§2075 Short- and intermediate-term loans; participation; other financial assistance; terms; conditions; interest; security

Summary

Production credit associations may make, guarantee, or join with other lenders to give short- and mid-term loans and similar help under rules set by the Farm Credit Bank board in that district. Eligible borrowers include farmers and ranchers, people who raise or harvest aquatic products, rural residents for home loans, and businesses that provide farm-related services. The associations can also finance basic processing and marketing tied to the borrower’s operations, but if a borrower’s own output is less than 20% of the processing or marketing being financed, then all such processing/marketing loans by associations in the district together cannot exceed 15% of the district’s total outstanding loans at the end of the prior fiscal year. Home loans must be for single-family, moderate-priced houses that match local standards. An association’s housing loans to non-farmers cannot exceed 15% of its outstanding loans at the end of the prior fiscal year unless the Farm Credit Bank approves, and the districtwide total also cannot exceed 15%. “Rural areas” do not include any city or village with more than 2,500 people. Associations may own and lease equipment to members. Interest rates, loan terms, security, and other rules are set under the bank’s standards and subject to section 2205; rates can change over time, and some loans may need prior bank approval or may be given as a line of credit.