Federal Agricultural Mortgage Corporation: Difference between revisions

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{{Short description|Farmer agricultural bank}}
'''Farmer Mac''' or the '''Federal Agricultural Mortgage Corporation''' is a stockholder-owned, publicly-traded company that was chartered by the United States federal government in [[1988]] to serve as a [[secondary market]] in agricultural loans such as [[mortgage]]s for agricultural real estate and rural housing. The company purchases loans from agricultural lenders, and sells instruments backed by those loans. The company also works with the [[United States Department of Agriculture]].
{{about|Farmer Mac in the United States||Agricultural Mortgage Corporation (disambiguation)}}
{{more citations needed|date=February 2015}}
{{Infobox company
| name = Federal Agricultural Mortgage Corporation
| trading_name = Farmer Mac
| logo = File:Farmer_Mac_logo.png
| traded_as = {{nyse|AGM}}<br />{{nyse|AGM.A}}<br />{{nowrap|[[Russell 2000 Index|Russell 2000 Component]] (AGM)}}
| hq_location = 2100 Pennsylvania Ave NW Ste 450N
| hq_location_city = [[Washington, D.C.]]
| hq_location_country = [[United States of America]]
| website = {{URL|http://www.farmermac.com}}
| footnotes =
}}
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.<ref name="FCA">https://www.fca.gov/farmer-mac-oversight/about-farmer-mac {{Bare URL inline|date=July 2025}}</ref><ref>https://www.congress.gov/crs-product/IF11595 {{Bare URL inline|date=July 2025}}</ref> 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.<ref>https://www.federalregister.gov/documents/2020/02/21/2020-01888/oversight-of-the-federal-agricultural-mortgage-corporation {{Bare URL inline|date=July 2025}}</ref><ref>https://ncua.gov/regulation-supervision/legal-opinions/2024/permissibility-farmer-mac-stock {{Bare URL inline|date=July 2025}}</ref><ref>https://www.federalregister.gov/documents/2023/01/24/2023-01042/federal-agricultural-mortgage-corporation-funding-and-fiscal-affairs-risk-based-capital-requirements {{Bare URL inline|date=July 2025}}</ref><ref name="ICBA">https://www.icba.org/docs/default-source/icba/advocacy-documents/2018-farm-bill-white-paper.pdf {{Bare URL PDF|date=July 2025}}</ref>
 
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.<ref name="FCA"/> 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.<ref name="FCA"/><ref name="ICBA"/>
 
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.<ref>https://sgp.fas.org/crs/misc/RS21663.pdf {{Bare URL PDF|date=July 2025}}</ref>
 
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.<ref name="FCA"/>
 
==History==
It was created by the [[Agricultural Credit Act of 1987]] ({{uspl|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]].<ref>{{cite web|url=https://www.nytimes.com/1987/10/03/opinion/fannie-mae-meet-farmer-mac.html|title=Fannie Mae, Meet Farmer Mac |work=[[The New York Times]] |date=3 October 1987 |url-access=limited}}</ref>
 
===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.<ref>{{cite web |url=https://www.forbes.com/2008/10/01/farmer-mac-closer-markets-equity-cx_ra_1001markets43.html |title=Farmer Mac's Amber Waves Of Pain | first=Ruthie | last=Ackerman |work=[[Forbes]] |date=October 1, 2008 | url-access=limited}}</ref>
 
== See also ==
* [[Fannie Mae]]
* [[Farm Credit System]]
* [[Freddie Mac]]
* [[Ginnie Mae]]
* [[Sallie Mae]]
 
==References==
{{reflist}}
 
== External links ==
* [http://www.farmermac.com/ Farmer Mac home page]
 
{{Presidency of Ronald Reagan}}
[[Category: Real estate]]
{{USDA agencies}}
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[[Category:Companies listed on the New York Stock Exchange]]
[[Category:Companies based in Washington, D.C.]]
[[Category:Agricultural organizations based in the United States]]
[[Category:United States government-sponsored enterprises]]
[[Category:Mortgage industry of the United States]]
[[Category:Mortgage industry companies of the United States]]