§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 provide short- and medium-term loans and similar help. The Farm Credit Bank’s board sets the rules they must follow. Loans can go to real farmers and ranchers and to people who harvest aquatic products, for farming or fishing needs and for basic processing and marketing tied to their operations. If a borrower’s operation provides less than 20% of the total processing or marketing being financed, then the association’s total lending for those outside-processing projects cannot exceed 15% of all associations’ outstanding loans in the district at the end of the last fiscal year. Associations can also lend for rural housing under Farm Credit Administration rules and to people who give farm-related services. Housing must be single-family, moderate-priced, and fit local quality standards. Loans for housing to non-farmers in one association may not exceed 15% of that association’s outstanding loans at the end of the last fiscal year unless the Farm Credit Bank approves, and district-wide such housing loans cannot exceed 15% of all associations’ outstanding loans. Rural means places of 2,500 people or fewer. Associations may own or lease equipment to their stockholders. Interest rates, terms, and security follow board standards and the rules in section 2205. Rates should provide needed credit at the lowest reasonable cost and may change over time. The bank may require prior approval for some loan types and may allow lines of credit.