Land Financing Rates For 2021
Alabama Ag Credit (AAC) is affiliated with the over 100-year-old nationwide Farm Credit System and is a stockholder owned cooperative. That means that when someone obtains a loan with Alabama Ag Credit they become a stockholder of the association and a portion of those earnings is returned to them through the AGC patronage program, as determined by their board of directors. They provide financing for farm, timber and forestry operations, rural real estate, agribusiness, equipment, livestock, recreational and hunting land. and they offered up a recent update on land financing rates for Alabama.
At closing you make a one-time Alabama Ag Credit stock purchase and that stock ownership entitles you to share in the co-op profits, lowering your loan’s total interest cost. When your loan is paid off, the cost of the stock is refunded to you.
In other words, when you borrow from Alabama Ag Credit, you become a stockholder and part owner in the cooperative, entitling you to a portion of the earnings (patronage) when the association does well financially. The more you borrow, the bigger your share of earnings.
Alabama Ag Credit doesn’t sell its loans on the secondary market like a lot of other financial institutions. When you have a 20-year loan with Alabama Ag Credit, it owns your loan for 20 years and that loan stays with them.
As part of the farm credit system one of AAC’s missions is to service rural Alabama and provide financing for people who want to buy acreage, be it 20 acres for a homestead or more acreage. While it specializes in financing rural and farm land they can finance a residence as long as it is outside of city limits and meets other Farm Credit System requirements.
One of Alabama Ag Credits popular financial products is their 20-year fixed rate loan with a 15% down payment. For rural homesites, the standard is a 15 year loan with 15% down.
At AAC, the terms of a land and rural residential loan, such as interest rate and down payment, depend on the applicant’s unique underwriting factors and a number of components, including credit, financials, loan-to-value, the type of property, the length of term, the market conditions and other factors.
One of the things that differentiates Alabama Ag Credit is that they have a complete sheath of services which makes life easier for the customer and ensures a shorter buying and closing process. For example, one of those benefits that AAC offers is that it has its own appraisal department, which results in a shorter turn-around time for the whole transaction and is also economical.
Alabama Ag Credit is headquartered in Montgomery and has nine offices across the state.
Current Alabama Ag Credit Land Financing Interest Rates
AAC has terms up to 30 years with rates between 4.0% to 5.5% depending on the fixed rate period.