180,000.

Foreclosure was completed on a church located in Anderson,  Indiana. The Company
took  possession  of the property in May 2008,  and is currently  preparing  the
property to be listed for sale.

Foreclosure was completed on a church located in Lancaster,  Texas.  The Company
took  possession  of the  property in July 2008 and has listed the  property for
sale. In order to obtain a certificate  of occupancy,  a new parking lot must be
completed,  as the previous  owner began to replace the parking lot without city
approval.  The Company will most likely need to reduce the price of the property
by the cost of the new parking lot.

The Company  recorded the real estate held for sale at fair value,  which is net
of the expected expenses related to the sale of the real estate.

Carrying Value of Long-lived Assets

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

                                      F-22

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                Notes to Unaudited Condensed Financial Statements
                               September 30, 2008

Recoverability  is assessed  based on the carrying  amount of the asset and fair
value,  which is generally  determined based on the sum of the undiscounted cash
flows expected to result from the use and the eventual disposal of the asset, as
well  as  specific  appraisal  in  certain  instances.  An  impairment  loss  is
recognized when the carrying amount is not recoverable and exceeds fair value.

Revenue Recognition

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

2. FAIR VALUE MEASUREMENT

Effective January 1, 2008, the Company adopted Statement of Financial Accounting
Standard No. 157,  "Fair Value  Measurements"  (SFAS 157),  as it applies to our
financial  instruments,  and Statement of Financial Accounting Standard No. 159,
"The Fair  Value  Option  for  Financial  Assets  and  Financial  Liabilities  -
Including an amendment of FASB  Statement No. 115" (SFAS 159).  SFAS 157 defines
fair  value,  outlines a framework  for  measuring  fair value,  and details the
required  disclosures about fair value measurements.  SFAS 159 permits companies
to irrevocably  choose to measure certain financial  instruments and other items
at  fair  value.   SFAS  159  also   establishes   presentation  and  disclosure
requirements  designed to  facilitate  comparison  between  entities that choose
different measurement attributes for similar types of assets and liabilities.

Under SFAS 157,  fair value is  defined as the price that would be  received  to
sell an asset or paid to transfer a liability in an orderly  transaction between
market   participants  at  the  measurement   date  in  the  principal  or  most
advantageous  market.  SFAS 157  establishes a hierarchy in determining the fair
value of an asset or  liability.  The fair value  hierarchy  has three levels of
inputs,  both observable and unobservable.  SFAS 157 requires the utilization of
the lowest  possible  level of input to  determine  fair  value.  Level 1 inputs
include  quoted  market  prices  in an active  market  for  identical  assets or
liabilities.  Level 2 inputs  are  market  data,  other  than  Level 1, that are
observable  either directly or indirectly.  Level 2 inputs include quoted market
prices for similar  assets or  liabilities,  quoted market prices in an inactive
market,  and other  observable  information  that can be  corroborated by market
data.  Level 3 inputs are  unobservable  and corroborated by little or no market
data.

Except for the bond  portfolio,  which is required by  authoritative  accounting
guidance to be recorded at fair value in our Balance Sheets, the Company elected
not to record  any other  financial  assets or  liabilities  at fair  value,  as
permitted by SFAS 159. No events occurred during the nine months ended September
30, 2008 which would require adjustment to the recognized  balances of assets or
liabilities which are recorded at fair value on a nonrecurring basis.

The following table  summarizes the Company's  financial  instruments  that were
measured at fair value on a recurring basis at September 30, 2008.

                                                          Fair Value
                                                          Measurement
                                           Fair Value       Level 3
                                          -----------     -----------

           Bond portfolio                 $11,682,585     $11,682,585
                                          ===========     ===========

We determine  the fair value of the bond  portfolio  shown in the table above by
using  widely  accepted  valuation  techniques  including  discounted  cash flow
analysis on the  expected  cash flows of the bonds.  The  analysis  reflects the
contractual  terms of the bonds,  which are  callable by the issuer at any time,
including the period to maturity and the anticipated cash flows of the bonds and
uses observable market-based inputs.

                                      F-23

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                Notes to Unaudited Condensed Financial Statements
                               September 30, 2008

The  change in level 3 assets  measured  at fair value on a  recurring  basis is
summarized as follows at September 30, 2008:

                                                   Bond Portfolio
                                                   --------------

      Beginning balance January 1, 2008            $   11,263,713
      Purchases                                         1,069,655
      Proceeds                                           (450,783)
      Reserves                                           (200,000)
      Unrealized gains                                    245,000
      Callability provision                              (245,000)
                                                   --------------

      Ending balance September 30, 2008            $   11,682,585
                                                   ==============

3. MORTGAGE LOANS AND BOND PORTFOLIO

At September 30, 2008, the Company had first mortgage loans receivable  totaling
$33,841,353.  The loans bear interest  ranging from 5.00% to 12.00% at September
30, 2008.

The Company also had a portfolio of secured  church bonds at September 30, 2008.
The bonds pay either  semi-annual  or quarterly  interest  ranging from 4.50% to
12.00%.  The  aggregate   principal  amount  of  secured  church  bonds  equaled
$12,018,000 at September 30, 2008. This amount is due at various  maturity dates
between December 15, 2008 and February 15, 2039.

The contractual maturity schedule for mortgage loans and the bond portfolio as
of September 30, 2008, is as follows:

<TABLE>
<CAPTION>
                                                   Mortgage Loans   Bond Portfolio
                                                   --------------   --------------
<S>                                                <C>              <C>
      October 1, 2008 through September 30, 2009   $      717,051   $       53,000
      October 1, 2009 through December 31, 2009           188,297           27,000
      2010                                              1,216,512          175,000
      2011                                                851,394          525,000
      2012                                                938,452          351,000
      Thereafter                                       29,929,647       10,887,000
                                                   --------------   --------------
                                                       33,841,353       12,018,000
      Less loan loss and bond reserves                    (71,035)        (300,000)
      Less discount from par                                   --          (35,415)
                                                   --------------   --------------

         Totals                                    $   33,770,318   $   11,682,585
                                                   ==============   ==============
</TABLE>

The Company  currently owns $2,035,000  First Mortgage Bonds issued by St. Agnes
Missionary Baptist Church located in Houston,  Texas. St. Agnes defaulted on its
payment obligations to bondholders.  The church subsequently commenced a Chapter
11 bankruptcy  reorganization  proceeding  regarding the three  properties  that
secure the church bonds in November 2007, which was dismissed in September 2008,
and the church was  subsequently  foreclosed  upon. The Company,  along with all
other bondholders,  has a superior lien over all other creditors. No accrual for
interest  receivable  from the bonds is  recorded  by the  Company.  The Company
reserved  $300,000 for the bonds at September  30, 2008 and $100,000 at December
31, 2007.

                                      F-24

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                Notes to Unaudited Condensed Financial Statements
                               September 30, 2008

4. SECURED INVESTOR CERTIFICATES

Secured  investor  certificates  are  collateralized  by certain  mortgage loans
receivable  or  secured  church  bonds of  approximately  the same  value as the
certificates.  The weighted  average interest rate on the certificates was 6.79%
at  September  30,  2008.  The  maturity   schedule  for  the  secured  investor
certificates at September 30, 2008 is as follows:

                                                     Secured
                                                     Investor
                                                   Certificates
                                                   ------------

      October 1, 2008 through September 30, 2009   $  2,502,000
      October 1, 2009 through December 31, 2009       2,058,000
      2010                                            1,151,000
      2011                                              850,000
      2012                                            1,167,000
      Thereafter                                     14,225,000
                                                   ------------

         Totals                                    $ 21,953,000
                                                   ============

Interest expense related to these certificates was approximately  $1,142,000 and
$1,266,000 for the nine months ended September 30, 2008 and 2007, respectively.

In October 2008, the Company filed a registration  statement with the Securities
and Exchange  Commission to offer Series "C" secured  investors  certificates of
$20,000,000.  Upon being declared effective by the SEC, the certificates will be
offered in multiples of $1,000 with interest  rates ranging from 6.25% to 7.25%,
subject to  changing  market  rates,  and  maturities  from 13 to 20 years.  The
certificates  will be  collateralized  by certain  mortgage loans receivable and
church bonds of approximately the same value.

5. TRANSACTIONS WITH AFFILIATES

The  Company  has  an  Advisory  Agreement  with  Church  Loan  Advisors,  Inc.,
Minnetonka, Minnesota ("Advisor"). The Advisor is responsible for the day-to-day
operations of the Company and provides office space, administrative services and
personnel.  The Advisor and the Company are related through common ownership and
common management.  The Company paid the Advisor management and origination fees
of  approximately  $342,000 and $331,000 for the nine months ended September 30,
2008 and 2007, respectively. The Company repurchased approximately 22,000 common
stock shares from American  Investors Group,  Inc. for  approximately  $5.25 per
share in the nine months ended  September 30, 2008.  American  Investors  Group,
Inc. is related to the Company through common management.

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial  instruments,  none of which
are held for trading purposes, are as follows at September 30, 2008 and December
31, 2007:

<TABLE>
<CAPTION>
                                         September 30, 2008           December 31, 2007
                                      -------------------------   -------------------------
                                        Carrying       Fair         Carrying       Fair
                                         Amount        Value         Amount        Value
                                      -----------   -----------   -----------   -----------
<S>                                   <C>           <C>           <C>           <C>
      Cash and equivalents            $   516,190   $   516,190   $   285,118   $   285,118
      Accounts receivable                 119,189       119,189       112,546       112,546
      Interest receivable                 153,595       153,595       151,105       151,105
      Mortgage loans receivable        33,770,318    32,819,125    33,968,927    33,968,927
      Bond portfolio                   11,682,585    11,682,585    11,263,713    11,263,713
      Secured investor certificates    21,953,000    21,953,000    22,831,000    22,831,000
</TABLE>

                                      F-25

<PAGE>

                        AMERICAN CHURCH MORTGAGE COMPANY
                Notes to Unaudited Condensed Financial Statements
                               September 30, 2008

At September  30, 2008,  the fair value of the mortgage  loan  portfolio is less
than the carrying value as the portfolio is currently yielding a lower rate than
similar  mortgages with similar terms for borrowers with similar credit quality.
The  changes  in the credit  markets in which we  transact  has  experienced  an
increase in interest  rates  resulting in the fair value of the  mortgage  loans
falling  during the nine months ended  September 30, 2008. The carrying value of
the bond portfolio  approximates  amortized cost since our bonds are callable at
any time by the issuer at par and the bond  portfolio  yield is currently  lower
than the  interest  rates on  similar  instruments.  The  carrying  value of the
secured investor certificates approximates fair value because the interest rates
at which the certificates have been sold have not changed significantly.

7. LINE OF CREDIT

The Company obtained an $8,000,000 line of credit with Beacon Bank replacing the
$15  million  revolving  credit  facility  with  KeyBank  National  Association.
Advances on the new line of credit are  available up to  $4,500,000,  subject to
borrowing base  limitations,  until Beacon Bank  participates  out the remaining
portion  of the line of credit  up to  $8,000,000.  Interest  on the new line of
credit is charged monthly at the prime rate with minimum interest of 5.00%. When
the prime rate is greater than 6.00%,  the interest  rate will be the prime rate
less .50%,  subject to a minimum  interest rate of 6.00%.  The line of credit is
secured  by a first  priority  security  interest  in  substantially  all of the
Company's  assets other than collateral  pledged to secure the Company's  Series
"A" and Series "B" secured  investor  certificates.  At September 30, 2008,  the
interest  rate on the  facility  is 5.00% and we had an  outstanding  balance of
$4,200,000.

8. AMENDMENT TO FINANCIAL STATEMENT

The Company has changed the  presentation of interest  expense and the provision
for losses on mortgage loans receivable and bonds on the Statement of Operations
to include these accounts as components of net interest income.

                                      F-26

<PAGE>

                                                              Exhibit A

<TABLE>
<S>        <C>                                 <C>                           <C>                      <C>
                                               ---------------------------------------------------------------------------------

[LOGO]     AMERICAN INVESTORS GROUP, INC.      Account Application                                    Account Number:
                                               [ ] New Account (Check One|                            _______________________
             10237 Yellow Circle Drive         [ ] Update                    Years Known:______
               Minnetonks, MN 55343
                                               ---------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
1.    Account Registration: (Check One):
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
[ ] Individual              [ ] Joint Tenants with Rights of Survivorship       [ ] Corporate*                [ ] Non-Profit*
[ ] Custodial               [ ] Community Property                              [ ] Partnership*              [ ] Trust*
[ ] Investment Club*        [ ] Pension/Profit Sharing Plan*                    [ ] Sole Proprietorship*      [ ] Estate*
[ ] IRA*                    [ ] Joint Tenants in Common (50%/50% unless otherwise noted ____% ____%)          [ ] TOD/POD
* Additional Paperwork May Be Required
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
2.    Account Registration:
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------

________________________________________________________________________________________________________________________________
Full Legal Name: Individual/Corporation/Trust/IRA Trustee                                            Social Security Number

________________________________________________________________________________________________________________________________
Full Legal Name: Co-Applicant/Minor/Trustees                                                         Social Security Number

________________________________________________________________________________________________________________________________
Home Address: (P.O. Box Unacceptable)                         City            State          Zip         Length at Residence

________________________________________________________________________________________________________________________________
Alternate Mailing Address (P.O. Box Acceptable)               City            State          Zip

_____________________         ____________________________      _______________________      ___________________________________
Date of Birth                 Date of Birth (Co-Applicant)      Daytime Phone                Evening Phone

______________________________       __________________________________________________      ___________________________________
Fax Number                           E-mail Address                                          Name of your Bank

--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
3.    Customer Identification Program (CIP)
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
To help the United States fight the funding of terrorism  and money  laundering  activities.  Federal law requires us to obtain,
verify and record information that identifies each person who opens an account with us.

Individuals:  [ ] Driver's License [ ] Govt. or State Issued I.D. [ ] Passport   Entities:  [ ] Trust Agreement Dated: _______

Issuer: ______________________________________________________________________              [ ] Articles of Incorporation

I.D. Number: _________________________________________________________________              [ ] Partnership Agreement

Date of Issuance: _______________  Date of Expiration ________________________   Other: _____________________________________

--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
4.    Investor Information
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Marital Status: [ ] Single [ ] Married [ ] Divorced [ ] Widowed Number of Dependents: __________ U.S. Citizen? [ ] Yes [ ] No*

Employment Information:  (Please specify if unemployed,  retired, homemaker or student. If unemployed or retired please indicate
your former occupation)

________________________________________________________________________________________________________________________________
Employer (If self-employed, please specify name of business.)                             Occupation or former Occupation

____________________________
Length of current Employment

Co-Applicant's Employment Information:  (Please specify if unemployed,  retired,  homemaker or student. If unemployed or retired
please indicate your former occupation)

________________________________________________________________________________________________________________________________
Employer  (If self-employed, please specify name of business.)                            Occupation or former Occupation

____________________________
Length of Current Employment
</TABLE>

<PAGE>

Office Use Only: ACCT.#: _______ CONS. ACCT #: ________ LAST NAME: _____________
FIRST NAME: ___________ REP NO. ________ REP. LAST NAME: ________________

--------------------------------------------------------------------------------
                                       American Investors Group, Inc. (10/07/03)
<TABLE>
<S>           <C>                                  <C>                               <C>
                                                   -----------------------------------------------------

[LOGO]        AMERICAN INVESTORS GROUP, INC.         Account Application             Account Number:
                                                     [Continued:]                    ___________________
                10237 Yellow Circle Drive          -----------------------------------------------------
                  Minnetonka, MN 55343
</TABLE>

--------------------------------------------------------------------------------
4.    Investor Information (Continued):
--------------------------------------------------------------------------------

Investment Objectives  [Check all that apply]:

[ ] Capital Preservation: Preserving the value of your existing assets by
                          investing in securities with a smaller degree of risk
                          of loss of principal.

[ ] Income: Generating current income rather than generating capital
            appreciation.

[ ] Growth: Generating capital appreciation by investing in securities with a
            higher degree of volatility and risk of loss of principal, which
            will generate little if any current income.

[ ] Speculation: Trading volatile securities with a higher than average
                 possibility of loss of principal with the hope of achieving
                 significant capital appreciation.

<TABLE>
<CAPTION>
Financial Information - Primary Applicant:  [ ] Check Here If You Are Combining Financial Information
------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Estimated Liquid Net Worth
   Investment Experience                                                                    (Cash, Bank C.D.'S,
      (# of Years)                Estimated Annual Income     Estimated Net Worth           Liquid Securities)       Tax Bracket
------------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>      <C>                       <C>                         <C>                          <C>
[ ] Stocks               _____    [ ] Under $25,000         [ ] Under $50,000           [ ] Under $50,000            [ ] 10%
[ ] Bonds                _____    [ ] $25,001 - $50,000     [ ] $50,000 - $100,000      [ ] $50,000 - $100,000       [ ] 15%
[ ] Mutual Funds         _____    [ ] $50,001 - $75,000     [ ] $100,001 - $150,000     [ ] $100,001 - $150,000      [ ] 25%
[ ] Municipal Bonds      _____    [ ] $75,001 - $100,000    [ ] $150,001 - $250,000     [ ] $150,001 - $250,000      [ ] 28%
[ ] Limited Partnerships _____    [ ] $100,001 - $175,000   [ ] $250,001 - $500,000     [ ] $250,001 - $500,000      [ ] 33%
                                  [ ] $175,001 - $250,000   [ ] $500,001 - $1,000,000   [ ] $500,001 - $1,000,000    [ ] 35%
                                  [ ] $250,001 - $500,000   [ ] Over $1,000,000         [ ] Over $1,000,000
                                  [ ] Over $500,001
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Financial Information - Co-Applicant (If Applicable):

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Estimated Liquid Net Worth
   Investment Experience                                                                    (Cash, Bank C.D.'S,
      (# of Years)                Estimated Annual Income     Estimated Net Worth           Liquid Securities)       Tax Bracket
------------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>      <C>                       <C>                         <C>                          <C>
[ ] Stocks               _____    [ ] Under $25,000         [ ] Under $50,000           [ ] Under $50,000            [ ] 10%
[ ] Bonds                _____    [ ] $25,001 - $50,000     [ ] $50,000 - $100,000      [ ] $50,000 - $100,000       [ ] 15%
[ ] Mutual Funds         _____    [ ] $50,001 - $75,000     [ ] $100,001 - $150,000     [ ] $100,001 - $150,000      [ ] 25%
[ ] Municipal Bonds      _____    [ ] $75,001 - $100,000    [ ] $150,001 - $250,000     [ ] $150,001 - $250,000      [ ] 28%
[ ] Limited Partnerships _____    [ ] $100,001 - $150,000   [ ] $250,001 - $500,000     [ ] $250,001 - $500,000      [ ] 33%
                                  [ ] $150,001 - $250,000   [ ] $500,001 - $1,000,000   [ ] $500,001 - $1,000,000    [ ] 35%
                                  [ ] $250,001 - $500,000   [ ] Over $1,000,000         [ ] Over $1,000,000
                                  [ ] Over $500,001
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
5.    Account Agreement (Please read and sign)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Certification of Taxpayer ID Number  (Substitute W-9): Under penalty of perjury,
you  certify  that (1) the number  shown on this form is your  correct  taxpayer
identification  number and (2) you are not subject to backup withholding because
(i) you are exempt from backup  withholding,  or (ii) you have not been notified
by the Internal Revenue Service (IRS) that you are subject to backup withholding
as a result of a failure to report all interest and dividends,  or (iii) the IRS
has notified you that you are no longer  subject to backup  withholding  and (3)
you are a U.S. person (including a U.S. resident alien).

--------------------------------------------------------------------------------
Arbitration  Agreement:  The customer agrees, and by carrying an account for the
customer, American Investors Group, Inc. agrees that all controversies which may
arise between us concerning any transaction or the construction, performance, or
breach of this or any other  agreement  between  us  pertaining  to  securities,
whether  entered  into prior,  on or  subsequent  to the date  hereof,  shall be
determined  by  arbitration.  Any  arbitration  under  this  agreement  shall be
conducted   pursuant  to  the  federal   arbitration  act  before  the  National
Association  of  Securities  Dealers,  Inc.  in  accordance  with the rules then
prevailing at the organization. Both parties agree that (i) arbitration is final
and binding on the  parties.  (ii) The  parties are waiving  their right to seek
remedies  in court,  including  the right to jury trial.  (iii)  Pre-arbitration
discovery is generally more limited than and different from court

<PAGE>

Proceedings.  (iv) The  arbitrators'  award is not  required to include  factual
findings or legal reasoning and the party's right to appeal or seek modification
of rulings by the arbitrators is strictly limited.  (v) The panel of arbitrators
will typically include a minority of arbitrators who were or are affiliated with
the securities industry.

--------------------------------------------------------------------------------

x _________________________________  x _________________________________________
  Applicant's Signature     (Date)     Co-Applicant's Signature        (Date)

--------------------------------------------------------------------------------
                               FOR BROKER USE ONLY

Rep Last Name: ______________   Rep #: _______________

x ____________________________________________  x ______________________________
  Registered Representative Signature  (Date)     Principal's Signature  (Date)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Office Use Only: ACCT.#: ____________ CONS. ACCT #: _______  LAST NAME: ________
FIRST NAME: ____________________ REP NO. _________ REP. LAST NAME: _____________

--------------------------------------------------------------------------------

                                       American Investors Group, Inc. (10/07/03)

<PAGE>

                        American Church Mortgage Company
                   Subscription Agreement for Kansas Residents

      To purchase Series C Secured Investor  Certificates,  and you are a Kansas
resident,  please complete this Subscription  Agreement,  which is a part of the
Account Application, and write a check made payable to "American Church Mortgage
Company" or to "American  Investors Group, Inc." as applicable.  Send the entire
Account  Application,  including this  Subscription  Agreement,  with your check
along with any other  documents  in the envelope  provided.  We will return your
copy to you once your Account Application has been reviewed and accepted.

      You should  purchase  certificates  only if you are  prepared  to hold the
certificates  until maturity,  only if you have significant  financial means and
only if you have no immediate  need for  liquidity of your  investment.  We have
established  financial  suitability standards for investors desiring to purchase
certificates.  You must purchase at least $1,000 worth of  certificates.  Please
also note that the Office of the Kansas Securities  Commissioner recommends that
you should limit your aggregate investment in our Certificates and other similar
investments  to not more than 10% of your liquid net worth.  Liquid net worth is
defined as that  portion of your total net worth  (total  assets  minus  totally
liabilities) that is comprised of cash, cash equivalents and readily  marketable
securities.  If you have any questions  regarding this form, please contact your
account representative or our customer service department at 1-800-815-1175.

-------------------------------------------------------------
Investor Name(s)/Entity Name(s) (print)
-----------------------------------------------------------


      THE  UNDERSIGNED  acknowledges  and/or  represents  (or  in  the  case  of
      fiduciary  accounts,  the  person  authorized  to sign on such  Investor's
      behalf) the following:


  [ ]   (A)   Acknowledges  receipt,  not less than five (5) business days prior
Initial       to the signing of this Subscription  Agreement,  of the Prospectus
              of the Company relating to the Certificates, wherein the terms and
              conditions  of the  offering of the  Certificates  are  described,
              including  among other things,  the  restrictions on ownership and
              transfer   of   Certificates,   which   require,   under   certain
              circumstances,  that a holder of  Certificates  shall give written
              notice and provide certain information to the Company.

  [ ]   (B)   The arbitration agreement included in the Account Application does
Initial       not  preclude  investors  from  contacting  the Kansas  Securities
              Commissioner  with respect to  compliance  with Kansas  securities
              laws or  regulations  in relation to a dispute or problem  with an
              investment or their account.

  [ ]   (C)   Represents  that I (we)  either:  (i) have a net worth  (excluding
Initial       home, home  furnishings  and  automobiles) of at least $70,000 and
              estimate that (without regard to investment in the Company) I (we)
              have gross income due in the current year of at least $70,000;  or
              (ii)  have a net  worth  (excluding  home,  home  furnishings  and
              automobiles)  of  at  least  $250,000;  and  have  considered  the
              recommendation of the Office of the Kansas Securities Commissioner
              above with respect to limiting my (our)  aggregate  investment  to
              not more than 10% of my (our)  liquid  net  worth;  in the case of
              sales to fiduciary accounts, the suitability standards must be met
              by the  beneficiary,  the  fiduciary  account  or by the  donor or
              grantor who  directly  or  indirectly  supplies  the funds for the
              purchase of the shares.

  [ ]   (D)   Represents  that the investor is purchasing the  Certificates  for
Initial       his  or  her  own  account  and  if  I  am  (we  are)   purchasing
              Certificates  on behalf  of a trust or other  entity of which I am
              (we  are)  trustee(s)  or  authorized  agent(s)  I (we)  have  due
              authority  to execute  the  Subscription  Agreement  and do hereby
              legally  bind the  trust or  other  entity  of which I am (we are)
              trustee(s) or authorized agent(s).

  [ ]   (E)   Acknowledges  that the  Certificates  are not liquid,  there is no
Initial       current market for the  Certificates  and the investors may not be
              able to sell the securities.

  [ ]   (F)   If an employee or affiliate of the  Company,  represents  that the
Initial       Certificates are being purchased for investment  purposes only and
              not for  immediate  resale;  if not an  employee or  affiliate,  I
              acknowledge that I have read this item.

----------------------------------------   -------------------------------------
Signature -- Investor                      Date
----------------------------------------   -------------------------------------
Signature -- Co-Investor (If Applicable)   Authorized Signature (Custodian or
                                           Trustee If Applicable)

<PAGE>

If a subscription is rejected,  the Company will promptly refund to the investor
the consideration paid for the certificates  without deduction or interest.  You
may rescind your purchase of certificates for up to five (5) business days after
you receive a final prospectus.

<PAGE>

                                    Exhibit B

                         STATE SUITABILITY REQUIREMENTS

If you are a resident  of one of the states  listed  below,  you must be able to
represent that you meet the financial suitability  requirements for the state in
which you live to invest in the  Series C Secured  Investor  Certificates  being
offered by American Church Mortgage  Company.  The investment firms that solicit
purchases are required by law to ask you whether you meet these  requirements to
determine  whether a purchase of the  certificates  is suitable for you.  Kansas
residents will also be required to complete the  Subscription  Agreement that is
part of the Account Application.

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

--------------------------------------------------------------------------------
                                ALTERNATIVE 2
             ALTERNATIVE 1    NET INCOME + NET      MINIMUM        MAXIMUM
  STATE        NET WORTH           WORTH          INVESTMENT      INVESTMENT
--------------------------------------------------------------------------------
Idaho        $     250,000   $70,000 net income   N/A          N/A
                             PLUS $70,000 net
                             worth

--------------------------------------------------------------------------------
Iowa         $     250,000   $70,000 net income   N/A          10% of Net Worth
                             PLUS $70,000 net
                             worth

--------------------------------------------------------------------------------
Kansas       $     250,000   $70,000 net income   N/A          It is recommended
                             PLUS $70,000 net                  that Kansas
                             worth                             investors limit
                                                               their investment
                                                               to no more than
                                                               10% of their
                                                               liquid net worth.

--------------------------------------------------------------------------------
Washington   $     250,000   $70,000 net income   N/A          N/A
                             PLUS $70,000 net
                             worth
--------------------------------------------------------------------------------

<PAGE>

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

                                TABLE OF CONTENTS
Prospectus Summary .......................................................     4
Risk Factors .............................................................    10
Who May Invest ...........................................................    17
Use of Proceeds ..........................................................    18
Compensation to Advisor and Affiliates ...................................    19
Conflicts of Interest ....................................................    21
Distributions ............................................................    23
Capitalization ...........................................................    25
Selected Financial Data ..................................................    26
Management's Discussion and Analysis of Financial Condition and Results of
   Operations ............................................................    27
Our Business .............................................................    32
Management ...............................................................    49
Executive Compensation and Equity Compensation Plans; Director
   Compensation ..........................................................    52
Security Ownership of Certain Beneficial Owners and Management and Related
   Stockholder Matters ...................................................    53
Certain Relationships and Related Transactions and Director
   Independence ..........................................................    54
The Advisor and Our Advisory Agreement ...................................    55
Material Federal Income Tax Consequences Associated with the
   Certificates ..........................................................    57
Qualification as a REIT for Federal Income Tax Purposes ..................    58
ERISA Considerations .....................................................    59
Description of Capital Stock .............................................    60
Description of the Certificates ..........................................    61
Summary of the Organizational Documents ..................................    67
Plan of Distribution .....................................................    70
Commission Position on Indemnification for Securities Act Liabilities ....    72
Legal Matters ............................................................    72
Experts ..................................................................    72
Additional Information ...................................................    72
Index to Financial Statements ............................................   F-1

Until [______ __, 200_],  all dealers  effecting  transactions in the securities
offered by this prospectus, whether or not participating in the offering, may be
required  to deliver a  prospectus.  Dealers  may also be  required to deliver a
prospectus  when  acting as  underwriters  and for their  unsold  allotments  or
subscriptions.

================================================================================

================================================================================

                                 American Church
                                Mortgage Company

                                     [LOGO]

                  $20,000,000 of Series C Investor Certificates

                                ----------------

                                   PROSPECTUS

                                ----------------

                         American Investors Group, Inc.


                                 March 25, 2009


================================================================================

<PAGE>

                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 31. Other Expenses of Issuance and Distribution.

      Item                                              Estimated Cost
      ----                                              --------------
      SEC Registration Fee ..........................   $          786
      FINRA Filing Fee ..............................   $        2,500
      Blue Sky Qualification Fees and Expenses* .....   $       15,000
      Underwriter's Expense Allowance** .............   $      120,000
      Printing and Engraving* .......................   $        2,000
      Legal Fees and Expenses* ......................   $       50,000
      Accounting Fees and Expenses* .................   $       12,000
                                                        --------------
         Total ......................................   $      202,286
                                                        ==============

       *    Estimated

      **    Assumes sale of all securities offered

Item 32. Sales to Special Parties.

      None.

Item 33. Recent Sales of Unregistered Securities.

      None.

Item 34. Indemnification of Directors and Officers.

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

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

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

                                      II-1

<PAGE>

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

Item 35. Treatment of Proceeds From Stock Being Registered.

      None.

Item 36. Financial Statements and Exhibits.

      (a) Financial Statements:


      Audited Financial Statements
      Report of Independent Registered Public Accounting Firm
      Balance Sheets as of December 31, 2007 and 2006
      Statements  of  Operations  for the fiscal  years ended  December 31, 2007
      (Restated) and 2006 (Restated)
      Statements of Stockholders' Equity for the fiscal years ended December 31,
      2007 and 2006
      Statements of Cash Flows for the fiscal years ended  December 31, 2007 and
      2006
      Notes to Financial Statements

      Unaudited Interim Financial Statements
      Condensed Balance Sheets as of September 30, 2008 and December 31, 2007
      Condensed  Statements  of  Operations  for the  nine-month  periods  ended
      September 30, 2008 (Restated) and 2007 (Restated)
      Condensed  Statements  of Cash  Flows  for the  nine-month  periods  ended
      September 30, 2008 and 2007
      Notes to Unaudited Condensed Financial Statements


      (b) Exhibits:

                  See attached exhibit index.

Item 37. Undertakings.

The undersigned registrant hereby undertakes:

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

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

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

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

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

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

                                      II-2

<PAGE>

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

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

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

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

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

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

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

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

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

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

   6) Insofar as  indemnification  for liabilities  arising under the Securities
      Act of 1933 may be permitted to directors, officers or controlling persons
      of the registrant pursuant to the foregoing provisions,  or otherwise, the
      registrant  has  been  advised  that  in  the  opinion  of  the  SEC  such
      indemnification  is against  public policy as expressed in the  Securities
      Act  of  1933  and  is,   therefore,   unenforceable.   If  a  claim   for
      indemnification  against such  liabilities  (other than the payment by the
      registrant  of  expenses  incurred  or  paid  by a  director,  officer  or
      controlling  person of the  registrant  in the  successful  defense of any
      action,  suit or  proceeding)  is  asserted by such  director,  officer or
      controlling person in

                                      II-3

<PAGE>

      connection  with the securities  being  registered,  the registrant  will,
      unless in the  opinion  of its  counsel  the  matter  has been  settled by
      controlling precedent,  submit to a court of appropriate  jurisdiction the
      question  whether such  indemnification  by it is against public policy as
      expressed in the  Securities Act of 1933 and will be governed by the final
      adjudication of such issue.

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

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

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

                                   SIGNATURES


      Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing on Form  S-11 and has duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the city of Minnetonka, state of Minnesota, on March 25, 2009.


                                        AMERICAN CHURCH MORTGAGE COMPANY

                                        By  /s/ Philip J. Myers
                                          ----------------------------------
                                            Philip J. Myers, President,
                                            Chief Executive Officer and
                                            Chief Financial Officer

                                      II-4

<PAGE>

                                POWER OF ATTORNEY

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


                                        Director, President,
                                      Secretary and Treasurer
                                   (principal executive officer;
                                      principal financial and
   /s/ Philip J. Myers                   accounting officer       March 25, 2009
---------------------------------
Philip J. Myers

   /s/ Kirbyjon H. Caldwell*                  Director            March 25, 2009
---------------------------------
Kirbyjon H. Caldwell

   /s/ Dennis J. Doyle*                       Director            March 25, 2009
---------------------------------
Dennis J. Doyle

   /s/ Michael G. Holmquist*                  Director            March 25, 2009
---------------------------------
Michael G. Holmquist


*By Philip J. Myers and Scott J. Marquis, Attorneys-in-Fact

<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
No.       Title
-------   -----
<S>       <C>                                                                                        <C>
1.1       Form of Distribution  Agreement by and between the Company and American Investors Group,
          Inc.                                                                                       1

1.2       Form of Soliciting Dealers Agreement                                                       1

3.1       Amended and Restated Articles of Incorporation                                             2

3.2       Third Amended and Restated Bylaws                                                          3

4.1       Form of Trust Indenture                                                                    1

5         Form of Opinion Letter of Winthrop & Weinstine, P.A. as to the legality of the
          securities                                                                                 1

8         Form of Opinion Letter of Winthrop & Weinstine, P.A. as to certain tax matters relating
          to the securities                                                                          1

10.1      Amended and Restated REIT Advisory  Agreement by and between the Company and Church Loan
          Advisory, Inc. dated January 22, 2004                                                      4

10.2      Form of Loan and Security Agreement by and between the Company and Beacon Bank             5

10.3      Form of Revolving Note                                                                     5

10.4      Form of Securities Account Control Agreement by and among the Company,  Herring Bank, as
          Trustee and Beacon Bank                                                                    5

10.5      Form of Security Agreement by and between the Company and Herring Bank, as Trustee         1

21        Subsidiaries of the Registrant                                                             1

23.1      Consent of Counsel (included in Exhibit 5 and 8)                                           1

23.2      Consent of Independent Registered Public Accounting Firm                                   1

25        Statement of Eligibility of Trustee                                                        1
</TABLE>

-----------------
(1)   Filed herewith.

(2)   Incorporated herein by reference to the Company's  Registration  Statement
      on Form 8-A filed April 30, 1999 (Commission File No. 000-25919).

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

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

(5)   Incorporated  herein by reference to the Company's  Current Report on Form
      8-K filed September 17, 2008.