OAR 813-020-0025
Program Loans
(1)
A loan under the Single-Family Mortgage Program is eligible for purchase by the Department:(a)
If the borrower holds title to the single-family residence in fee simple or in another form of ownership acceptable to the Department; and(b)
If the loan:(A)
Meets to the satisfaction of the Department the requirements in the purchase agreement between the Department and the lender;(B)
Has a final maturity at least fifteen and not more than forty years from the date of its making;(C)
Is secured by a first lien deed of trust granted by the borrower on the single-family residence financed by the loan; and(D)
Is made solely to finance the purchase, construction or purchase and rehabilitation of an existing or newly constructed single-family residence for use as the permanent, principal residence of the borrower.(2)
A loan may not be made under the program to refinance an existing loan unless the existing loan is a temporary loan with a loan term of 24 months or less for constructing or rehabilitating a single-family residence. The temporary loan also must have been made on or after the commencement date of the commitment term during which the program loan is sold to the Department. If a program loan is made to refinance such a loan, the lender shall certify to the Department that construction or rehabilitation has been satisfactorily completed before the delivery of the program loan for purchase.(3)
A lender may execute a program loan with a borrower only on forms approved by the Department and in a manner satisfactory to the Department. The forms must prescribe program loan requirements regarding insurance, escrow payments, late charges, deficiencies, defaults, priority of liens and similar matters.(4)
The Department may purchase a program loan with a graduated or other payment schedule based on criteria established by the Department.(5)
A program loan is subject to prepayment at the Department’s option if at any time the borrower does not reside in the residence financed by the program loan but remains the owner of the residence, or if the lender or Department determines that the borrower was ineligible at the time the loan was made.(6)
To establish the interest rate for a program loan, the Department shall consider the rates of interest on the bonds, prevailing rates for similar loans and the ability of borrowers under the program to afford such rates.(7)
The original principal amount of a program loan and any secondary financing may not exceed 97 percent of property value unless the program loan is insured by the Federal Housing Administration or a qualified mortgage insurer, or guaranteed by the Veterans’ Administration or USDA Rural Development. Property value must be calculated on the lesser of the purchase price of the property or its appraised value.
Source:
Rule 813-020-0025 — Program Loans, https://secure.sos.state.or.us/oard/view.action?ruleNumber=813-020-0025.