(1) When the Department of Veterans Affairs receives an application pursuant to ORS 407.205 (Application for loan), the department shall immediately investigate and process it as provided by law. The security for the loan shall consist of the property to be acquired by the veteran as a home or a farm. The security shall be secured by a mortgage or security agreement in the full amount of the loan which mortgage or security agreement shall be either a first lien or a lien insured by mortgagees title insurance against loss from any prior encumbrance. The department may make subsequent loans for improvements to the security if there are no intervening liens between the first lien of the department created under this section and the recorded liens upon the security securing repayment of such subsequent improvement loans. Such consecutive liens, for the purposes of this chapter, shall be deemed collectively as a first lien upon the security. The mortgage or security agreement shall provide that the borrower, or any subsequent owner of the secured property, may pay all or any part of the loan at any time without penalty.
(2) A mobile home shall be secured by a security agreement in the full amount of the loan and the department shall perfect a security interest in favor of the State of Oregon. The security agreement shall provide that the borrower or any subsequent owner of the mobile home, may pay all or any part of the loan at any time without penalty. The security agreement shall provide for immediate acceleration of the unpaid balance of the loan if the mobile home is moved from the original site listed in the security agreement without first obtaining the written consent of the department. The security agreement shall also provide that removal of the mobile home to a site outside of this state shall constitute an act of default and result in immediate acceleration of the unpaid balance of the loan.
(3) Loans may not exceed:
(a) The maximum loan-to-value ratio or combined loan-to-value ratio permitted by the United States Department of Veterans Affairs for its Home Loan Guaranty Program (38 U.S.C. 3701 et seq.; 38 C.F.R. part 36);
(b) 85 percent of the net appraised value on homes that are not real property; and
(c) 90 percent of the net appraised value on farms that are real property. [Formerly 407.050; 1985 c.296 §3; 1997 c.214 §2; 2003 c.49 §1; 2005 c.20 §1; 2005 c.625 §31; 2013 c.228 §1]