We were chartered by Congress in 1987 as a corporate instrumentality of the United States.

The President of the United States appoints five of our fifteen Board members, including the Chairman of the Board.

We have the ability to borrow up to $1.5 billion from the U.S. Treasury to fulfill our guarantee obligations.

We are regulated by the Farm Credit Administration (FCA), an independent agency in the executive branch of the United States government.

The U.S. Congress has oversight over Farmer Mac through the following Congressional committees: Senate Committee on Agriculture, Nutrition and Forestry; House Committee on Agriculture; House Committee on Financial Services.

The United States Federal Reserve Bank (the central bank of the U.S.) serves as our depositary and fiscal agent, and we have access to the book-entry system of the Federal Reserve System.

We are subject to periodic reviews by the U.S. Government Accountability Office (GAO).

Farmer Mac has a 15-member Board of Directors. Five of the 15 members are appointed by the President of the United States with the advice and consent of the Senate and serve at the pleasure of the President with no defined term. No more than three of the appointed members can be from any one political party. An additional five Board members are elected by the financial institutions who own Class A voting common stock. Five Board members are also elected by the Farm Credit System institutions who own Class B voting common stock. The ten elected directors serve for one year terms, but can be re-elected each year with no limit on the number of terms served.

Farmer Mac offers debt securities of various maturities in the public capital markets through a network of over 20 dealers who are listed separately on this web site. The debt securities issued by Farmer Mac include discount notes and fixed and floating rate medium-term notes, including callable notes. The proceeds from these securities are used to fund Farmer Mac’s activities, including the purchases of loans from approved Farmer Mac Seller/Servicers.

Although Farmer Mac was created by the U.S. Congress and is regulated by an independent agency in the executive branch of the U.S. government, the U.S. government does not guarantee payments due on Farmer Mac’s guaranteed securities, debt or equity securities, dividend payments on preferred or common stock, or profitability.

As a corporation chartered by Congress to serve a public purpose, Farmer Mac’s debt and guaranteed securities carry a 20 percent capital risk weighting for many federally-regulated entities.

Farmer Mac is regulated by the Farm Credit Administration (FCA), an independent agency in the executive branch of the U.S. government. FCA, acting through the Office of Secondary Market Oversight (OSMO), has general regulatory and enforcement authority over Farmer Mac and is responsible for an annual safety and soundness examination of Farmer Mac. Farmer Mac is required to file quarterly reports on its financial condition with FCA and is also required to comply with the periodic reporting requirements of the Securities Exchange Act of 1934.

The primary purpose of our investment portfolio is to provide liquidity in the event that we are unable to access the capital markets. Our federal charter authorizes us to maintain reasonable amounts of liquid investments for business operations, including adequate liquidity. Additionally, FCA regulations require us to maintain sufficient liquid investments to provide at least 90 days of liquidity. We invest in assets that both comply with FCA regulations and are in accordance with policies established by our Board, including dollar amount, issuer concentration and credit quality limitations.

Farmer Mac funds its loan purchases by issuing liabilities that have similar interest rate characteristics. By Board policy, the expected duration of the assets and liabilities is kept to a narrow gap which is reported on a quarterly basis. Because of the small duration gap, Farmer Mac believes that changes in interest rates should not have a significant impact on future earnings related to its current balance sheet.

Farmer Mac is required by its charter to maintain capital equal to the greater of the statutory minimum capital requirement or the risk-based capital requirement. The statutory minimum capital requirement is calculated based on 2.75 percent of on-balance sheet assets plus 0.75 percent of off-balance sheet obligations. The risk-based capital requirement is a calculation prescribed by FCA that determines the capital necessary for Farmer Mac to maintain positive capital during 10 years of sustained defaults and losses plus severe interest rate shocks. Historically, the minimum capital requirement has always been the higher of the two requirements. The amount of capital held by Farmer Mac that is greater than the capital requirement is deemed to be the capital surplus.

The Farm Credit System (FCS) is a nationwide network of borrower-owned lending institutions and specialized service organizations. The FCS, like Farmer Mac, is regulated by the Farm Credit Administration. Farmer Mac is designated by statute as an FCS institution but is different from other FCS institutions in several respects. In general, most FCS institutions are primary lenders to farmers and ranchers and other borrowers in rural America. 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. Also, Farmer Mac is a stockholder-owned company while the other FCS institutions are organized as cooperatives. Although Farmer Mac is an FCS institution, it is not liable for any debt or obligation of any other FCS institution. Likewise, no other FCS institution is liable for any debt or obligation of Farmer Mac.

Farmer Mac has developed strong credit and appraisal standards to determine the eligibility of assets for its programs. With regard to our agricultural program assets, Farmer Mac only buys first mortgage loans on agricultural farmland, with the exception of our USDA-guaranteed loans in the Farmer Mac II program. In addition, Farmer Mac lends on a highly diversified portfolio of over 135 individual agricultural commodities. Finally, with regard to Rural Utilities, Farmer Mac benefits from the strong credit history of rural electric cooperatives. Farmer Mac has never had a credit loss on its Farmer Mac II program or its Rural Utilities program.

Farmer Mac has four different business segments ─ Farm & Ranch, USDA Guarantees, Rural Utilities, and Institutional Credit.

The first and largest is the Farm & Ranch program. Under this program, Farmer Mac operates a secondary market for mortgage loans on agricultural real estate. To be eligible, a loan must be secured by a first lien on agricultural property within the United States. The maximum original loan-to-value (LTV) on such loans is generally 70 percent. In addition, under the Farm & Ranch program, Farmer Mac may offer credit enhancement alternatives to financial institutions. This is generally done through Purchase Commitments or guarantees of agricultural mortgage-backed securities (AMBS) that represent interests in the underlying qualified loans. 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). The loans in the pools underlying LTSPCs or AMBS must meet Farmer Mac’s standards at the time of commitment or guarantee. Under the Farm & Ranch Program, Farmer Mac also purchases or guarantees AgVantage securities which represent secured debt obligations of agricultural lenders. These AgVantage securities are over-collateralized by eligible agricultural loans that must be current with respect to principal and interest payments. Farmer Mac has never experienced a delinquency or credit loss in its AgVantage securities.

The second business segment is the Farmer Mac 2 USDA Guaranteed Loan Program. Under this program Farmer Mac’s subsidiary, Farmer Mac 2, purchases in the secondary market, the USDA-guaranteed portion of private sector loans from an originating lender. Loan collateral for such loans includes farm real estate, farm equipment, rural business assets and community facilities. To date, Farmer Mac has never incurred a credit loss in the Farmer Mac 2 Program.

The third business segment is the Rural Utilities program. Under this program, Farmer Mac buys rural utility loans which are originated by a rural utility cooperative. Farmer Mac also issues AgVantage securities under the Rural Utilities program, where we purchase or guarantee obligations of rural utility cooperative lenders that are secured by eligible rural utility loans. Farmer Mac has never experienced a credit loss in its Rural Utilities program.

Under the fourth business segment, Institutional Credit, Farmer Mac purchases or guarantees general obligations of lenders that are secured by pools of the types of loans eligible for purchase under Farmer Mac’s Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business. AgVantage® is a registered trademark of Farmer Mac used to designate Farmer Mac’s guarantees of securities related to these general obligations of lenders that are secured by pools of eligible loans and that comprise the Institutional Credit line of business.