§2019 Purposes for extensions of credit

Summary

Farm Credit Banks can lend to farmers, ranchers, and people who harvest fish or shellfish for any farm or fishing purpose and for other credit needs. They can also finance basic processing and marketing that ties directly to the borrower’s operations or to other eligible producers, as long as the borrower provides at least some of the product being processed or marketed. If the borrower’s share is under 20% of the total processing or marketing project, then the bank’s total loans for such projects cannot exceed 15% of all its outstanding loans. Banks may also make rural home loans under Farm Credit Administration rules. Those homes must be single-family, moderate-priced, and fit local standards. At no time may loans for such rural homes to non-farmers exceed 15% of a bank’s total loans. "Rural areas" do not include towns with more than 2,500 people. Banks may also lend to people who provide farm-related services for the buildings, equipment, and start-up working capital they need. Banks may own and lease, or lease with an option to buy, equipment or facilities to borrowers who qualify under these lending programs.