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The Federal Agricultural Mortgage Corporation, also known as Farmer Mac, is a stockholder-owned, publicly traded company that was chartered by the United States federal government in 1988 to serve as a secondary market in agricultural loans such as
mortgages A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...
for agricultural real estate and rural housing. The company purchases loans from agricultural lenders, and sells instruments backed by those loans. The company also works with the
United States Department of Agriculture The United States Department of Agriculture (USDA) is the federal executive department responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. It aims to meet the needs of com ...
. It is based in
Washington, D.C. ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...


History

It was created by the
Agricultural Credit Act of 1987 In United States federal agriculture legislation, the Agricultural Credit Act of 1987 () was enacted in response to the severe financial crisis of the early- to mid-1980s, which affected both farmers and their lending institutions. The Act auth ...
() as a federally chartered, private corporation responsible for guaranteeing the timely repayment of principal and interest to investors in a new agricultural secondary market. The secondary market allows a lending institution to sell a qualified farm real estate loan to an agricultural mortgage marketing facility, or pooler, which packages these loans, and sells to investors securities that are backed by, or represent interests in, the pooled loans. Farmer Mac guarantees the timely repayment of principal and interest on these securities and, under authorities granted in 1995, can also serve as a loan pooler. The company was founded in the midst of a $4 billion bailout of the
Farm Credit System The Farm Credit System (FCS) in the United States is a nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides more than $304 billion in loans, leases, and related services t ...
, hoping to provide an alternative source of credit to farmers following the models of
Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...
and
Ginnie Mae The Government National Mortgage Association (GNMA), or Ginnie Mae, is a government-owned corporation of the United States Federal Government within the Department of Housing and Urban Development (HUD). It was founded in 1968 and works to expa ...
.


Financial crisis of 2008

In June 2008, Farmer Mac had $47.2 million invested in
Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...
shares. Over the next few months, in the wake of the
Federal takeover of Fannie Mae and Freddie Mac In September 2008 the Federal Housing Finance Agency (FHFA) announced that it would take over the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Both government-sponsored enterpr ...
, these investments lost about $44 million in value. The company also had significant investments in the newly-bankrupt
Lehman Brothers Holdings Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, an ...
. In response, the
Farm Credit System The Farm Credit System (FCS) in the United States is a nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides more than $304 billion in loans, leases, and related services t ...
bailed the company out by purchasing $60 million in Farmer Mac stock, and Zions Bancorporation of Salt Lake City purchased another $5 million in stock.


See also

*
Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...
*
Farm Credit System The Farm Credit System (FCS) in the United States is a nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides more than $304 billion in loans, leases, and related services t ...
*
Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons Corner, Virginia.Ginnie Mae The Government National Mortgage Association (GNMA), or Ginnie Mae, is a government-owned corporation of the United States Federal Government within the Department of Housing and Urban Development (HUD). It was founded in 1968 and works to expa ...
* Sallie Mae


References


External links


Farmer Mac home page
Companies listed on the New York Stock Exchange Companies based in Washington, D.C. Agricultural organizations based in the United States United States government-sponsored enterprises Mortgage industry of the United States Mortgage industry companies of the United States {{agriculture-org-stub