Federal Agricultural Mortgage Corporation

This article is about Farmer Mac in the United States. For other uses, see Agricultural Mortgage Corporation (disambiguation).

Federal Agricultural Mortgage Corporation

Trade name	Farmer Mac
Traded as	NYSE: AGM NYSE: AGM.A Russell 2000 Component (AGM)
Headquarters	2100 Pennsylvania Ave NW Ste 450N, Washington, D.C. , United States of America
Website	www.farmermac.com

The Federal Agricultural Mortgage Corporation, also known as Farmer Mac, is a stockholder-owned, federally chartered corporation established by the U.S. Congress in 1988 under the Agricultural Credit Act of 1987. It was created to establish a secondary market for agricultural real estate and housing mortgage loans, to increase liquidity and the availability of long-term, stable credit for farmers, ranchers, and rural communities.

Farmer Mac operates by purchasing eligible loans from agricultural and rural infrastructure lenders, guaranteeing securities backed by those loans, and providing loan funding and risk management solutions to rural financing institutions. This structure allows lenders to replenish capital and continue issuing loans, thereby contributing to liquidity in the agricultural and rural infrastructure sectors. Over time, its statutory authority has expanded to include loans for rural utilities, renewable energy, and other infrastructure projects.

Regulated by the Farm Credit Administration, Farmer Mac is one of the government-sponsored enterprises (GSEs) tasked with supporting targeted credit markets. According to the Congressional Research Service, the creation of Farmer Mac was intended to stabilize rural credit markets and attract investment into agriculture through securitization and secondary market mechanisms.

Farmer Mac supports a wide range of markets, including agriculture, agribusiness, rural broadband, power and utilities, and infrastructure financing, with the aim of enhancing the availability of long-term credit and providing greater liquidity and lending capacity for lenders to agriculture and infrastructure borrowers.

History

It was created by the Agricultural Credit Act of 1987 (Pub. L. 100–233) as a federally chartered, private corporation responsible for guaranteeing the timely repayment of principal and interest to investors in a new agricultural secondary market. The secondary market allows a lending institution to sell a qualified farm real estate loan to an agricultural mortgage marketing facility, or pooler, which packages these loans, and sells to investors securities that are backed by, or represent interests in, the pooled loans. Farmer Mac guarantees the timely repayment of principal and interest on these securities and, under authorities granted in 1995, can also serve as a loan pooler.

The company was founded during a $4 billion bailout of the Farm Credit System, hoping to provide an alternative source of credit to farmers following the models of Fannie Mae and Ginnie Mae.

2008 financial crisis

In June 2008, during the 2008 financial crisis, Farmer Mac had $47.2 million invested in Fannie Mae shares. Over the next few months, during the Federal takeover of Fannie Mae and Freddie Mac, these investments lost about $44 million in value. The company also had significant investments in Lehman Brothers. In response, the Farm Credit System bailed the company out by purchasing $60 million in Farmer Mac stock, and Zions Bancorporation of Salt Lake City purchased another $5 million in stock.

See also

• Fannie Mae
• Farm Credit System
• Freddie Mac
• Ginnie Mae
• Sallie Mae

External links

• Farmer Mac home page