OAR 274-021-0005: Foreclosed and Deeded Property

(1) When the Department sells a property acquired under ORS 407.135 and 407.145(1), the sale will be conducted under the provisions in ORS 407.375 and the following terms: (a) The Department must first offer the property by sealed bid. (b) The Department must advertise and give notice of the sale of the property in the local newspaper. at least once during the 15 days prior to the bid opening. (c) The notice shall advise prospective buyers of the following: (A) Of all the bidders who are veterans for a home loan, the veteran who submits the highest bid shall be given the opportunity to purchase the property for the amount of a higher bid submitted by a person who is not a veteran and must submit a matching bid in writing no later than 5:00 p.m. on the date and at the place specified in the notification; (B) The opportunity to submit a matching bid is only available to a veteran purchasing the property solely in his or her own name, or with a lawful spouse; (C) If the highest bid by a non-veteran is not matched by an eligible veteran, the highest bid will be accepted; and (D) State the minimum bid that will be accepted. (2) When the Department sells a property acquired under ORS 407.135 and 407.145(1), the sale will be conducted under the provisions of ORS 407.377and under the following terms: (a) The person with whom the Department has entered into a personal services contract to sell the property must post a "for sale" sign on the property; and (b) The property must be advertised for sale at least once in a newspaper of general circulation where the property is located. (3) The Director will determine interest rates for contract sales of ODVA properties and may apply different rates of interest to different contract sales. The Director may consider factors when determining contract interest rates, including, but not limited to: (a) The current value of funds; (b) The projected value of funds; (c) The solvency of the Department's Loan Program; (d) The rates' effect on veterans and other purchasers; (e) Any federal tax law restrictions; (f) Actual or projected conventional mortgage rates; (g) The availability of lendable funds; (h) Actual or projected demand for ODVA properties; (i) The source(s) of funds; and (j) Whether or not the purchaser is providing any approved "work equity" as part of the down payment on the contract. (4) The Director may change the prescribed rates of interest from time to time. (5) The Department will endeavor to record prescribed interest rates as reasonably as it is practical. (6) After the original purchase from the State of Oregon, each time ownership of the property is transferred to anyone (veteran or nonveteran), other than the surviving spouse, unremarried former spouse, surviving child, or surviving stepchild of the owner, the interest rate from the date of such transfer shall be the same as the then-prevailing interest rate under subsection (3)(a) of this section, or the existing interest rate on the contract, whichever is higher; (7) The Director may modify the terms of the contract if agreeable to all parties. (8) Each property will be sold on contract unless the Director finds that in a particular transaction it would be in the best interest of the Department that the property be sold on a Deed of Trust, or for cash. The terms of all sales will be as follows: (a) Length: (A) The maximum length of the contract will be established by the purchase price, as follows: (i) $63,000 and over — 30 years; (ii) $35,000–$62,999.99 — 25 years; (iii) $15,000–$34,999.99 — 20 years; (iv) $10,000–$14,999.99 — 10 years; (v) Under $10,000 — 0 years (Cash Out Only). (B) The Director may enter into a contract with terms different from the ones prescribed in this rule if the provisions of ORS 407.375(6) apply (no satisfactory bid received and sale negotiated). (b) Down Payment: (A) The term “purchase price" as used in this rule shall mean the actual purchase price agreed to by the purchaser and the Director; (B) The minimum down payment required will be established by whether the property will be owner-occupied, whether the property is classified as farm, residential, personal property, unique, unusual, or bare land, the asking price and the purchase price, as follows: (i) Residential — Asking price less than $80,000 — Five percent down payment if owner-occupied, otherwise 15 percent down payment. In cases where the purchase price is different than the asking price, the percentage (five or 15) will be applied to the purchase price; (ii) Farm, Manufactured Home with Land, Bare Land, Residential — Asking price $80,000 or more — 10 percent down payment if owner-occupied, otherwise 20 percent down payment. In cases where the purchase price is different than the asking price, the percentage (10 or 20) will be applied to the purchase price; (iii) Personal Property Manufactured— 20 percent down payment if owner-occupied, otherwise 30 percent down payment; (iv) Unique or Unusual Property — The required down payment will be stated on the property description sheet in an amount or percentage determined by the Director. (9) A purchase of property from the Oregon Department of Veterans’ Affairs will not be considered a loan under ORS 407.205. (10) All purchasers must meet the department’s repayment ability requirements. (11) If a prospective purchaser submits more than one bid for the same property, only the highest such bid will be considered. (12) The property will not be sold on contract to anyone who had an interest in the property at the time foreclosure action was commenced or a deed-in-lieu of foreclosure was accepted. (13) A purchaser who states that he or she will be occupying the property in order to pay a lesser percentage of down payment or to receive approval of work equity must: (a) Occupy the property within 60 days after the sale closes; and (b) Continuously occupy the property as his or her principal primary residence for a period of not less than 365 days from the date of closing or initial occupancy, whichever is later. (14) In the event purchaser fails to occupy the property as stated, the Director may require cash payment of an additional down payment. The required additional down payment will be the amount the purchaser would have been required to pay if the property had been purchased as nonowner-occupied, less any cash down payment received at closing.