Tyler Ag

Summary

In this informative session, Tyler Rosser, the credit office president of AG Trust Bank's Sherman branch, discusses the bank's specialization in financing farm and ranch properties in North and Central Texas. He highlights the bank's customer-owned cooperative structure, offering long-term fixed rates and patronage dividends, which can reduce effective interest rates for borrowers. Tyler also addresses partnership loans, credit score requirements, and the bank's flexibility in handling changes to loan applications. The conversation covers the bank's quick pre-qualification process, its coverage area, and its ability to refinance loans to match market rates, providing valuable insights for potential borrowers.

Takeaways

• 😀 Tyler Rosser is the credit office president of the AG Trust Farm Credit Sherman branch office, specializing in financing farm and ranch tracks in North Texas and New Mexico.
• 🏢 AG Trust Bank has been in operation since the early 1900s, created via the Farm Credit Act, and is a customer-owned cooperative, which means they pay back patronage dividends to customers.
• 📈 AG Trust offers long-term fixed rates, including 20 or 30-year fixed rates on raw land, which is a unique service compared to typical banks or mortgage companies.
• 💰 They provide financing for cattle purchases and agricultural operations, as well as the occasional smaller tracts of land, fitting what they call a 'rural lite loan'.
• 🏘 For properties over 10 acres, the standard terms for a strong borrower include a 20% down payment and a 20-year loan term.
• 🔍 AG Trust has in-house appraisers who specialize in rural property, providing a consistent and knowledgeable service across the state.
• 🤝 They are open to joint applications, such as partnerships or families buying property together through an LLC, with a preference for not overcrowding small properties.
• 📋 The minimum credit score for an application is 680, and exceptions may be considered for lower scores on a case-by-case basis.
• ⏱ The typical timeline for closing a file is 30 days from application, with changes such as adding an LLC or a borrower being manageable up to a week or two before closing.
• 📈 Interest rate conversion is available for borrowers to lower their rate to the market rate if the Federal Reserve cuts rates or market conditions change, typically for a flat fee.
• 📝 AG Trust's coverage area includes specific counties around the Dallas-Fort Worth area and extends to other parts of Texas, with the ability to finance properties anywhere in the state for customers in their counties.

Q & A

Who is Tyler Rosser and what is his role at AG Trust Bank?

Tyler Rosser is the credit office president of the AG Trust Farm Credit Sherman branch office. He has been with the association for over eight years and specializes in financing farm and ranch tracks in North Texas, Central Texas, and Northeast Texas, extending to areas west towards Abilene and Sweetwater, as well as in the state of New Mexico.

What is unique about AG Trust Bank's business model?

AG Trust Bank is a customer-owned cooperative, which means they pay back a patronage dividend to their customers. This can result in customers receiving a portion of their interest back each year, effectively reducing their loan's effective interest rate.

What types of loans does AG Trust Bank specialize in offering?

AG Trust Bank specializes in offering long-term fixed-rate loans for financing farm and ranch land, as well as cattle purchases and agricultural operations. They can also occasionally provide loans for smaller tracts of land, fitting what they call a rural site loan.

How does AG Trust Bank's approach to lending differ from typical banks or mortgage companies?

AG Trust Bank can offer long-term fixed rates, such as 20 or 30-year fixed rates on raw land, which is not commonly offered by typical banks or mortgage companies. They also have a consistent stream of financing due to their GSE status, allowing them to lend year-round without worrying about deposit levels.

What is the minimum credit score required for an application at AG Trust Bank?

The minimum credit score required for an application at AG Trust Bank is 680. If an applicant's credit score is below this, they may still be considered, but it could be more challenging and may require exceptions.

What is the standard down payment requirement for a loan from AG Trust Bank?

For a strong borrower, AG Trust Bank typically requires around 20% down payment for a loan on a farm or ranch track. For home site loans on properties under 10 acres, the term is usually 15 years, which might result in slightly higher payments but quicker payback and less interest overall.

How does AG Trust Bank handle joint applications, such as those involving partnerships or LLCs?

AG Trust Bank is open to joint applications, including those involving partnerships or LLCs. However, they prefer not to have too many people on a small piece of property to maintain the family property feel. They typically look for a minimum of about 10 acres per person in such cases.

What is the process for obtaining a pre-qualification letter from AG Trust Bank?

To obtain a pre-qualification letter, a customer needs to provide high-level information such as their annual income, estimated credit score, and ability to make a 20% down payment. AG Trust Bank can then produce a pre-qualification letter based on this information, which is subject to a credit check and receipt of financials.

How does AG Trust Bank handle interest rate changes after a loan has been taken out?

AG Trust Bank offers an interest rate conversion, which is an in-house note modification. If market rates drop and the borrower is performing well, they can lower the rate to the market rate for a flat fee, without needing a full refinance.

What is the typical timeline for closing a loan with AG Trust Bank?

The typical timeline for closing a loan with AG Trust Bank is 30 days from the application. However, if a contract is signed and not acted upon for a couple of weeks, it could result in a rush to close within the remaining time.

Can AG Trust Bank finance property outside of their standard service areas?

While AG Trust Bank has specific service areas, they can finance property anywhere in the state for customers living in their counties. If a customer lives in one of the counties they service, they can finance property in other areas, including Oklahoma and South Texas.

Does AG Trust Bank accept gift funds as part of the down payment for a loan?

Yes, AG Trust Bank can accept gift funds as part of the down payment on a case-by-case basis. They require a gift letter from the family member certifying that it is a true gift with no repayment required.

What happens to the patronage dividend after a property is sold?

Even after a property is sold, the former owner will still receive a patronage dividend for the period they owned the property. The dividend is typically issued in March or April for the prior year.

Can foreign investors or those on a working visa apply for a loan with AG Trust Bank?

Foreign investors and those on a working visa can be considered on a case-by-case basis. The bank needs to be able to project cash flow on eligible borrowers, which may require legal advice and assessment of the individual's status in the visa process.

Does AG Trust Bank offer any special programs for veterans?

While there is no specific program like the VA loans for traditional mortgage lenders, AG Trust Bank can be aggressive on terms for borrowers they wish to work with, including veterans.

Can AG Trust Bank provide loans for purchasing agricultural equipment?

Yes, AG Trust Bank can assist with loans for purchasing equipment that will be operated on the borrower's property. The terms typically match those of traditional equipment or vehicle notes, often ranging from four to six years.