Poolers must be certified by Farmer Mac and meet requirements of the program. The pooled deposits that provide a guarantee of repayment for investors help manage the risk of interest rate changes. Loan amounts cannot exceed 75 percent of the appraised value of the land and dwelling, or 85 percent with private mortgage insurance. Amortization may be up to 30 years. Rates are fixed through negotiation between the lender and borrower.
Equity is subject to the lender's criteria for the originated loan.
The guaranteed portion of Rural Development loans for farm ownership and farm operating loans, which may be newly-originated or existing, can be sold to Farmer Mac. Loans in portfolio must have at least 12 months remaining term, have valid assignable guarantees, be current and not delinquent in the previous 12 months, and not have an early payoff, delinquency, liquidation or default. Lenders must follow RD standards and procedures for originating farm ownership and operating loans. The ability to sell guaranteed portions of loans helps lenders manage interest rate risk. Equity is subject to the lender's criteria.