BISMARCK, N.D. (5/9/13)--Midwest Business Solutions is now a direct seller of loans to Farmer Mac, said MBS President/CEO Phil Love, in a column in the Credit Union Association of the Dakotas' newsletter.
Farmer Mac offers fixed- and variable-rate financing on farm land, ranch land and farm facilities (The Memo May 8).
Leased farm ground may also be eligible. Variable rates can fluctuate monthly, or on a one-, three-, five-, 10-, 7/1- or 10/1-year basis. Fixed rates can be locked up to 25 years. Amortizations on loans can run up to 30 years, Love said.
The property must be involved in production of an eligible commodity listed by the U.S. Department of Agriculture and must have at least $5,000 of annual gross agricultural sales.
Farmer Mac also offers an AgEquity Line of Credit that gives a farmer a five- or 10-year draw period followed by a repayment period of up to another 25 years. The payments during the revolving-draw period are interest only and will fluctuate monthly, Love wrote.
Mortgage amounts are typically up to $11 million, and the maximum loan request for any borrower is up to $30 million. Payments can be set up monthly, semi-annually or annually.
Because the loans are sold on the secondary market, they represent no risk to credit unions, he said. Credit unions that have agricultural loans on their books, may find the product valuable to manage balance-sheet exposure.
Credit unions can earn income at origination and earn servicing income throughout the life of the loan, although the loan is not on the credit union's books, he added.