Federal Land Bank

One of 12 banks under the U.S. Farm Credit Administration that extends long-term mortgage credit to crop farmers and cattle raisers for buying land, refinancing debts, or other agricultural purposes. To obtain a loan, a farmer or rancher must purchase stock equal to 5% of the loan in any one of approximately 500 local land bank associations; these, in turn, purchase an equal amount of stock in the Federal Land Bank. The stock is retired when the loan is repaid. The banks raise funds by issuing Consolidated Systemwide Bonds to the public. See also Federal Farm Credit Bank; Federal Farm Credit System.

Specialized, government-sponsored Lenders. Part of the Federal Farm Credit System, these banks are cooperatively owned and make Loans for land purchase, Refinancing and renovation work on Rural real estate only. Created to help alleviate the shortage of real estate credit outside of Urban areas.Example: The Farm Credit System is a government-sponsored enterprise (GSE), but the banks themselves are owned by the people who take out the loans. Funds for these loans are raised through debt securities that are retired as the loans are repaid. The federal government takes no active role in running the system but provides implicit backing to improve its ability to raise funds.