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Farmer Mac is America's secondary market for first mortgage agricultural
real estate loans. Farmer Mac was created by Congress to improve the ability of
agricultural lenders to provide credit to America's farmers, ranchers and rural
homeowners, businesses and communities. We do this primarily by purchasing
qualified loans from lenders, thereby replenishing their source of funds to
make new loans. Farmer Mac funds its loan purchases by issuing debt or
securities backed by pools of loans and selling them into the capital markets.
In so doing, Farmer Mac facilitates the flow of lendable money from Wall Street
to rural America, thus providing a stable supply of mortgage credit to lenders
and borrowers.
In the Farmer Mac I Program
, Farmer Mac purchases qualified loans from lenders who are approved sellers,
thereby replenishing their source of funds to make new loans. Farmer Mac meets
lenders unique needs through structures that shift the credit risk to Farmer
Mac while leaving the loans with the originating institution.
In the Farmer Mac II Program, Farmer Mac provides secondary market
funding to support USDA guaranteed loans. Through Farmer Mac II, lenders sell
the guaranteed portions of USDA loans directly to Farmer Mac. Farmer Mac buys
the guaranteed portions at attractive rates, which allows agricultural lenders
to increase profits and to provide better services to their borrowers and
communities.
The Farmer Mac III Program option combines both Farmer Mac I and II by
purchasing first-lien mortgage loans that are senior to loans guaranteed via
state or federal programs.
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