Financial and lending terms

1-year Adjustable

Fixed for 1 year, this interest rate rolls to another 1-year fixed rate period for the life of the loan. The rate is based upon a pricing index plus an established margin and can be tied to a variety of indices. Many loan terms and payment options are available.

3/1, 5/1 Adjustable

The rate is fixed for an initial period (either 3 or 5 years) then rolls to a 1-year Adjustable rate each year thereafter for the balance of the loan's term. The 1-year Adjustable rate is tied to LIBOR plus an established margin. A variety of loan maturities and payment options are available.

3-year, 5-year, 7-year Adjustable

A rate fixed for the adjustable term of the loan (3, 5, or 7 years), the rate then adjusts for the same period for the life of the loan. A variety of loan maturities and payment options are available.

7/1, 10/1 Adjustable

Fixed for the initial fixed term of the loan (7 or 10 years), the rate then rolls to a 1-year Adjustable rate that is tied to an index plus an established margin. A variety of loan maturities and payment options are available.

10-year, 15-year, 20-year, 25-year, 30-year Fixed Rate

The 10-year, 20-year, 25-year, and 30-year fixed rates are fully amortizing (no balloon payment). The 15-year fixed rate product has 15-year or 25-year amortization. Partial open prepayment applies, or a slightly lower interest rate is available with full yield maintenance. Payments options are monthly, semi-annually, or annually.

Prepayment Penalties 

Some products have fees, described in your note, which are charged when non-scheduled loan payments are made.

Open prepayment

There is no fee for non-scheduled loan payment, but payments in excess of the scheduled payment must be received on scheduled payment date, or must be accompanied by interest through next payment date. This also applies to payment-in-full of the loan prior to loan maturity.

Partial open prepayment

Calculation of partial open prepayment penaltys vary by product. Prepayment penalty is calculated as a percentage of the additional payment being made and is a sliding scale prepayment penalty. Most products' prepayment penalty is applicable in the 1st 5 years of the loan: prepayment penalty is 5% the 1st year of the loan, 4% in the 2nd year of the loan, 3% in the 3rd year of the loan, 2% in the 4th year of the loan, and 1% in the 5th year of the loan; there is no prepayment penalty after the 5th year of the loan. Other products' prepayment penalty is applicable in the 1st 3 years of the loan: prepayment penalty is 9% in the 1st year of the loan, 8% in the 2nd year of the loan, and 7% in the 3rd year of the loan; there is no prepayment penalty after the 3rd year of the loan. Open prepayment after 1st 3 years on 10-year term loans, and after 1st 5 years on term loans in excess of 10 years.

Full yield maintenance

Any payment of the loan before maturity date requires fees based on the difference between loan rate and investment rate of the loan. Full yield maintenance is also referred to as "make whole" or "make well."

Guaranteed Loans

A Guarantee to the lender by the United State Government on loans requiring credit enhancements.

Farm Service Agency Guaranteed loans

We currently offer Guaranteed loans in California, Oregon, Idaho, Montana, Minnesota, Michigan, Illinois, Indiana, Missouri, Tennessee, Kentucky, Ohio, North Carolina, and Georgia. We have the potential to offer these loans in many other states. Examples of when a credit enhancement include offsetting risk of the 1st-time farmer or offsetting high loan-to-value of a poultry operation. Please refer to Farm Loan Products for available products and descriptions.

Tax rules have changed

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AGRIfinancial Services 2209 River Road Louisville, KY 40206 NMLS #1472

Phone: 502-721-9446 Fax: 502-721-9776 Toll free: 877-548-2622

Email: financeinfo@cgb.com

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