DECEMBER 11TH, 2018

Associated Farm Mortgage

Associated Farm Mortgage specializes in long term farm and ranch loans. Because they service only this area they can provide lower interest rates and better, more knowledgeable service than other lenders. They are one of the leading agriculture real estate lenders in the nation. Anchor Mortgage provides personal service with a high degree of understanding in the agriculture market. Their mission is to provide a highly competitive alternative source of loans for agriculture.

Associated Farm Mortgage offers a wide selection of loan products. Their minimum loan amount is $300,000 and some of their products have no upper limit. Loans over $5,000,000 have special pricing. Many of their loans carry a stiff prepayment penalty. This means that if the borrower pays of the loan early, for any reason, he must pay a percent of the principal as a penalty. Most of Associated Farm Mortgage’s prepayment penalties are of the 5,4,3,2,1 type where the penalty is 5% of the principal the first year, 4% the second year and so on until after the fifth year there is no penalty.

Loans Offered by Associated Farm Mortgage :

  • 10, 1, 20, 25 Year Fixed Rate Loans
  • 3/1, /1, 7/1 and 10/1 Year Adjustable Rate Mortgages
  • 1, 3, 5, and 7 Year Adjustable Rate Mortgages
  • 1, 3 and 5 Year Reset Mortgages
  • Integrated Poultry Facility Loans

Associated Farm Mortgage takes only qualified borrowers. They do not indulge in creative financing. The only collateral for their loans is the agricultural real estate for which the loan is meant. Equipment, livestock, crops or other residential real estate is not allowed as collateral for their loans.

The land must be a viable commercial enterprise with a production history backed by tax returns. No loans will be issued for speculative land. The borrower must go through a rigid qualification process as well. The buyer must have good credit and will not be considered if they pose a greater than average risk. For the most part a 50% debt to asset ratio must be maintained, however for some specified regions a 60% ratio is allowed as it is guaranteed by the farm services agency. A 660 credit score is required, but under some circumstances a lower score may be considered. Those with recent bankruptcies, outstanding judgments, tax liens, or other significant negatives will not be considered. The requirement may seem harsh, but they do keep the interest rates a little lower and Associated Farm Mortgage wants their clients to have the greatest chance of success.

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