Reference Guide - Introduction to Selling USDA Guaranteed Loans

Description

Adjustable and fixed-rate USDA guaranteed portions. Loans can be newly-originated or seasoned.

Eligibility Criteria

Qualified Loans

Any USDA Farm Service Agency (FSA) Farm Ownership (FO), Operating Loan (OL), or Conservation Loan (CL); or USDA Rural Development Business & Industry (B&I), Community Facility (CF), or Water and Environmental Program (WEP) guaranteed loan is eligible for sale through Farmer Mac 2.

Qualified Lenders

Any lender who is qualified to make FSA/RD loans is qualified to sell to Farmer Mac 2.

Qualified Borrowers

Any borrower who meets the lender's as well as the FSA's/RD's criteria is eligible.

Required Guaranteed Portion Sale Documentation (Single Note or Split-Rate)

Copies of the following documents should be uploaded to our Online Loan App (OLA) and submitted for review prior to settlement. The original Assignment should be sent directly from the USDA/FSA office to the loan administrator; more information about original document delivery can be found here.
 
  • One copy of the 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)

Required Guaranteed Portion Sale Documentation (Multi-Note)

Copies of the following documents should be uploaded to OLA and submitted for review prior to settlement. The original Assignment, Guarantee, and guaranteed portion note should be sent directly from the USDA/FSA office to the loan administrator; more information about original document delivery can be found here.
 
  • One original of the Loan Guarantee (FSA-2235, FSA-1980-27, RBS 4279-5 or RD 449-34)
  • One original Assignment and Servicing Agreement or Assignment of Guarantee (FSA-2242 or RD 449-34)
  • One original of fully executed Promissory Note for the guaranteed portion
  • One copy of the fully executed Promissory Note for the unguaranteed portion

Loan Products

We offer pricing for a variety of fixed and adjustable products. Our products are and have always been open prepayment. We are happy to accept seasoned loans or loans with maturities that don't precisely match an existing product; generally, non-standard maturities will be rounded up to the next available product. (e.g. a fixed rate loan with a 19 year maturity may be priced in our 20 year fixed rate product).

Variable Rates
  • Wall Street Journal Prime Rate with daily, monthly or quarterly adjustments; or
  • Farmer Mac 3-Month Cost of Funds Index (COFI) Net Yield with calendar quarter adjustments
Adjustable Rates
  • Farmer Mac 5-Year Reset Cost of Funds Index (COFI) Net Yield, with applicable standard interest rate reset date
  • Farmer Mac 10-Year Reset Cost of Funds Index (COFI) Net Yield, with applicable standard interest rate reset date
  • Farmer Mac 15-Year Reset Cost of Funds Index (COFI) Net Yield, with applicable standard interest rate reset date
Fixed Rates
  • Various fixed rate terms and amortizations as announced in the Farmer Mac 2 Rate Line

Payment Date Requirements

  • 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

Promissory Note Modifications

Non-standard loans can be modified into standard loan products via a Change In Terms Agreement, Note Modification, or other document modifying the Promissory Note. Borrower and lender must execute the Note Modification and the applicable USDA agency must issue a written acknowledgement of the modification.

Interest Accrual Basis

Preferred interest accrual basis is Actual/365.

Online Loan App (OLA)

Guaranteed portions sold to Farmer Mac 2 are processed through our Online Loan App (OLA), which is available on efarmermac.com or via the Secure Login link at the top right corner of this website.

Locking a Rate

The Farmer Mac 2 rate lock window is open on business days from 10:00 a.m.– 3:00 p.m. eastern time. Loan information for potential rate locks must be submitted via OLA. Lenders have the option of entering a 4-, 6-, or 8-week rate lock commitment. Once the rate has been locked, a Commitment to Purchase Confirmation will be available on OLA outlining the agreed-upon terms.

If you do not currently have a profile to our secure access portal or OLA, you can get set up by calling one of our friendly relationship managers. Find out how to connect with the relationship manager for your state here.

Settlement


Step 1: Complete the required Loan Data information (“Borrower” and “Loan Data” tabs)
Step 2: Upload the required guaranteed portion sale documents (“Documents” tab)
Step 3: Submit the Assignment of Guarantee to the appropriate USDA office for further delivery to the Program Administrator according to these steps. Any additional required guaranteed portion sale documents should be overnighted directly to the Farmer Mac 2 Program Administrator at this address:
Farmer Mac II LLC
c/o Conterra Asset Management
7755 Office Plaza Drive North, Suite 195
West Des Moines, IA 50266
Phone: 855-381-3451
settlements@conterraag.com
(Documents should be remitted at least one week prior to anticipated settlement date.)
Step 4: For all guaranteed portions delivered for settlement without a prior rate commitment, “Cash Rate” loan pricing will occur on the Wednesday prior to settlement.
Step 5: Proceeds for guaranteed portions purchased are wired to sellers weekly on their settlement date, typically Thursday (earlier on holidays). Sellers will receive a settlement statement from the Program Administrator detailing the wire amount. 

Servicing Actions

Servicing action requests can be made directly to the Farmer Mac 2 program by e-mail (servicing@farmermac2.com). 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 a Note Modification with the borrower's signature as well as written USDA acknowledgement of the Note Modification. Any proposed changes must be approved by Farmer Mac 2 before any documentation is executed. 

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