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Farmer Mac is America’s secondary market for first
mortgage agricultural real estate loans. Farmer Mac is the nickname for the
Federal Agricultural Mortgage Corporation, a quasi-government agency created by
the Agricultural Credit Act of 1987. Congress created Farmer Mac to improve the
availability of mortgage credit to America’s farmers, ranchers and rural
homeowners, businesses and communities. Farmer Mac does this primarily by
purchasing qualified loans from lenders.
Farmer Mac classifies borrowers as either “Choice” or “Standard” and different
interest rates apply. Following is the normal underwriting criteria for Choice
vs. Standard loans:
| |
Choice |
Standard |
| Debt-to-Asset Ratio |
<=40% |
<=50% |
| Current Ratio |
>=1.25:1 |
>=1:1 |
| Total Debt Coverage Ratio |
>=1.50:1 |
>=1.25:1 |
| Property Debt Coverage Ratio |
>=1.00:1 |
>=1:1 |
| Loan-to-Value Ratio, loans
<=$2.6M |
<=60%
|
<=70% |
| Loan-to-Value Ratio, loans >
$2.6M |
<=55% |
<=60% |
| Minimum Loan Size |
$350,000 |
$100,000 |
There are a wide range of terms and conditions associated with Farmer Mac loans.
Your loan officer will be happy to discuss them with you if this type of program
is in your future.
For more
information on Farmer Mac programs, call us or visit their website at
www.farmermac.com. |
