Has anyone worked with Farm Credit to get a loan? Was it only for land or was for both for the land & building a house? What was your experience working with them?
I’ve never gotten a loan through farm credit, but I do a lot of consulting work for them. They do loans for land and building a house/building, but loan to value ratios are usually looked at pretty closely so they’ll want a good down payment on your part.
A key part of farm credit is the patronage payment, where qualifying borrowers get some of their paid interest back each year. The payments vary depending on which association you work with, and qualifying for the loans also depends on the type of loan you get. There’s usually at least two different associations in every area that can lend out, so it’s worth asking if your loan qualifies for patronage, and comparing the different associations to select one that pays out more.
Let me know if you have questions on the system in general, I’m happy to answer.
My mortgage is through Farm Credit (AgFirst). They were great, very good with communication during the closing process, I have a low interest rate, and they’ve been good with customer service any time I’ve needed to call in the last three years. 20 acres + house and barn. Our down payment was 5%.
I did get a forbearance after hurricane Irma and that was a sh*t show, but I’m pretty sure it was for everyone so that’s not specific to Farm Credit.
I love Farm Credit. They have been extremely helpful and my go to lender for agricultural property. I have financed both land + house and land through them.
When we initially found our farm, it was in two parcels – one 81 acres and one 14 acres. Farm Credit suggested we do a lot line adjustment with the county breaking it into a 40 and 45 acre parcel. That was much more advantageous for us to finance.
The loans we have do qualify for the patronage payment. Every year we get a substantial payment back…usually in the ball park of a mortgage payment.
I also like the conversion options they offer on their loans. Basically it is are refi if the interest rates drop. Costs $250. That’s it. And you get the new lowered rate for the remaining term of your loan. We have converted our loans several times over the years.
Farm Credit does require a good down payment for its loans. This is not unusual for any lender who is taking on an ag property or raw land.
Farm Credit is all about relationship lending. They like having long term customers and serving their needs.
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I refinanced with Farm Credit. I can’t remember if I applied for my mortgage with them, but when I went to build my barn they wouldn’t lend to me. I think they wanted me to have 20% down; I had only 5% down on the house. After the barn was built I had an appraisal done and refi’d my mortgage and SBA loan into one loan. I would say it was a good experience. I was so happy to get rid of the SBA loan!
I’ve never heard of this patronage payment. (Due to refinance?) My account does have a Funds Held account that has a pretty good interest rate. My loan officer made it sound like a savings account but they consider it mortgage prepayment–though you can withdraw it.
I love Farm Credit East. The lovely patronage payment is almost 2X my mortgage payment and we have gotten a couple of extra payments when loans are performing well. I love February when the dividends come due 
Easy to work with - we have gotten equipment notes on tractors or to get the roof reshingled without a lot of hassle - the loan officer brought the paperwork to us and we did everything in the kitchen.
Surprisingly the only thing they balked at was the 200,000 dollar solar system we installed. I would have thought they would be all in favor of it.
Full disclosure - I work for a Farm Credit - although not in a customer facing position.
Because we are quasi-government, we do have different credit standards and one of those is the 20% down (not on all products but on the more traditional products).
Patronage has nothing to do with refinancing. Because Farm Credits are Cooperatives, one of the things they do is return income (on eligible products) to their patrons (customers). It is typically calculated on the Average Daily Balance of a loan and at a rate approved by the Board. Rates to vary from Farm Credit to Farm Credit. If your loan product is a Consumer Home Loan, then it is unlikely that it is eligible for Patronage.
A Funds Held Account is technically supposed to be a place to store your next loan payment. Yes, it operates similarly to a savings account but the intended purpose of the funds is supposed to be for making loan payments - not to save up for your next truck and horse trailer 
It also has nothing to do with Patronage.
The conversion option mentioned by Ironwood Farm is not offered by all Farm Credits. It gets rather complicated to explain why, however, it is related to how Farm Credits get their debt and the impact of needing to retire debt early or carrying high cost debt on an entity’s books.
Again, I don’t work in a customer-facing position but I would suspect that the solar system would be a hard item to appraise for collateral purposes. Yes, you know what it cost to purchase and install but how much will it be worth in the future if it had to be sold to recoup dollars on a loan that didn’t perform.
Another difference is that Farm Credit holds their loans until maturity unlike mortgage companies that tend to bundle their loans and sell them on the secondary market. Plus, most lending employees live in the communities in which they work and loads of them have an Ag background - so yes, good customer relationships are very important to Farm Credits - we are your neighbors.
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Thanks for some behind the scenes info!
