March 30, 2015
NBSB cleared for federal loans to farmers
North Brookfield Savings Bank has received approval from a federal agency to underwrite and service government-backed loans to family farms in Worcester and Hampshire counties.
The bank, which operates in the Brookfields, Ware, Palmer and Belchertown, has secured “standard eligible lender” (SEL) status from the U.S. Department of Agriculture's Farm Service Agency for Massachusetts, the agency said in a statement. The SEL program admits lenders with experience in making and servicing farm loans, but that have little or no previous experience with guaranteed loans from the Farm Service Agency (FSA), the statement noted.
Under the FSA program:
- Lenders can provide agricultural credit to farmers who don’t meet a lender’s normal underwriting criteria.
- Agricultural producers apply for a guaranteed loan through a lender, and the lender arranges for the guarantee. FSA can guarantee up to 95 percent of the loss of principal and interest on a loan.
- Guaranteed loans can be used to buy or operate a farm.
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