Since the housing allowance may only be designated prospectively, and since it may be difficult to ascertain the actual costs of housing, utilities, etc. in a new living situation, many congregations designate the housing allowance for a period of six months at the beginning of a new settlement. The allowance may be reviewed and modified later when actual expenses may be more fully known. If excess housing allowance is paid to a minister, it must be reported as salary and is subject to federal and state income tax. Individual ownership has historically proven to be a good way to build home equity and, eventually, to provide a home for retirement. There are risks, of course.
Housing prices can go down as well as up.
Selling a home may take considerable time. Since most ministers now prefer home ownership, a congregation that does not require a minister to live in a parsonage may be more attractive to ministers seeking new settlements. Occasionally congregations may offer loans to ministers from endowment or other funds for purposes of a down payment. Equity sharing arrangements may also be mutually beneficial. We urge congregations and ministers to explore the matter of home ownership seriously and to work together on this issue.