FREQUENTLY ASKED QUESTIONS

Alabama Farm Credit is part of the Farm Credit System, a nationwide network of  financing cooperatives that lend to agricultural and rural America.

Alabama Ag Credit is an Agricultural Credit Association (ACA) headquartered in Montgomery, Alabama. We have 9 offices conveniently located throughout Alabama.

An Agricultural Credit Association, or ACA, is a financial service provider specializing in loans on farms, ranches, timberland, recreational property, agribusinesses, rural homes, agricultural equipment, livestock and agricultural operating capital. ACA's are cooperatively owned and locally operated.

Everyone obtaining a loan through Alabama Ag Credit becomes an owner of the association through the purchase of stock equal to 2 percent of their loan amount or $1,000, whichever is less. Funds for the stock can be included in the loan. Ownership of this stock gives you the right to participate in the business affairs of the association, including election of the board of directors. Traditionally, customers are paid patronage and/or dividends, which further reduces the cost of borrowing for our customers. When the loan is paid off the stock is then refunded in full.

Alabama Ag Credit follows the fundamental cooperative principle of sharing its earnings with its customer-stockholders in the form of patronage when it does well. Thus, a patronage refund is a distribution of the association's earnings — minus net expenses and necessary reserves — made to the cooperative's stockholders. The board of directors determines annually if the association will pay a patronage refund and the total amount of that refund.

Alabama Ag Credit is directed by a board elected by the stockholders of the association. The directors employ professional personnel to manage the operations of the association and oversee the association's fiscal responsibility through an audit committee. The association operates under policies and procedures adopted by the board of directors and management team.

Commercial farmers, land investors, part time farmers, rural homeowners, any person or legal entity who is involved or plans to become involved in agriculture or in the ownership of agricultural or rural property is eligible to apply for a loan. Loan approval and terms are subject to the creditworthiness of the applicant.

Yes, we make loans for the purchase, construction and improvement of homes located in rural areas. We also finance rural home sites upon which a home will be constructed in the future.

All real estate loans must be secured by a first lien mortgage on real estate; generally the farm, ranch, agribusiness facility or home that is financed by the loan. Operating, livestock and equipment are generally secured by crops, livestock, equipment, receivables or other assets of the operation being financed.

The type, financial strength and repayment ability of the collateral of the applicant will determine the total amount that can be borrowed. Applicants for real estate purchases loans should plan to invest at least 20% of the purchase price. Loan applicants that plan to secure their loans with livestock, equipment or other types of chattel property should also plan to have similar initial investments.

As a cooperative, Alabama Ag Credit is owned by its customers, who in turn share in our financial success. Since 1996, Alabama Ag Credit has distributed almost $35,823,878 million in dividends, stock reductions and patronage refunds to our customers. These capital distributions reduce the effective interest rate paid by our customers.

Alabama Ag Credit is a part of the nationwide Farm Credit System and is affiliated with the Farm Credit Bank of Texas located in Austin, Texas. The Farm Credit Bank provides funding for loans by selling AAA-rated bonds to investors in the nation's money markets.