§2019 Purposes for Extensions of Credit

Summary

Farm Credit Banks may lend to farmers, ranchers, and people who harvest aquatic products for any farm- or fishing-related need. They can also finance basic processing and marketing that is directly tied to the borrower’s operation or to other eligible producers. The borrower’s own operation must supply at least some of the processing or marketing. If the borrower supplies less than 20% of what is being financed, then a bank’s total loans for such processing and marketing cannot exceed 15% of that bank’s total outstanding loans. Banks may make rural housing loans to rural residents under Farm Credit Administration rules. Those loans must be for single-family, moderate-priced homes and related features that fit local rural standards. No bank may have more than 15% of its total outstanding loans in rural housing to people who are not farmers or ranchers. “Rural areas” do not include any city or village with more than 2,500 people. Banks may also lend to businesses that provide farm-related services for needed buildings, equipment, and initial working capital, and may own and lease, or lease with an option to buy, equipment or facilities to eligible borrowers.