Federal Land Bank Law and Legal Definition
Federal land banks are regional banks established by Congress to provide mortgage loans to farmers. These banks established for the purpose of keeping permanent supply of money available for home financing. This is one of 12 banks under the U.S. Farm Credit Administration. The bank extends long-term mortgage credit to crop farmers and cattle raisers for buying land, refinancing debts, or other agricultural purposes. The bank issues long term credit options for farmers. The loan is given to consolidate debt, purchase farming land, purchasing farming equipment and food for livestock.
The farmer applying for the loan must meet the following conditions:
- must purchase stock in one of the 500 land bank associations; and
- must purchase stock in the Federal Land Bank.
The stock is retired when the loan is repaid. The banks raise funds by issuing consolidated system wide bonds to the public.
