What is Farmer Mac?


Farmer Mac stands for Federal Agricultural Mortgage Corporation. It’s a secondary market for rural mortgages and agricultural loans. Farmer Mac helps banks be able to handle the demands and risks brought forth by farmers and ranchers.

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What Does Farmer Mac Do?

Farmer Mac operates as a secondary market for those operating in rural America. Farmer Mac helps to connect rural homebuyers, farmers, and ranchers with low-cost credit whether to fund their farming business or to buy a home in a rural area.

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A few of the things Farmer Mac offers include:

  • Loans – Farmer Mac approves lenders to work in Farmer Mac’s name. These lenders can qualify borrowers for loans that meet Farmer Mac requirements. Farmer Mac then buys the loans from the lender, giving the lender access to their capital again, allowing them to write more loans to further enhance rural and farming areas.
  • Credit Protection – Farmer Mac approved lenders can choose to buy a purchase commitment. This one-time annual fee covers the lender for any Farmer Mac loans written and defaulted on. If the borrower defaults, Farmer Mac promises to buy the loan from the lender.
  • AgriculturalMortgage Backed Securities – Lenders can choose to have Farmer Mac buy a group of loans from them, giving the lender liquidity or opt to have credit protection. The credit protection insures that the lender won’t have to deal with any late or missed mortgage payments.
  • Custom solutions – Farmer Mac is open to other ways to help lenders succeed and to keep rural America thriving. They are willing to create a customized solution for any rural business need.

Farmer Mac wants to be known as the go-to partner in rural areas. They want banks to partner with them so that they can extend more credit to rural buyers, farmers, and ranchers. Farmer Mac benefits rural homeowners as well as farm business owners. Farmer Mac will guarantee loans or purchase them outright, in order to keep the rural community thriving.

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