Chapter 407 Veterans Loans

The provisions of this chapter are intended to carry out the purposes of Article XI-A of the Oregon Constitution. The Legislative Assembly recognizes that its authority to define the scope and purpose of this chapter is limited by the purposes expressed in Article XI-A. The primary purpose of this chapter is to provide loan funds to qualifying Oregon vetera…

407.076 [1955 c.102 §§4,5,6; 1969 c.433 §1; 1979 c.35 §1; 1979 c.238 §2; renumbered 407.475]

407.080 [Amended by 1975 c.219 §6; renumbered 407.135]

407.085 Definitions

As used in this chapter: “Acquisition” means the purchase, improvement or refinancing of a home or farm or the payment of down payments or closing costs for such purposes. “Bonds” includes, but is not limited to, serial bonds, term bonds, notes, obligations, lines of credit, revolving credit agreements, loans, financing agreements or other evidence of inde…

407.087 Definition of “veteran.”

As used in Article XI-A of the Oregon Constitution and this chapter, “veteran” means a person who: Served on active duty with the Armed Forces of the United States: For a period of more than 90 consecutive days beginning on or before January 31, 1955, and was discharged or released from active duty under honorable conditions; For a period of more than 178…

407.095 Policy against foreclosure; rules

It is the policy of the State of Oregon to make every reasonable attempt to keep a veteran in the home purchased under the loan program when the veteran is unable to make required loan payments because of illness, injury, death, involuntary job loss or economic stress due to factors beyond individual control. The Department of Veterans’ Affairs, by rule, sha…

407.100 [Renumbered 407.155]

407.110 [Renumbered 407.595]

407.115 [Formerly 407.020; 2005 c.625 §17; repealed by 2019 c.223 §24]

407.120 [Amended by 1975 c.219 §8; renumbered 407.165]

407.125 Loans to qualified person

All moneys in the Oregon War Veterans’ Fund created by ORS 407.495 may be advanced by the Department of Veterans’ Affairs as loans to any person qualified for loans under the provisions of Article XI-A, section 3, Oregon Constitution, for the acquisition of farms and homes, as provided in this chapter.

407.129 [1987 c.509 §§2,3; repealed by 1993 c.159 §1]

407.130 [Amended by 1967 c.369 §2; 1979 c.115 §1; repealed by 1981 c.660 §18]

407.131 Discount of principal; rules

The Department of Veterans’ Affairs, by rule, may discount a portion of the principal payable to the department in connection with a home or farm loan or in connection with a purchase contract for a home or farm if such action results in economic benefit to the home and farm loan program after considering the time value of money.

407.135 Authority of department; disposition of certain moneys

The Department of Veterans’ Affairs is authorized and empowered, in the name and in behalf of the state, to make or participate in the making of residential loans under this chapter; to undertake commitments to make residential loans; to purchase and sell residential loans; to commence and prosecute to judgment all suits, actions and proceedings necessary to…

407.140 [Amended by 1975 c.462 §12; 1981 c.660 §36; renumbered 407.415]

407.145 Purchase and control of property; disbursements to protect security

The Department of Veterans’ Affairs may acquire property by purchase when the acquisition of such property is necessary to protect the interest of the state because of default in repayment of loans made in accordance with ORS 407.125 or statutes supplementary thereof. The department shall exercise control of all the property while the title remains vested in…

407.150 [Repealed by 1981 c.660 §18]

407.155 Execution and custody of documents

All deeds, leases, contracts, releases of mortgages and other instruments necessary or proper in the administration of this chapter shall be executed in behalf of the state by the Department of Veterans’ Affairs and shall be acknowledged by the department; and all deeds, mortgages, notes, insurance policies, abstracts and other instruments, documents and pap…

407.160 [Amended by 1967 c.335 §49; 1967 s.s. c.19 §2; 1983 c.798 §10; renumbered 407.495]

407.165 Authority to hold certain funds received from borrower

The Department of Veterans’ Affairs may receive and hold for future disposition conditional payments from borrowers who have executed mortgages or trust deeds under authority of ORS 407.225, indemnities for fire losses on secured property, and such other sums as must be held by the department in suspense pending further or final disposition thereof. Said fun…

407.169 Escrow accounts; standards; interest; rules

The Department of Veterans’ Affairs shall make escrow accounts available to current and future borrowers and contract purchasers in connection with loan agreements and purchase contracts made under this chapter. Escrow accounts established under this section shall be consistent with general lending and servicing standards for real estate loan agreements in …

407.170 [Amended by 1967 c.335 §50; 1981 c.660 §37; renumbered 407.515]

407.175 [Formerly 407.055; repealed by 1995 c.238 §8]

407.177 Loan processing and servicing contracts with lending institutions; terms; procedures

When the Department of Veterans’ Affairs considers such contracts necessary to improve the financial condition of the loan program conducted under this chapter, the department is authorized to enter into contracts with lending institutions under which the lending institutions may provide any of the following services: Processing of new loans and purchase co…

407.179 Additional powers delegated to lending institution; authority retained by department

In addition to the powers described in ORS 407.177, the Department of Veterans’ Affairs also may delegate by contract to a lending institution any of the powers granted to the department in ORS 407.165 and 407.225. The department shall retain final authority to approve or disapprove loans and interpret the duties and responsibilities of borrowers under this …

407.180 [Renumbered 407.525]

407.181 Authority of lending institution

In exercising the authority granted to it by ORS 407.177 to 407.181, a lending institution shall perform only the services that are delegated to it by contract entered into under ORS 407.177, and shall comply with the terms of the contract and applicable laws.

407.183 [1967 s.s. c.1 §2; 1967 s.s. c.19 §1; 1969 c.615 §6; renumbered 407.535]

407.185 Cash flow projection; annual review; report

In addition to, and not in lieu of, the audit required by ORS 297.210 the Department of Veterans’ Affairs may contract with an independent public accountancy organization for a review of the cash flow projection for the loan program established under this chapter and Article XI-A of the Oregon Constitution and of the assumptions used in developing that proje…

407.186 [1967 s.s. c.1 §3; renumbered 407.545]

407.190 [Amended by 1967 c.454 §45; 1971 c.80 §3; renumbered 407.555]

407.195 Loans not being amortized; identification; notice to borrowers

The Director of Veterans’ Affairs shall identify each farm or home loan made under this chapter with moneys from the Oregon War Veterans’ Fund which, at the current rate of payment by the borrower, is not being amortized or will not be fully amortized by the agreed to date. The director shall notify each borrower making payments on a loan identified under s…

407.200 [Amended by 1967 c.189 §1; 1971 c.80 §4; 1983 c.740 §128; renumbered 407.565]

407.201 Required disclosure of credit information and loan terms

When making a loan or otherwise extending credit under this chapter with moneys from the Oregon War Veterans’ Fund, the Department of Veterans’ Affairs shall comply with Title I (Truth in Lending Act) of the Consumer Credit Protection Act, as amended (15 U.S.C. 1601 et seq.) in the same manner required for a bank or national bank, as defined in ORS 706.008, …

407.205 Application for loan; amount of loan; limit on number of loans

A person qualified under Article XI-A, section 3, of the Oregon Constitution, to apply for a loan for the acquisition of a home or farm must submit the application to the Department of Veterans’ Affairs pursuant to the provisions of this chapter. An applicant may not borrow more than the maximum amount allowed for a loan under this section. The maximum amo…

407.210 [Amended by 1963 c.9 §23; renumbered 407.575]

407.215 Certain loans excludable from maximum loan amount

No applicant is entitled to borrow more than the maximum amount allowed under ORS 407.205 other than for reasons specified in ORS 407.205 except that when the property on which the loan was made becomes the property of the applicant’s spouse as a result of a judgment declaring a marriage void or dissolved and the loan is repaid, or remains unrepaid and there…

407.225 Processing of loan application; security

When the Department of Veterans’ Affairs receives an application pursuant to ORS 407.205, the department shall immediately process the application. The security for the loan must consist of the property to be acquired by the applicant and must be secured by a mortgage or trust deed in the full amount of the loan. The mortgage or trust deed must: Be either…

407.235 [Formerly 407.058; 1985 c.296 §4; repealed by 1995 c.238 §8]

407.245 [Formerly 407.061; repealed by 1995 c.238 §8]

407.255 [Formerly 407.048; 1987 c.652 §5; repealed by 1995 c.238 §8]

407.265 [Formerly 407.065; 1987 c.221 §1; 1997 c.214 §3; repealed by 2019 c.223 §24]

407.275 Terms of loan to veteran and transferee

A loan may be made bearing interest at the rate per annum prescribed as provided by ORS 407.325. A loan may be amortized over a period of not more than 40 years for a home other than a manufactured home. A loan for a manufactured home may be amortized over a period not exceeding the expected life of the manufactured home, as determined by the Department of V…

407.285 Rate of interest payable by certain transferees

Notwithstanding the repeal of section 5, chapter 11, Oregon Laws 1982 (first special session), during the term of a loan for which the interest rate was initially fixed under section 5, chapter 11, Oregon Laws 1982 (first special session), the Department of Veterans’ Affairs may periodically prescribe the interest rate to be paid by the transferee. However, …

407.295 Transfer to spouse; notice to department; notice of delinquent payment

When an ownership interest or possession of a home or farm securing a loan received under this chapter is transferred to the spouse or former spouse of the original borrower as a result of any judicial order or judgment, the Department of Veterans’ Affairs shall be notified in writing of the transfer by the transferee not later than 30 days after the transfe…

407.305 Assumption of previous loan by eligible veteran; additional funds; maximum amount

When a veteran who is eligible for a loan under this chapter and Article XI-A of the Oregon Constitution seeks to acquire a home or farm that is serving as security for a previous loan made under this chapter, the veteran may choose either to receive a new loan for the property or to assume the previous loan. If the loan balance for the loan being assumed do…

407.310 [Repealed by 1981 c.660 §18]

407.315 Interest rate for veteran’s assumption; variable rate; effect of rate on cash flow; rules

When a veteran assumes a previous loan under ORS 407.305, the interest rate to be paid by the veteran from the date of assumption shall be the rate per annum prescribed periodically by the Department of Veterans’ Affairs, taking into consideration the solvency of the loan program and the interest rates currently prevailing in this state for loans secured by …

407.320 [Repealed by 1981 c.660 §18]

407.325 Rate of interest on loans; rules

The Department of Veterans’ Affairs shall periodically prescribe the interest rate to be paid by an applicant for a home or farm acquisition loan with a fixed interest rate, taking into consideration the current value of the money, the solvency of the loan program and the effect of the rate on veteran applicants. The department shall periodically, during th…

407.327 Department to prescribe fixed or variable interest rates

The Department of Veterans’ Affairs may prescribe fixed or variable rates on the following: Loans or purchase contracts made after September 27, 1987, for acquisition of homes or farms. Obligations on loans or purchase contracts made on or before September 27, 1987, where ownership of the property subject to the loan or purchase contract is transferred aft…

407.330 [Repealed by 1981 c.660 §18]

407.335 Rate of interest payable by transferee; limit on transfers; rules

The rate of interest referred to in ORS 407.275 (2) shall be prescribed periodically by the Department of Veterans’ Affairs, taking into consideration the solvency of the loan program and the interest rates currently prevailing in this state for loans secured by residential property. However, a transfer may not be made at a rate lower than the interest rate …

407.340 [Amended by 1975 c.462 §13; repealed by 1981 c.660 §18]

407.345 [1982 s.s.1 c.12 §2; 1987 c.652 §7; repealed by 1991 c.262 §1]

407.349 Late charges authorized for periodic payments

When a periodic installment payment due under a loan agreement or purchase contract made pursuant to this section and ORS 407.169 or under a prior agreement or contract authorizing a late charge is not received by the Department of Veterans’ Affairs by the due date, the department may impose a late charge with respect to any such payment as prescribed in ORS…

407.350 [Repealed by 1981 c.660 §18]

407.355 [1983 c.219 §2; 1985 c.287 §2; 1987 c.661 §2; 1991 c.262 §3; repealed by 1995 c.238 §8]

407.360 [Repealed by 1981 c.660 §18]

407.365 [1983 c.219 §3; repealed by 1995 c.238 §8]

407.370 [Amended by 1975 c.614 §15; repealed by 1981 c.660 §18]

407.375 Sale of foreclosed properties; improvement in lieu of down payment; interest rate; redemption of property; rules

When the Department of Veterans’ Affairs offers for sale a home or farm obtained for and in behalf of the state under ORS 407.135 and 407.145 (1), the department shall provide notice of the proposed sale to prospective purchasers. The notice shall state the minimum bid that will be accepted. Subject to subsection (3) of this section, the department shall ac…

407.377 Sale or management of foreclosed property under personal services contract

If the Department of Veterans’ Affairs enters into any personal services contract under which any other person is authorized to sell or manage homes or farms obtained for and in behalf of this state under ORS 407.135 and 407.145 (1), then ORS 407.375 may not apply to the sale of such homes or farms by that person.

407.380 [Amended by 1967 c.335 §51; repealed by 1980 c.17 §1 and by 1981 c.660 §18]

407.385 Prohibition against using loan for purpose other than farm or home acquisition; prompt use of farm or home as principal residence; extension; exception; penalty

Money received as a loan under this chapter shall be used only for the acquisition of a home or farm. Except as provided in this section, use of all or any part of a loan received under this chapter for investment or any purpose other than the acquisition of a home or farm constitutes an act of default and results in immediate acceleration of the unpaid bal…

407.390 [Repealed by 1981 c.660 §18]

407.395 [1953 c.595 §1; repealed by 1981 c.660 §18]

407.397 [Formerly 407.043; repealed by 1985 c.296 §10]

407.400 [Repealed by 1981 c.660 §18]

407.410 [Repealed by 1981 c.660 §18]

GENERAL OBLIGATION BONDS

407.415 Issuance of bonds

In order to provide funds for the purposes specified in Article XI-A of the Oregon Constitution, the Department of Veterans’ Affairs may request the State Treasurer to issue bonds in accordance with the provisions of ORS chapter 286A.

407.420 [Amended by 1971 c.418 §12; repealed by 1981 c.660 §18]

407.425 Factors considered before requesting bond issuance

The Department of Veterans’ Affairs shall request the State Treasurer to issue bonds as provided in ORS chapter 286A whenever the department determines that bonds are to be issued under ORS 407.415. In order to meet the specific requirements of a selected group of applicants for loans under this chapter and before asking the State Treasurer to structure an i…

407.430 [Repealed by 1971 c.743 §432]

407.435 Issuance of bonds for tax payment; conditions; term

Notwithstanding the general obligation and revenue bond limits required by ORS 286A.035, the State Treasurer may issue general obligation bonds on behalf of the Department of Veterans’ Affairs in an amount not to exceed the amount reasonably expected to be advanced for the payment of taxes for veterans each tax year. Such bonds shall mature in no more than 1…

407.440 [Repealed by 1981 c.660 §18]

407.445 [1982 s.s.1 c.12 §3; repealed by 1991 c.262 §1]

LIFE AND MORTGAGE INSURANCE

407.465 Loan cancellation life insurance

Subject to the limitations provided for in this chapter, the Department of Veterans’ Affairs may provide loan cancellation life insurance for any person described in ORS 407.475. The insurance may insure the life of the person who receives or assumes the loan or who is the contract purchaser and the life of the spouse or former spouse of that person for all…

407.475 Persons insurable under ORS 407.465

Any person receiving or assuming a loan or making a contract under this chapter for the acquisition of a home or farm, and the spouse or former spouse of that person, may be insured under the insurance provided for by ORS 407.465 upon complying with such rules relating to that insurance as the director may adopt.

407.480 Definitions for ORS 407.480 to 407.490

As used in ORS 407.480 to 407.490: “Insurance” means any mortgage guarantee or mortgage insurance against financial loss by reason of: Collection activity; Foreclosure; or Foreclosure by the Department of Veterans’ Affairs under ORS 407.135. “Mortgage” includes a trust deed.

407.485 Agreements for mortgage insurance; terms; amount; required coverage

The Department of Veterans’ Affairs may enter into an agreement with any public or private organization or with any federal or state governmental agency to provide insurance for qualified mortgages. The terms of the agreement for insurance, including the amount of insurance and the premium therefor, shall be agreed upon by the department and the organizatio…

407.490 Mortgage insurance claims; liability of department

After assignment transfer and delivery by the Department of Veterans’ Affairs of all rights in the insured property to the organization or person providing insurance, the department shall not be liable to any borrower for any claim or grievance arising out of the insurance agreement or the loan agreement. FINANCES

407.495 Oregon War Veterans’ Fund; sources; uses

The money arising from the sale of each issue of bonds authorized under Article XI-A, section 2, of the Oregon Constitution, shall be deposited in the State Treasury and be credited to a special fund separate and distinct from the General Fund, to be known as the Oregon War Veterans’ Fund. In addition to the money arising from the sale of such bonds, the Or…

407.505 Loan moneys to be reserved for borrower prior to loan commitment

When the Department of Veterans’ Affairs determines that an applicant’s loan may be approved in accordance with this chapter, the department, before making a loan commitment, shall reserve an amount of money in the Oregon War Veterans’ Fund equal to the amount requested by the applicant to be used only for payment to the applicant which shall be set aside in…

407.510 [Repealed by 1967 c.421 §206]

407.515 Oregon War Veterans’ Bond Sinking Account; sources; use

The Oregon War Veterans’ Bond Sinking Account is created as a restricted account within the Oregon War Veterans’ Fund. The sinking account shall consist of: All moneys received as payments on principal and interest of loans made under ORS 407.125; All moneys received as accrued interest upon bonds sold; All moneys derived from tax levies provided for in O…

407.520 [Repealed by 1967 c.421 §206]

407.525 Transfer of sinking account moneys to veterans’ fund; retransfer

The Department of Veterans’ Affairs may transfer moneys in the sinking account, except those derived from tax levies and those received from the sale of refunding bonds, to the Oregon War Veterans’ Fund for the home and farm loan purposes of the Oregon War Veterans’ Fund or pay the moneys directly from the sinking fund for the home and farm loan purposes of …

407.530 [Repealed by 1967 c.421 §206]

407.535 [Formerly 407.183; repealed by 1987 c.652 §12]

407.540 [Repealed by 1967 c.421 §206]

407.541 [Repealed by 1967 c.421 §206]

407.545 [Formerly 407.186; repealed by 1987 c.652 §12]

407.550 [Repealed by 1967 c.421 §206]

407.555 Auditing and payment of claims

Except as provided in ORS 407.415, all claims duly approved by the Department of Veterans’ Affairs, incurred in pursuance of this chapter, shall be paid by warrants drawn upon the State Treasurer by the Oregon Department of Administrative Services upon the appropriate funds for the payment of such claims.

407.560 [Repealed by 1967 c.421 §206]

407.565 Revolving account

The Oregon Department of Administrative Services is authorized to draw a warrant on the Oregon War Veterans’ Fund in favor of the Department of Veterans’ Affairs in a sum not to exceed $2 million, which sum shall constitute an advance to be used in anticipation of the verified vouchers supplied in accordance with this section; and may be used only as a revol…

407.570 [Repealed by 1967 c.421 §206]

407.575 [Formerly 407.210; 1987 c.652 §11; repealed by 1991 c.220 §15]

407.580 [Repealed by 1967 c.421 §206]

407.582 [2008 c.18 §19; repealed by 2015 c.531 §1]

407.585 [2008 c.18 §20; repealed by 2015 c.531 §1]

407.590 [Repealed by 1967 c.421 §206]

MISCELLANEOUS

407.595 Loans not subject to execution or assignment

No right, payment or proceeds of any loan made under ORS 407.125 or statutes supplementary thereof shall be subject to garnishment, attachment or execution or the claim of any creditor; nor shall any such right or payment be capable of assignment except as may be necessary for completion of any loan applied for and then only under such rules and regulations …