Farm Loan Products

Products

1-year Adjustable

Open prepayment and low interest rates may make this product appealing. Fixed for 1 year, the interest rate on this loan rolls to another 1-year fixed rate period for the life of the loan; the rate is based upon its pricing index plus an established margin. Available terms are flexible, being any length of time between 5 and 25 years with varying amortization lengths. This product can be tied to the United States Treasuries, Farm Credit Bank Funding Corporation bonds, or the Prime Rate. Payment options are monthly, semi-annually, or annually.

3/1, 5/1 Adjustable

Looking for a product to help meet your debt reduction plan? These 2 products offer rate stability with attractively low rates fixed for the short-term and open prepayment. The rate is fixed for the initial set term of the loan, 3 and 5 years respectively, then rolls to a 1-year Adjustable rate each year thereafter for the balance of the loan's term. The initial fixed term of the loan has rates tied to the United States Treasuries or Farm Credit Bank Funding Corporation bonds; the 1-year Adjustable rate is tied to LIBOR plus an established margin. Terms offered with this loan are 15 years with a choice of 15-year or 25-year amortization. Payments are semi-annual, due in January and July.

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

These products offer attractive interest rates and rate caps for the customer interested in long-term financing, but not long-term rates. Presenting a rate fixed for the adjustable term of the loan, the rate then adjusts each respective period for the life of the loan rather than annually as the 3/1, 5/1 Adjustable products. All 3 products can be tied to the United States Treasuries or Farm Credit Bank Funding Corporation bonds; the 3-year and 5-year term can also be tied to the Prime Rate. Terms available for these loans can be any length of time between 5 and 25 years with varying amortization lengths. Payments are monthly, semi-annually, or annually.

7/1, 10/1 Adjustable

For the security-minded customer, this product offers rates lower than long-term rates, yet still fixed for a longer term with open prepayment. Fixed for the initial fixed term of the loan, the rate then rolls to a 1-year Adjustable rate that is tied to LIBOR plus an established margin. This product can be tied to the United States Treasuries or Farm Credit Bank Funding Corporation bonds. Terms offered with this loan are 15 years with a choice of 15-year or 25-year amortization. Payments are semi-annual, due in January and July.

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

Ideal for the long-term-minded customer, we offer several different terms with our fixed rate products. The 10-year, 20-year, 25-year, and 30-year fixed rate products are fully amortizing and have 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. Interest rate caps are available. This product can be tied to the United States Treasuries or and Farm Credit Bank Funding Corporation bonds. Payments options are monthly, semi-annually, or annually.

Pricing Index

A commonly published rate used to calculate the rate in your note at closing and at any interest rate change date.

Treasuries

Rates are tied to United States government securities, specifically, the weekly average yield on Treasury constant maturities series as quoted in the H.15 of the Federal Reserve Board (www.federalreserve.gove/releases/h15/update) published for each applicable product.

LIBOR

LIBOR is the London Interbank Offered Rate, a global index that is commonly used to price loans around the world.

Prime Rate

Prime Rate is the interest rate charged by banks to their most creditworthy customers. The Prime Rate is quoted daily in the Wall Street Journal.

Farm Credit Bank Funding Corporation Bonds

Rates defined by the weekly estimated funding cost that is attached to bonds of the same maturity as your loan.

Margin

A percentage established in your note that is added to the index of your loan to calculate your interest rate.

Interest Rate Caps

Caps establish the maximum increase or decrease of your loan rate on interest change dates; available on select loan products.

2/6 Caps

These caps limit loan rate movement to 2.00% on each rate reset date and to 6.00% over the life of the loan.

4/6 Caps

These caps limit loan rate movement to 4.00% on each rate reset date and to 6.00% over the life of the loan.

9/9 Caps

These caps limit loan rate movement to 9.00% both on reset dates and over the life of the loan.

Prepayment Penalties

Fees, described in your note, that 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 varies by product. Prepayment is calculated as a percentage of the additional payment being made and is a sliding scale prepayment. Most products' prepayment is applicable in the 1st 5 years of the loan: prepayment 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 after the 5th year of the loan. Other products' prepayment is applicable in the 1st 3 years of the loan: prepayment 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 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 enhancements 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. 

Products Quick Links

Some quick links to our products