The
following
table
is
a
reconciliation
of
assets
in
which
significant
unobservable
inputs
(Level
3)
were
used
in
determining
fair
value
for
Church
Loan
and
Income
Fund as
discussed
in
the
Notes
to
Schedule
of
Investments.
*
Includes
the
change
in
net
unrealized
appreciation/(depreciation)
on
level
3
securities
held
on
December
31,
2020 of
$834,301.
#
Transferred
from
Level
2
to
Level
3
because
of
a
lack
of
observable
market
data,
resulting
from
a
decrease
in
market
activity
for
the
securities.
@
Transferred
from
level
3
to
Level
2
because
observable
market
data
became
available
for
the
securities.
The
reporting
entity's
Church
Loan
level
3
securities’
fair
value
is
calculated
by
a
vendor
using
a
market
approach
with
a
discounted
cash
flow
model
based
on
the
established
policies
and
procedures
of
the
reporting
entity.
Inputs
used
in
valuation
include
the
principal
and
interest
schedules,
bond
equivalent
ratings,
loan
transaction
spreads
with
a
range
of
0.03%
to
2.61%
(weighted
average
of
1.04%),
U.S.
Treasury
yields,
and
corporate
credit
curve
yields
with
a
range
of
0.12%
to
2.84%
(weighted
average
of
1.04%).
Unobservable
inputs
were
weighted
by
the
rela-
a
All
Mortgagees
have
the
right
to
repay
the
loan
at
any
time. The
Loans
are
generally
considered
to
be
illiquid
due
to
the
limited,
if
any,
secondary
market.
b
Security
is
valued
using
significant
unobservable
inputs.
Further
information
on
valuation
can
be
found
in
the
Notes
to
Financial
Statements.
c
Denotes
an
interest
only
loan. Interest
only
loans
represent
the
right
to
receive
monthly
interest
payments
on
an
underlying
loan
position
beginning
on
a
specified
date
for
an
agreed
upon
period. The
outstanding
principal
amount
shown
is
the
outstanding
principal
balance
as
of
the
end
of
the
period.
d
Denotes
investments
purchased
on
a
when-issued
or
delayed
delivery
basis.
e
The
interest
rate
shown
reflects
the
seven
day
yield
as
of
the
end
of
the
period.
Unrealized
Appreciation
(Depreciation)
Gross
unrealized
appreciation
and
depreciation
of
investments
of
the
portfolio
as
a
whole
(including
derivatives,
if
any),
based
on
cost
for
federal
income
tax
purposes,
were
as
follows:
Gross
unrealized
appreciation
$1,578,872
Gross
unrealized
depreciation
(10,735)
Net
unrealized
appreciation
(depreciation)
$1,568,137
Cost
for
federal
income
tax
purposes
$41,556,585
Fair
Valuation
Measurements
The
following
table
is
a
summary
of
the
inputs
used
as
of
December
31,
2020,
in
valuing
Church
Loan
and
Income
Fund's
assets
carried
at
fair
value.
Investments
in
Securities
Total
Level
1
Level
2
Level
3
Church
Loans
$26,941,616
$–
$–
$26,941,616
Long-Term
Fixed
Income
Mortgage-Backed
Securities
7,855,546
–
7,855,546
–
Short-Term
Investments
6,099,964
–
6,099,964
–
Subtotal
Investments
in
Securities
$40,897,126
$–
$13,955,510
$26,941,616
Other
Investments *
Total
Affiliated
Short-Term
Investments
2,227,596
Subtotal
Other
Investments
$2,227,596
Total
Investments
at
Value
$43,124,722
*
Certain
investments
are
measured
at
fair
value
using
a
net
asset
value
per
share
that
is
not
publicly
available
(practical
expedient). According
to
disclosure
requirements
of
Accounting
Standards
Codification
(ASC)
820,
Fair
Value
Measurement,
securities
valued
using
the
practical
expedient
are
not
classified
in
the
fair
value
hierarchy. The
fair
value
amounts
presented
in
this
table
are
intended
to
permit
reconciliation
of
the
fair
value
hierarchy
to
the
amounts
presented
in
the
Statement
of
Assets
and
Liabilities.
Investments
in
Securities
Beginning
Value
3/31/2020
Realized
Gain/
(Loss)
Change
in
Unrealized
Appreciation/
(Depreciation)*
Purchases
Sales /
Paydowns
Transfers
Into
Level
3
#
Transfers
Out
of
Level
3
@
Ending
Value
12/31/2020
Church
Loans
20,928,020
-
834,301
6,403,302
(1,224,007)
-
-
26,941,616
Total
$20,928,020
$-
$834,301
$6,403,302
($1,224,007)
$-
$-
$26,941,616