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Questions and
Answers
What is
an ACA?
An ACA is a financial service provider specializing in loans to
purchase, improve and/or operate farms, ranches, recreational property,
agribusinesses and rural homes. ACAs are cooperatively owned and
locally operated.
What type
of loans do ACAs offer?
ACAs offer a variety of loan programs and interest rate plans, with
both fixed- and variable-rate loans available. ACAs also offer small-loan
programs and loans for young, beginning and small farmers. Loans
may be used to:
- Cover operating
expenses such as seed and chemicals
- Purchase
land
- Refinance
existing mortgages and other debts
- Construct
and repair buildings
- Improve
farm and ranch property
- Construct
and improve agribusiness facilities
- Purchase
machinery and equipment
- Purchase
livestock
- Build a
rural home or purchase a rural homesite
- Pay for
the family living expenses of the association's member-stockholders
- Meet other
needs where term financing is appropriate
Do ACAs
make home loans?
ACAs make loans for both the purchase and construction of moderately
priced homes located in rural areas. They also finance rural homesites
upon which a home will be constructed in the future.
Who can
borrow from an ACA?
Anyone owning or purchasing rural property or who is engaged in
farming, ranching, timber or other ag-related businesses may be
eligible. This includes individuals, partnerships and corporations.
People who farm part time also are eligible. Additionally, individuals
may obtain financing for rural residences or recreational property.
Loan approval and terms are subject to the creditworthiness of the
applicant(s) and the collateral offered.
How will
an ACA loan benefit me?
Borrowers of an ACA become part-owners in the association through
stock purchases determined by the amount of the loan. Borrowers
have the right to vote on co-op decisions, including the election
of its board of directors.
How much
can I borrow?
Whether you are a young farmer just starting out or a large corporation,
the association is capable of meeting your financing needs. The
association has alliances with other associations to make even large,
complex agribusiness loans. When assessing a loan application, loan
officers consider these primary factors: the individual, financial
responsibility, repayment capacity, loan purpose and security offered.
What determines
the time or method of repayment?
Primarily, the nature of the loan, its purpose and the financial
capacity of the customer determine repayment options. Repayments
may be set up to coincide with the marketing of crops or livestock.
They also may be paid in installments from farm operations or non-agricultural
sources.
What form
of collateral is required?
All real estate loans must be secured by a first mortgage, generally
on the farm, ranch or rural home that is financed by the loan. Collateral
requirements on livestock and equipment loans vary.
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