Lenders >> Farmer Mac II Program >> Reference Guide
Lender Access Program
Description		 Products Reference Guide Historical COFI Rates  
Introduction to Selling USDA Guaranteed Loans Farmer Mac II Sale Agreement
Remittance Procedures Other Program Information and Forms
Farmer Mac II Program Administrator Samples Settlement Documentation
for FSA and RD Loan Sales

The Federal Agricultural Mortgage Corporation ("Farmer Mac") has established a secondary market for the guaranteed portions of USDA-Farm Service Agency ("FSA") guaranteed Farm Ownership (FO) and Operating Loans (OL) and USDA-Rural Development (RD) guaranteed Business and Industry (B&I) and Community Facility (CF) loans. The market, known as "Farmer Mac II" is open continuously, permitting lenders to sell FSA and RD guaranteed portions quickly and efficiently on predictable and competitive terms.

Under the Farmer Mac II program, Farmer Mac buys guaranteed portions directly from lenders. The original lenders retain the unguranteed portions of these loans and continue to service the entire loan, according to the terms of the FSA and RD programs.

As of January 1, 2009, Farmer Mac has purchased approximately $2.5 billion in FSA and RD guaranteed portions from 800 lenders in 50 states.

Eligibility Criteria
Qualified Loans
  • Any FO, OL, B&I, or CF guaranteed loan is eligible for sale through Farmer Mac II. Line-of-Credit Guarantees are not currently eligible.
  • Farmer Mac accepts guaranteed portions as they are generated by the FSA and RD programs, without being involved in administering those programs. Lenders are encouraged to work closely with Farmer Mac in structuring and establishing the terms of new loans so that they can maximize the pricing benefits afforded by the secondary market.

    Qualified Lenders
  • Any lender who is qualified to make FSA/RD guaranteed loans.

    Qualified Borrowers
  • Any borrower who meets the lender’s as well as FSA/ RD’s criteria.

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    Loan Documentation and Term Structuring
    Required Documents (Single Note)
  • One original Loan Note Guarantee (FSA-2235, FSA-1980-27 or RD-4279-5)
  • One original Assignment of Guarantee (FSA-2242, FSA-1980-36 or RD-4279-6)
  • One copy of fully executed Promissory Note (and note amendments if applicable)
  • Two original Farmer Mac II Sale Agreements

    • Required Documents (Multi-Note)
  • One original Loan Note Guarantee (FSA-2235, FSA-1980-27 or RD-4279-5)
  • One original Assignment and Servicing Agreement
  • One original fully executed Promissory Note for the guaranteed portion
  • One copy of fully executed Promissory Note for the unguaranteed portion
  • Two original Farmer Mac II Sale Agreements

    • Recommended Loan Terms

    Loan structures and terms have a direct impact on the pricing received in the secondary market. The following are recommended loan terms/structures for optimum pricing:

    Variable Rates:
  • Farmer Mac 3-Month Cost of Funds Index Net Yield with calendar quarter rate adjustments; or
  • Wall Street Journal Prime Rate with calendar quarter rate adjustments.

    • Fixed/Adjustable Rates:
  • Various fixed rate terms and amortizations—see available Farmer Mac II Rate Line; or
  • 5, 10 or 15-year resets with acceptable amortizations ranging from 15 to 30 years. Loans are tied to either the Farmer Mac 5, 10 or 15-Year Reset Cost of Funds Index (COFI) Net Yield.

    • Payment Options and Dates:
  • Annual – January 1, April 1, July 1, or October 1
  • Semi-annual – January 1 & July 1, or April 1 & October 1
  • Quarterly – January 1, April 1, July 1, or October 1
  • Monthly – 1st day of each month

    • Interest Calculation:
  • Preferred accrual basis is Actual over 365 days

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    Rate Locks
    The Farmer Mac II cash window is open Monday through Friday from 10:00 a.m.– 3:00 p.m. eastern time for rate locks. Promissory Notes to be rate locked must be faxed to Farmer Mac (fax # 202-872-7713) prior to rate lock. Once the rate lock is complete, Farmer Mac will fax or email a Commitment to Purchase Confirmation to the Lender outlining the terms of the rate lock.

    Note: Farmer Mac must receive verbal confirmation during this window of time whether the Lender wishes to rate lock at the current rate or not. If verbal confirmation is not available, Farmer Mac will not perform the rate lock.
    How to Sell a Guaranteed Portion
    STEP 1:  Obtain executed Assignment of Guarantee (FSA-2242, FSA-1980-36 or RD-4279-6) from your local FSA or RD office.
    STEP 2:  Complete and assemble the following required documents:
    STEP 3:  Submit assembled documents to:

    By Overnight Mail
    Colson Services Corp.
    Farmer Mac II Program
    101 Barclay Street
    8th Floor East
    New York, NY 10286
    Phone: (212) 815-4125
    By U.S. Mail
    Colson Services Corp.
    Farmer Mac II Program
    P.O. Box 916
    Bowling Green Station
    New York, NY 10274-0916

    (Documents should be remitted at least one week prior to anticipated settlement date.)
    STEP 4: Loan pricing occurs on the Wednesday prior to settlement (if price not previously agreed to via rate lock prior to Step 1).

    STEP 5: Proceeds for guaranteed portions purchased are wired to sellers on Thursday, which is the weekly settlement date.

    Farmer Mac Contact Information
    Name Phone Email Address
    Patrick Kerrigan 800-879-3276, ext. 5560 patrick_kerrigan@farmermac.com
    Warren McCulloch 800-879-3276, ext. 5688 warren_mcculloch@farmermac.com
    Larry Jones 800-879-3276, ext. 6604 larry_jones@farmermac.com
    Judy Moye 800-879-3276, ext. 5544 judy_moye@farmermac.com
    Fax: 202-872-7713
    Farmer Mac
    1133 21st Street, N.W.
    Suite 600
    Washington, D.C. 20036