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The Federal Agricultural Mortgage Corporation ("Farmer Mac") has established a secondary market for the guaranteed portions of USDA-Farm Service Agency ("FSA") guaranteed Farm Ownership (FO) and Operating Loans (OL) and USDA-Rural Development (RD) guaranteed Business and Industry (B&I) and Community Facility (CF) loans. The market, known as "Farmer Mac II" is open continuously, permitting lenders to sell FSA and RD guaranteed portions quickly and efficiently on predictable and competitive terms. Under the Farmer Mac II program, Farmer Mac's subsidiary, Farmer Mac II LLC, buys guaranteed portions directly from lenders. The original lenders retain the unguranteed portions of these loans and continue to service the entire loan, according to the terms of the FSA and RD programs. Qualified Loans

• Any FO, OL, B&I, or CF guaranteed loan is eligible for sale through Farmer Mac II. Line-of-Credit Guarantees are not currently eligible.
• Farmer Mac II accepts guaranteed portions as they are generated by the FSA and RD programs, without being involved in administering those programs. Lenders are encouraged to work closely with Farmer Mac II in structuring and establishing the terms of new loans so that they can maximize the pricing benefits afforded by the secondary market.

Qualified Lenders

• Any lender who is qualified to make FSA/RD guaranteed loans.

Qualified Borrowers

• Any borrower who meets the lender’s as well as FSA/ RD’s criteria.

Required Documents (Single Note)

• One original Loan Guarantee (FSA-2235, FSA-1980-27, RBS 4279-5 or RD 449-34)
• One original Assignment of Guarantee (FSA-2242, RBS 4279-6 or RD 449-36)
• One copy of fully executed Promissory Note (and note amendments if applicable)
• Two original Farmer Mac II Sale Agreements

Required Documents (Multi-Note)

• One original Loan Guarantee (FSA-2235, FSA-1980-27, RBS 4279-5 or RD 449-34)
• One original Assignment and Servicing Agreement
• One original fully executed Promissory Note for the guaranteed portion
• One copy of fully executed Promissory Note for the unguaranteed portion
• Two original Farmer Mac II Sale Agreements

Recommended Loan Terms

• Loan structures and terms have a direct impact on the pricing received in the secondary market. The following are recommended loan terms/structures for optimum pricing:

Variable Rates:

• Farmer Mac 3-Month Cost of Funds Index Net Yield with calendar quarter rate adjustments; or
• Wall Street Journal Prime Rate with calendar quarter rate adjustments.

Fixed/Adjustable Rates:

• Various fixed rate terms and amortizations—see available Farmer Mac II Rate Line; or
• 5, 10 or 15-year resets with acceptable amortizations ranging from 15 to 30 years. Loans are tied to either the Farmer Mac 5, 10 or 15-Year Reset Cost of Funds Index (COFI) Net Yield.

Payment Options and Dates:

• Annual – January 1, April 1, July 1, or October 1
• Semi-annual – January 1 & July 1, or April 1 & October 1
• Quarterly – January 1, April 1, July 1, or October 1
• Monthly – 1st day of each month

Interest Calculation:

• Preferred accrual basis is Actual over 365 days

The Farmer Mac II cash window is open for Farmer Mac II Interest Rate Commitments (rate locks) Monday through Friday from 10:00 a.m.– 3:00 p.m. eastern time. Promissory Notes to be rate locked must be e-mailed to (ratelock@farmermac2.com) or faxed (877-733-1204) to Farmer Mac II prior to rate lock. Once the commitment is completed, Farmer Mac II will fax or e-mail a Commitment to Purchase Confirmation to the Lender outlining the agreed upon terms.

Note: Farmer Mac II must receive verbal confirmation during this window of time whether the Lender wishes to rate lock at the current rate or not. If verbal confirmation is not available, Farmer Mac II will not perform the rate lock. STEP 1: Obtain executed Assignment of Guarantee (FSA-2242, RBS 4279-6 or RD 449-36) from your local FSA or RD office.
STEP 2: Complete and assemble the following required documents:
STEP 3: Submit assembled documents to:
(Documents should be remitted at least one week prior to anticipated settlement date.)
STEP 4: Loan pricing occurs on the Wednesday prior to settlement (if price not previously agreed to via rate lock prior to Step 1.)
STEP 5: Proceeds for guaranteed portions purchased are wired to sellers on Thursday, which is the weekly settlement date.
Detailed remittance procedures for Farmer Mac II guaranteed portions can be found in the Farmer Mac II Reference Guide. Servicing action requests can be made directly to the Farmer Mac II program by submitting a servicing action request form online, by e-mail (servicing@farmermac2.com) or fax (877-733-1204). Examples of possible servicing actions include: modification to loan payment schedule, adjusted payment amount, revised maturity date, and interest capitalization. Any changes to be made to the original Promissory Note will require an Allonge with the borrowers signature as well as USDA concurrence to the Allonge.