There are three ways this can be accomplished:

1) The church purchases the home and sells it to the Pastor on land contract using the church assets as collateral. 100% financing is not unusual*.

2) The Pastor purchases a home through Conventional Financing. If the church cannot supply the down payment, it can be acquired from individuals (i.e. church members) with interest* and principal payments deferred, but interest accruing* until home can be refinanced (i.e. after five years when Pastor can afford larger mortgage payments).

3) A building program can be timely. More bonds can be sold or additional financing secured to be used as a loan to the Pastor for the purpose of buying his home.

*In the past loans in excess of $10,000 would require interest be assessed. However the IRS no longer requires interest be assessed for a pastor with less than $1,000 of investment income (interest, dividends, capital gains, etc.) on loans not exceeding $100,000 (IRC 7872(d)).   If the pastor has more than $999 of investment income, interest must be assessed on loans over $10,000.  You need an interest rate, which is equivalent to the federal discount rate.