Questions about Plains Land Bank?

What does it means to be a stockholder of this Cooperative?

The Plains Land Bank’s success will benefit you in return!  This is the philosophy behind their patronage program and a basic financial reason for doing business with a Farm Credit lending cooperative. According to Plains Land Bank, “Every borrower is a stockholder of the cooperative and receives part of the earnings.” No other type of lender offers you the same benefit.

What types of loans do they offer?

Plains Land Bank offers flexible loan terms including long-term repayment plans with variable rates or a variety of fixed interest rates.  They also offer loan programs for young, beginning, or small farmers.

“Plains Land Bank, FLCA offers a variety of flexible loan programs to meet all of your rural real estate financing needs, with terms ranging from 5 years to 20 years. Payments can be annual, semi-annual, quarterly or monthly.”

The 4-1-1 on Patronage

The more you borrow, the larger your share of the bank’s earnings. Any borrower from Plains Land Bank is a part-owner in the association through stock purchases determined by the amount of loan you take out.  A borrower has the right to vote on co-op decisions, including the election of the board of directors.  As explained, Plains Land Bank is a cooperative, and because of this, profits are often returned to its stockholders as patronage payments.

Every year, Plains Land Bank’s board of directors decides how much of the earnings from the previous year needs to be maintained as capital to fund growth.  When that capital is set aside the board may approve the patronage to be paid 100 percent in CASH.  There is no membership or special sign up for patronage; it is a benefit automatically distributed to stockholders.

“Plains Land Bank customers share in our association’s financial success because they are the owners. Our cooperative business structure allows our board of directors to pass along our profits in the form of patronage payments to our borrowers, returning a portion of the interest they have paid on their loans.”

If you take out a 1-million-dollar loan at 5%, the interest you will pay is $50,000.  If patronage returns 20% (on average), then you will receive $12,000 which is a payment and a half!A Numerical Example of Patronage

FAQ

How much money will I be required to put down with a Plains Land Bank loan? 

• Typically, 20-25% of the price of the loan.

How do you make payments to a land bank?

• Payments are made in the same way you would make payments on a normal home mortgage.  This is by a monthly payment.

What type of loans are not able to be financed by a land bank? 

• In general, land banks cannot make loans to properties in town (specifically on homes in towns with a population greater than 2,500).

Can Plains Land Bank make loans for mobile homes?

• No, mobile homes depreciate in value at a rapid rate, and are not always considered “property.”

Is the Plains Land Bank regulated by the government?

• Yes, but in different ways than other banks.  Plains Land Bank is regulated by Federal Credit Association (FCA).

Is the Plains Land Bank funded by the government?

• No, Plains Land Bank is funded through Farm Credit Bank of Texas.

Does Plains Land Bank sell their loans to secondary markets?

• No, all loans are kept in house at Plains Land Bank.  Farmers can be assured that their first and last loans will both be made to Plains Land Bank.

What is the minimum number of acres to finance a barn-do? 

• There is no minimum, Plains Land Bank has financed on 1.5 acres before.

What is the max value of home that PLB can give a loan for? 

• The home price cannot exceed $269,000.

How can I get around this price limit?

• If the house is on land that is over 20 acres, then PLB CAN give you a loan since at that point, it is considered a farm loan.

Can Plains Land Bank finance homes in a city?

• If the city has a population less than 2,500 (and home is under $269,000), then PLB can finance the loan.

Can someone co-sign a note?

• Yes, you can have co-signers.

Does Plains Land Bank require a survey?

• PLB does not require a survey if they have a good legal description of the property.

Can Plains Land Bank do a pre-approval letter?

• PLB does the pre-approval letters based on credit.  They need a 1 year tax return, and an overview of credit.  The letter will say Plains Land Bank will ‘consider them for a loan’.  This can benefit a buyer when an offer is made.

Can Plains Land Bank pre-approve someone for an auction?

• Yes, PLB can pre-approve.  It will be a 75% loan to value.  The factors include Estimated AV, which is sales price, and an address.  They will need a contract to have the address.

Who can I apply for a land bank loan with if I live in Lubbock, TX, or surrounding area?

Who can I apply for a land bank loan with if I live in Southern New Mexico?

Who can I apply for a land bank loan with if I live in Western Oklahoma?

• The answer to all three of the above questions is the same:  Call Plains Land Bank and they can refer you to one of their farm credit partners in your territory.  If the buyer lives within our boundaries, or the property is in our territory, we can finance your loan!

Did you know?

• Before it’s current name, Plains Land Bank was also known as ‘Panhandle Plains Land Bank’ and before that, it was called ‘Panhandle Plains Federal Land Bank’.
• Plains Land Bank covers 17 counties, but they can give a loan outside of their area if the customer lives in the bank’s coverage area.
• The difference in Plains Land Bank and Ag-Texas, is that PLB focusses 100% on long-term real estate and farm and ranch lending.  They do not take operating loans.

Apply Now

Visit Plains Land Bank’s website at https://www.plainslandbank.com/apply-now/ and click on the loan application link.

Find More Information

Visit PLB’s website at https://www.plainslandbank.com/.

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