Federal Farm Loan Act Law and Legal Definition

The Federal Farm Loan Act of 1916 is a U.S federal law. The Act provides loan to the farmers. This Act aims at allowing small farmers to be more competitive with larger businesses. Thus the Act established farm loan banks for farmers who are members of the Farm Loan Association.

The members of the association can borrow:

1. upto 50% of the value of the land; and

2. upto 20% of the value of their improvements.