Federal Agricultural Mortgage Corp is a government-sponsored enterprise known as Farmer Mac. It provides a secondary market for loans made in the rural United States, primarily mortgage loans on agricultural real estate and other agricultural loans. The company buys loans from the original lenders and securitizes them. The securities are either sold to investors, held by the company, or retained by the original lenders. The company receives the rights to the collateral securing the loans and in turn guarantees payment of principal and interest on the securities. The company's primary source of revenue is the interest spread between what it pays on the securities and what it receives on the underlying loans that it holds.
