§2019 Purposes for Extensions of Credit

Summary

Farm Credit Banks can lend to farmers, ranchers, and people who harvest aquatic products for any farm or fishing purpose and other credit needs. They can also help pay for basic processing and marketing that links directly to the borrower’s operation and to other eligible producers. The borrower must supply some of what is processed or marketed. If a borrower supplies less than 20% of the total processing or marketing, then all such processing and marketing loans by a bank together cannot exceed 15% of that bank’s total outstanding loans. Banks may also lend to businesses that provide farm-related services for buildings, equipment, and starting working capital. Banks may own and lease, or lease with an option to buy, equipment or facilities to eligible borrowers. Banks may make rural housing loans to rural residents under Farm Credit Administration rules. The homes must be single-family, moderate-priced, and match local standards. At any time, a bank may not have more than 15% of its total outstanding loans in such rural housing to people who are not farmers or ranchers. For this purpose, “rural areas” do not include any city or village with more than 2,500 people.