Lender Access Program Description Products Reference Guide Historical COFI Rates   The Farmer Mac II program is a streamlined version of the Farmer Mac I ag real estate program, specifically authorized by Congress to establish a uniform national secondary market for originators and investors using the USDA guaranteed loan programs. In Farmer Mac II, interested lenders sell the guaranteed portions of USDA loans directly to Farmer Mac. Eligible loans include Farm Service Agency’s Farm Ownership and Farm Operating guaranteed loans, as well as Rural Development’s Business & Industry and Community Facility guaranteed loans. Farmer Mac II accepts the quality of the USDA guarantee as a surrogate for Farmer Mac I underwriting, appraisal, and diversification standards. Farmer Mac II Seller Eligibility Requirements Any lender, or other seller of guaranteed portions, may participate in this program and need not be a Farmer Mac stockholder. All that is required is that the lenders make USDA guaranteed loans in accordance with existing standards and procedures. Farmer Mac does not prescribe any standards or procedures for the extension of USDA credit. Lender Servicing Lenders retain all servicing responsibilities on the guaranteed portion they sell into the Farmer Mac II program and receive fees for their ongoing efforts. In the Farmer Mac II program, the lender takes on payment remittance responsibilities typical of other sales of guaranteed portions to third parties. Farmer Mac Purchases Lenders participating in the Farmer Mac II program sell the guaranteed portions of USDA loans directly to Farmer Mac and retain the unguaranteed portions of those loans in accordance with the terms of the existing USDA guaranteed loan programs. Farmer Mac maintains a continuous “buy side” in the market, ready to purchase saleable portions of performing loans from any lender or holder on efficient, predictable terms. Daily, Farmer Mac “posts” current indicative Net Yields in the Farmer Mac II Rate Line. Lenders who wish to receive the weekly Rate Line may do so by contacting Farmer Mac. USDA guaranteed portions can be sold to Farmer Mac regardless of their age, as long as they are not delinquent and the lender has no actual or constructive knowledge of any impending delinquency or default and does not anticipate pay off, liquidation, or delinquency within the next 12 months. Cash Sale versus Swap The lender has the option to sell the guaranteed portions for cash (“Cash Sale”) or to receive a Farmer Mac guaranteed security in the “Swap” program. In a Cash Sale, the USDA guaranteed portions are purchased individually or placed in a pool. Farmer Mac funds the purchase of the guaranteed portions with the issuance of debt obligations or loan-backed securities, that are purchased by capital market investors. Securities issued to the lender in a Swap will be backed by the USDA guaranteed portions which were delivered to Farmer Mac plus Farmer Mac’s own guarantee of timely payment of principal and interest due on the underlying guaranteed portions. Under either method, the lender will remain the mortgagee of record and will continue to service the guaranteed loan in accordance with USDA procedures. Program Benefits Participation in the Farmer Mac II program affords lenders ready access to competitive funding rates that Farmer Mac obtains in the capital markets on its debt obligations. The benefits of capital market pricing on Farmer Mac debt are passed through to participating lenders. Many lenders in the Farmer Mac II program, in turn, pass those benefits on to borrowers in the form of longer term rates, lower rates, or both. In addition, the Farmer Mac II program allows lenders to: Build customer relationships by offering borrowers a wide variety of competitively priced loan products. Enhance ROA through greater servicing fee income. Increase the liquidity of their guaranteed loan portfolios enabling them to re-lend to new borrowers. Minimize interest rate risk while still offering borrowers intermediate and long-term fixed rate loans.