Oregon Statutes 407.325 – Rate of interest on loans; rules
(1) 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.
Terms Used In Oregon Statutes 407.325
- Acquisition: means the purchase, improvement or refinancing of a home or farm or the payment of down payments or closing costs for such purposes. See Oregon Statutes 407.085
- Fixed interest rate: means an interest rate on a home or farm loan that remains the same for the term of the loan. See Oregon Statutes 407.085
- Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
- You are late making a payment or commit some other default, triggering an increase to a penalty rate
- The bank changes the terms of your account and you do not reject the change.
- The rate expires (if the rate was fixed for only a certain period of time).
- Home: includes real property connected to a residential structure, including any long-term leasehold and any outbuildings. See Oregon Statutes 407.085
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Variable interest rate: means an interest rate on a home or farm loan that may change periodically during the term of the loan. See Oregon Statutes 407.085
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
(2) The department shall periodically, during the term of a home or farm loan with a variable interest rate, prescribe the interest rate to be paid by an applicant, taking into consideration the current value of the money, the solvency of the loan program and the effect of the rate on veteran applicants.
(3) Except as provided in subsection (4) of this section:
(a) The rate of interest on a loan granted on or after May 27, 1971, and originally set at five and nine-tenths percent per annum may not be increased to more than seven and nine-tenths percent per annum.
(b) The rate of interest on a loan granted on or after January 1, 1981, and originally set at seven and two-tenths percent per annum may not be increased to more than nine and two-tenths percent per annum.
(4) The department may prescribe the interest rate to be paid by an applicant at a rate greater than the rates described in subsection (3) of this section, but only if the department determines, at the sole discretion of the department, that such action is necessary to avoid invoking the provisions of Article XI-A, section 4, of the Oregon Constitution.
(5) When, during two consecutive fiscal years, the cash flow projection and the review of the projection performed under ORS § 407.185 indicate that the Oregon War Veterans’ Bond Sinking Account will maintain a balance throughout the term of the projections that exceeds the succeeding years’ debt service and operating expenses for the loan program, the department shall prepare a program for reducing the interest rates charged under this section in such a manner as to ensure the future solvency and self-supporting nature of the loan program. However, no reduction in interest rates shall occur if the variable rate debt, if converted to a fixed rate, requires retention of the amounts in order to meet projections.
(6) Notwithstanding the rate prescribed for acquisition of a home as provided in subsections (1) to (5) of this section, the department may periodically establish separate and distinct interest rates for home improvement loans granted before January 1, 2020. [Formerly 407.072; 1985 c.296 § 6; 1987 c.221 § 7; 1989 c.171 § 48; 1989 c.728 § 4; 1997 c.214 § 4; 2005 c.625 § 36; 2019 c.223 § 14]