The Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, is a stockholder-owned, federally chartered corporation created by Congress to improve the availability of long-term credit for America’s farmers, ranchers, rural utilities, businesses and communities.
Farmer Mac accomplishes this public policy mission by providing a secondary market for qualified agricultural mortgage loans, rural utilities loans (made by cooperative lenders) and the guaranteed portions of agricultural and rural development loans guaranteed by the United States Department of Agriculture.
Farmer Mac's main secondary market activities, which provide liquidity and lending capacity to lenders, are:
- Purchasing eligible loans directly from lenders;
- Providing advances against eligible loans by purchasing obligations secured by those loans;
- Securitizing assets and guaranteeing the payment of principal and interest on the resulting securities that represent interests in, or obligations secured by, pools of eligible loans; and
- Issuing long-term standby purchase commitments ("LTSPCs") for eligible loans.
Farmer Mac conducts these activities through the following lines of business – Farm & Ranch, USDA Guarantees, and Rural Utilities:
- Under the Farm & Ranch line of business, Farmer Mac purchases or commits to purchase agricultural mortgage loans or securities backed by agricultural mortgage loans. To be eligible for the Farm & Ranch line of business, loans must meet Farmer Mac’s credit underwriting, collateral valuation, documentation and loan servicing requirements. Eligible collateral includes agricultural real estate that is used for the production of one or more agricultural commodities or products (and may be improved by permanently affixed structures such as facilities and residences).
- Under the USDA Guarantees line of business, Farmer Mac's subsidiary, Farmer Mac II LLC, purchases the guaranteed portions of loans guaranteed by the United States Department of Agriculture. These eligible USDA-guaranteed portions of loans include Farm Service Agency Guaranteed Farm Ownership, Operating (Term), and Conservation loans and Rural Development Business and Industry and Community Facility Guaranteed loans.
- Under the Rural Utilities line of business, Farmer Mac purchases or commits to purchase, qualified rural utilities loans, or guarantees the timely payment of interest and principal of securities representing interests in or obligations backed by pools of such loans.
Farmer Mac’s lines of business provide participants with an efficient and competitive secondary market that enhances the participants’ ability to offer eligible loans to farmers, ranchers and to rural utilities, communities and businesses.
Please refer to the most recent Farmer Mac Annual Report for a more complete description.