Most importantly, anything the church provides to the pastor in return for their services must be included in their taxable income and reported as wages, even if the money is paid directly to the mortgage lender. It must be included as wages in box 1 of the pastor's W-2, and the pastor must pay income tax and self-employment tax on the money.
The church can offer the pastor part of their compensation as a housing allowance. If you don't know about this, you need to so some research. I recommend this guide, and other resources on this web site, your denomination may already be a member of ECFA and if not, a personal membership for the pastor and church treasurer is well worth it.
https://www.ecfa.org/PDF/Ministers_Taxes_Made_Easy_2020.pdf
The church can provide the pastor a housing allowance in lieu of a parsonage. The housing allowance is excluded from income tax (it is not taxable wages) although it is still subject to self-employment tax. A housing allowance must be designated in advance and in writing by the church, it can't be retroactive. The pastor's total compensation (wages plus housing allowance) can't be more than "fair compensation" for their work, although this is pretty nebulous. The housing allowance also can't be more than the fair rental value of the pastor's home -- what a real estate agent would charge to rent the same or similar home in the same condition in the same neighborhood.
The housing allowance can't be used to pay for the pastor's house in a lump sum, but it may be used over time.
For example, suppose your pastor's pay package does not currently include a housing allowance, and the fair market rental value of the pastor's home would be $2000/month. You could increase the pastor's pay by $2000/month effective Feb 1 (remember, the housing allowance must be designated in advance and in writing). The pastor can spend or save that money in any manner they choose. The housing allowance is subject to 15% self-employment tax but is excluded from income tax. At the end of 3-4 years, you would have paid out the value of the mortgage. Whether the pastor used it in that manner is up to him or her; presumably a responsible pastor who understands the concept of Stewardship would either pay off their house or invest the money in some other useful way.
And in fact, the pastor's compensation can include a housing allowance at the FMV rental rate even if the house is fully paid off, since the housing allowance represents the rental value of a parsonage provided to the pastor. You can continue to pay a housing allowance even after the mortgage is paid. Or, once the $70K is paid out, you can reduce the pastor's salary, but still designate part as a housing allowance. (In other words, if the pastor's salary is $4000 per month and you want to add $2000 per month for 3 years to pay off the house, in the 4th year you could reduce the salary and pay compensation as $2000/month wages plus $2000/month housing allowance. That will substantially reduce the pastor's income tax.)
You can't pay the housing allowance in advance, if the FMV rental is $2000/month for that house, you must pay it as $2000/month. You can't pay $80,000 lump sum and say "that's 40 months in advance."
https://www.ecfa.org/Documents/HousingForYourPastor.pdf
https://www.ecfa.org/ProductDownload.aspx?ProductID=98
https://www.irs.gov/forms-pubs/about-publication-517
