DEFINITION of 'Farmer Mac - Federal Agricultural Mortgage Corporation - FAMC'
A publicly traded, shareholder-owned corporation that was federally chartered by an act of Congress in 1988. Farmer Mac's mission is to establish a secondary market for agricultural real estate and rural housing mortgage loans, as well as to increase the availability of long-term credit at stable interest rates for American farmers, ranchers and rural homeowners.
To fulfill its mission, Farmer Mac purchases newly originated and seasoned agricultural loans from lenders, issues long-term standby commitments to purchase agricultural mortgage loans, exchanges loans for mortgage-backed securities through a swap program, and purchases and guarantees mortgage bonds backed by eligible agricultural mortgage loans.
BREAKING DOWN 'Farmer Mac - Federal Agricultural Mortgage Corporation - FAMC'
Farmer Mac's programs and mission are very similar to Fannie Mae's and Freddie Mac's programs and missions for traditional residential mortgages. Farmer Macs was established to provide a liquid secondary market for agricultural mortgages, thereby lowering interest rates and providing a stable flow of funds to agricultural borrowers. This is similar to how Fannie Mae and Freddie Mac were established to provide similar benefits to the residential mortgage market.