ORS 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

(1)

Money received as a loan under this chapter shall be used only for the acquisition of a home or farm.

(2)

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 balance of the loan.

(3)

When the Department of Veterans’ Affairs determines that a borrower is using loan moneys in violation of this section, the department shall immediately commence any action or proceeding necessary to recover for the state those moneys or any property obtained therewith.

(4)

A failure by a borrower to move into the home or farm securing the borrower’s loan and to use it as the borrower’s principal residence within 60 days after the loan or assumption is made, or within such extension as may be granted in writing by the department, shall be conclusively presumed to constitute a violation of this section. A request for an extension for good cause shall be made in writing within the 60-day period. The applicant may file a written request for a hearing within 30 days after a denial of the request for extension.

(5)

The department may not approve any rental or lease of a home or farm that affects the federally tax exempt status of bonds issued under Article XI-A of the Oregon Constitution. When the rental or lease does not affect the federally tax exempt status of such federally tax exempt bonds, the department may approve in writing the rental or lease of a home or farm after the home or farm is used as the principal residence of the borrower. The department may establish factors to consider when determining whether to approve the rental of a home or farm. [Formerly 407.042; 1987 c.767 §3; 1991 c.262 §2; 1995 c.238 §7; 1999 c.46 §1; 2001 c.98 §1; 2005 c.625 §42]

Source: Section 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, https://www.­oregonlegislature.­gov/bills_laws/ors/ors407.­html.

Notes of Decisions

Under former similar statute

Use of property as “farm” does not prohibit veteran from having “home” on property. Director of Veterans’ Affairs v. McPherson, 59 Or App 492, 651 P2d 175 (1982), Sup Ct review denied

407.075
Purpose
407.085
Definitions
407.087
Definition of “veteran.”
407.095
Policy against foreclosure
407.125
Loans to qualified person
407.131
Discount of principal
407.135
Authority of department
407.145
Purchase and control of property
407.155
Execution and custody of documents
407.165
Authority to hold certain funds received from borrower
407.169
Escrow accounts
407.177
Loan processing and servicing contracts with lending institutions
407.179
Additional powers delegated to lending institution
407.181
Authority of lending institution
407.185
Cash flow projection
407.195
Loans not being amortized
407.201
Required disclosure of credit information and loan terms
407.205
Application for loan
407.215
Certain loans excludable from maximum loan amount
407.225
Processing of loan application
407.275
Terms of loan to veteran and transferee
407.285
Rate of interest payable by certain transferees
407.295
Transfer to spouse
407.305
Assumption of previous loan by eligible veteran
407.315
Interest rate for veteran’s assumption
407.325
Rate of interest on loans
407.327
Department to prescribe fixed or variable interest rates
407.335
Rate of interest payable by transferee
407.349
Late charges authorized for periodic payments
407.375
Sale of foreclosed properties
407.377
Sale or management of foreclosed property under personal services contract
407.385
Prohibition against using loan for purpose other than farm or home acquisition
407.415
Issuance of bonds
407.425
Factors considered before requesting bond issuance
407.435
Issuance of bonds for tax payment
407.465
Loan cancellation life insurance
407.475
Persons insurable under ORS 407.465
407.480
Definitions for ORS 407.480 to 407.490
407.485
Agreements for mortgage insurance
407.490
Mortgage insurance claims
407.495
Oregon War Veterans’ Fund
407.505
Loan moneys to be reserved for borrower prior to loan commitment
407.515
Oregon War Veterans’ Bond Sinking Account
407.525
Transfer of sinking account moneys to veterans’ fund
407.555
Auditing and payment of claims
407.565
Revolving account
407.595
Loans not subject to execution or assignment
Green check means up to date. Up to date