In rural America, life for farmers and others in agriculture can be volatile, unpredictable, and hard.
“The farmer has to be an optimist, or he wouldn’t still be a farmer,” American humorist Will Rogers once famously said.
To help keep credit available and affordable in rural America, Farmer Mac—officially the Federal Agricultural Mortgage Corp.—is important because it provides liquidity to rural lenders and gives back cash that allows them to make more loans to farmers, ranchers, rural homeowners, and agribusiness.
To do that, Farmer Mac buys and guarantees agricultural and rural loans, or the securities backed by them.
Farmer Mac supports farmers and ranchers directly by helping to finance:
- Farm and ranch land purchases
- Agricultural equipment and infrastructure
- Operating loans
- Loans for young, beginning, and small farmers
Without Farmer Mac, many of those borrowers likely would face higher interest rates or fewer lending options.
We asked Farmer Mac to answer a few questions to help tell its story. Zachary Carpenter, President and COO, and Jackson Takach, Chief Economist & VP—Head of Farm & Ranch, provided the answers:
Q: Why is Farmer Mac so important to Rural America?
Carpenter: As a financial services firm and Government-Sponsored Enterprise, Farmer Mac is dedicated to our mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure to help build a vibrant and strong rural America. Through our work, we help strengthen the economic framework that supports rural America and enables families, businesses, and entire communities to thrive.
Q: How many Americans benefit each year from Farmer Mac’s services?
Carpenter: The number varies year by year based on demand for capital in rural America. However, tens of thousands of Americans benefit on average each year through our various lines of business. From the hundreds of rural housing loans we purchase or guarantee on average, to the thousands of farmland mortgages, to the tens of thousands of rural homes that receive electricity from projects we finance or internet through fiber projects we helped capitalize.
Q: How has demand for Farmer Mac loans shifted over the past 12–24 months, especially in the current high-rate environment?
Takach: Demand for Farmer Mac loans has evolved significantly over the past couple of years. For farm and ranch loans, demand has picked up considerably as elevated input costs and weaker commodity prices have weighed on producer working capital. Meanwhile, demand in other lines of business has remained robust as power and utilities, broadband infrastructure, and renewable energy projects continue to be critical investments across rural America.
Q: Do you see more homebuyers turning to Farmer Mac in rural America as other affordability pathways narrow?
Takach: There has not been a noticeable shift in rural housing loans or farming homestead loans that Farmer Mac has purchased or committed to purchase over the past several years. However, this program continues to work well for lenders who want to offer homebuyers an alternative financing option when buying a home and property that may not qualify for other secondary market buyers.
Q: Which rural markets today are showing the strongest—and weakest—homeownership trends, and why?
Takach: There are no discernible trends in our rural home purchasing program. There was a meaningful outflow during the pandemic of residents leaving urban areas and moving to more rural areas. This trend has slowed relative to peak activity. Still, the continued rollout of fiber and enhanced infrastructure across rural America, which Farmer Mac also helps finance, has improved the ability of residents to move to more rural areas of the country and remain connected to friends, family, and economic opportunity.
Q: How do Farmer Mac’s programs differ from conventional home borrowing and from FHA loans, and how closely do you work with USDA to facilitate homeownership?
Takach: Rural housing loans that are purchased by Farmer Mac tend not to qualify for other secondary market buyers. Fannie Mae, Freddie Mac, and other lenders (primary or secondary) tend to have restrictions on rural properties used primarily for income-producing farming, ranching, or commercial enterprises, or have significant acreage of undeveloped land.
Q: What role do you believe Farmer Mac loans play in helping borrowers build generational wealth in rural areas?
Carpenter: For several decades, Farmer Mac has worked with lenders across America to provide liquidity for capital and risk management. In doing so, these originators have been able to work directly with borrowers and offer an enhanced set of lending solutions. In thousands of these situations, Farmer Mac has provided a source of capital that has helped both the borrower and lender be successful. Over the decades, Farmer Mac’s presence has enhanced the financial success of these borrowers.
Q: Beyond farm and ranch land purchases, what other services does Farmer Mac offer?
Carpenter: We offer a wide range of solutions to help meet financial institutions’ growth, liquidity, risk management, and capital relief needs, as well as unique and competitive products that support their borrowers across diverse markets, including agriculture, agribusiness, broadband infrastructure, power and utilities, and renewable energy.
A Complementary Framework
As rural housing demand continues to evolve, the path to sustainable homeownership in America’s least dense markets depends on more than a single program or institution. It requires a system that can meet borrowers at the point of purchase while also ensuring lenders have the confidence, capital, and flexibility to serve communities where housing markets function differently than in urban centers.
USDA and Farmer Mac occupy distinct but complementary roles within that system. Together, these two institutions help stabilize rural housing markets, expand access to credit, and support long-term investment in rural communities. As affordability pressures persist and migration patterns continue to shift, their combined efforts will remain central to ensuring that rural homeownership is both attainable and sustainable for the generations that follow.
The post Beyond the City Limits, Part 2 first appeared on The MortgagePoint.
