§ 6.1-194.151. Provisions applicable to real estate loans
A. A state savings bank may make a real estate loan only after a qualified person designated by the bank has submitted a signed appraisal of the security property, except that an insured or guaranteed loan may be made on the basis of a valuation of the security property furnished to the bank by the insuring or guaranteeing agency.
B. At the time of origination, a real estate loan may not exceed 100 percent of the appraised fair market value of the security property. During the term of the loan, the loan-to-value ratio may increase above the maximum permissible percentage if the increase results from an adjustment authorized by subsection D of this section. In the case of a home loan secured by borrower-occupied property, the loan balance may not exceed 125 percent of the original appraised value of the property during the term of the loan, unless the loan contract provides that the payment shall be adjusted at least once every five years, beginning no later than the tenth year of the loan, to a level sufficient to amortize the loan at the then-existing interest rate and loan balance for the remaining term of the loan. The 125 percent limitation shall not apply to that portion of a loan balance that is interest received in the form of a percentage of the appreciation in value of the security property.
C. Repayments on real estate loans shall begin not later than sixty days after the loan proceeds are disbursed. However, if such loan is for construction, substantial alteration, repair, or improvement of the real estate securing the loan, repayments may begin not later than sixty months after the date of the first loan disbursement, and interest shall be payable at least semiannually until regular periodic payments begin. In the case of a home loan where the loan proceeds are to be used for construction, substantial alteration, repair, or improvement of the security property, repayments shall begin not later than thirty-six months after the date of the first disbursement, with interest payable at least semiannually until regular periodic payments begin.
D. A state savings bank may adjust the interest rate, payment, balance, or term to maturity on any real estate loan as authorized by the loan contract, and may receive a portion of the consideration for making a real estate loan in the form of a percentage of the amount by which the current market value of the property, during the loan term or at maturity, exceeds the original appraised value.
E. The loan term of a home loan shall not exceed forty years, with interest payable at least semiannually, except as expressly authorized elsewhere in this chapter. Payments on the loan balance, for other than nonamortized and line-of-credit loans, shall be made in at least semiannual installments, except that loan made on the security of farm residence and combinations of farm residences and commercial farm real estate may be repayable in annual installments. The loan may be fully amortized, partially amortized, nonamortized, or a line-of-credit loan. The loan contract may provide for the deferral of principal and capitalization of a portion of interest, or of all interest on loans to natural persons secured by borrower-occupied property and on which periodic advances are being made.
(1991, c. 230.)
Sections: Previous 6.1-194.141 6.1-194.142 6.1-194.143 6.1-194.144 6.1-194.145 6.1-194.146 6.1-194.147 6.1-194.148 6.1-194.149 6.1-194.150 6.1-194.151 6.1-194.152 6.1-194.153 6.1-194.154 6.1-195 NextLast modified: April 2, 2009