Anyone else finance land through Capital Farm Credit?

[TominTX]

Was curious about something and thought I would run it by everyone and see if anyone else has input. We financed our land purchase via Capital Farm Credit, and again later added to that land by refinancing through Capital Farm Credit and wrapping both pieces up into one loan. I have no complaints about them, they were great to work with and everything was smooth, both times. Our interest rate is a little higher than we might have got through a regular bank, but we get a patronage refund every year that is the equivalent of about 2 payments, so with that calculated in, the interest rate is a little less than we would have had from a bank. And the "surprise" check in the mail once a year always seems to come at a really good time.

My question is this. Along with the patronage refund comes a statement, the statement lists "Qualified" and "Non-Qualified" surplus. The qualified surplus is what they refund you in the attached check. The non-qualified surplus is profit that the co-op made and is technically holding and can be refunded at a later date at the discretion of the board of directors. Has anyone who may have a loan through them, or possibly another farm credit bureau, ever received any of those "Non-Qualified" funds? That balance continues to grow year after year and has reached a very significant number. I'm just wondering if it's worth getting my hopes up that they will ever actually give me any of that back?

Like I said, overall I'm happy with them, but every time I get that statement I wonder...

 

[Lucky]

We use Lone Star Ag Credit wich I think is the same thing as Capitol Farm Credit. The patronage check as you say is always nice. Several years ago during the down turn they came out in January and said there wouldn't be a patronage check this year. This put allot of big operators in a bind, made it hard for allot of smaller operators, and just po,d customers in general. Later that year Lone Star found some money and we all got a check. I've never looked at the holdings you speak of but this is probably were the mystery money came from.

It's interesting you say they rolled a couple loans into one for you. I've got 4 land loans with them. They don't want me to consolidate them so I write 4 checks every month and send them in one envelope. At one time I had cows at home and cows at a lease place and had two separate loans on them as well.

 

[TexasBred]

Was curious about something and thought I would run it by everyone and see if anyone else has input. We financed our land purchase via Capital Farm Credit, and again later added to that land by refinancing through Capital Farm Credit and wrapping both pieces up into one loan. I have no complaints about them, they were great to work with and everything was smooth, both times. Our interest rate is a little higher than we might have got through a regular bank, but we get a patronage refund every year that is the equivalent of about 2 payments, so with that calculated in, the interest rate is a little less than we would have had from a bank. And the "surprise" check in the mail once a year always seems to come at a really good time.

My question is this. Along with the patronage refund comes a statement, the statement lists "Qualified" and "Non-Qualified" surplus. The qualified surplus is what they refund you in the attached check. The non-qualified surplus is profit that the co-op made and is technically holding and can be refunded at a later date at the discretion of the board of directors. Has anyone who may have a loan through them, or possibly another farm credit bureau, ever received any of those "Non-Qualified" funds? That balance continues to grow year after year and has reached a very significant number. I'm just wondering if it's worth getting my hopes up that they will ever actually give me any of that back?

Like I said, overall I'm happy with them, but every time I get that statement I wonder...

I've never used them but That figure could represent funds in various reserve accounts for losses.

 

[TominTX]

I've never used them but That figure could represent funds in various reserve accounts for losses.

Shortly after I posted this, the annual report came. It's about a 50 page book.... I studied it pretty close and found where they released some of the reserve funds last year from 2012 (if I remember correctly.) So you are correct, they are reserve funds, and chances are good that you will eventually see them if you stay on as a shareholder/customer. It's a significant amount, so if you factor in the patronage refund that I received this year (amount was larger than 2 months payments) and then factor in the fact that chances are good that I will see some of those funds in the later years of the loan, I'm happy with my decision to go with them.

 

[Peace]

We use Lone Star Ag Credit wich I think is the same thing as Capitol Farm Credit. The patronage check as you say is always nice. Several years ago during the down turn they came out in January and said there wouldn't be a patronage check this year. This put allot of big operators in a bind, made it hard for allot of smaller operators, and just po,d customers in general. Later that year Lone Star found some money and we all got a check. I've never looked at the holdings you speak of but this is probably were the mystery money came from.

It's interesting you say they rolled a couple loans into one for you. I've got 4 land loans with them. They don't want me to consolidate them so I write 4 checks every month and send them in one envelope. At one time I had cows at home and cows at a lease place and had two separate loans on them as well.

I believe having them separate is good for you...mostly from a series of bad events point of view. If things go bad, you could sell off the parcels by themselves and not have one giant item to sell because they're all tied together.