FARMER MAC LENDERS MAC
Under the Farm & Ranch Program, Farmer Mac also purchases or guarantees AgVantage securities which represent secured debt obligations of agricultural lenders. The loans in the pools underlying LTSPCs or AMBS must meet Farmer Mac’s standards at the time of commitment or guarantee. Under LTSPCs, Farmer Mac agrees to purchase eligible loans from an identified pool of loans, if any such loans become seriously delinquent (three or four months). This is generally done through Purchase Commitments or guarantees of agricultural mortgage-backed securities (AMBS) that represent interests in the underlying qualified loans. In addition, under the Farm & Ranch program, Farmer Mac may offer credit enhancement alternatives to financial institutions. The maximum original loan-to-value (LTV) on such loans is generally 70 percent. To be eligible, a loan must be secured by a first lien on agricultural property within the United States. Under this program, Farmer Mac operates a secondary market for mortgage loans on agricultural real estate. The first and largest is the Farm & Ranch program. Likewise, no other FCS institution is liable for any debt or obligation of Farmer Mac.įarmer Mac has four different business segments ─ Farm & Ranch, USDA Guarantees, Rural Utilities, and Institutional Credit. Although Farmer Mac is an FCS institution, it is not liable for any debt or obligation of any other FCS institution.
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Also, Farmer Mac is a stockholder-owned company while the other FCS institutions are organized as cooperatives. In contrast, Farmer Mac serves as a secondary market for lenders that extend credit in rural America which provides rural borrowers with greater access to product innovation and competitive pricing through originating lenders that utilize Farmer Mac. In general, most FCS institutions are primary lenders to farmers and ranchers and other borrowers in rural America.
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Farmer Mac is designated by statute as an FCS institution but is different from other FCS institutions in several respects. The FCS, like Farmer Mac, is regulated by the Farm Credit Administration. The Farm Credit System (FCS) is a nationwide network of borrower-owned lending institutions and specialized service organizations.