6.1-194.151 - (Repealed effective October 1, 2010) Provisions applicable to real estate loans.
§ 6.1-194.151. (Repealed effective October 1, 2010) Provisions applicable toreal estate loans.
A. A state savings bank may make a real estate loan only after a qualifiedperson designated by the bank has submitted a signed appraisal of thesecurity property, except that an insured or guaranteed loan may be made onthe basis of a valuation of the security property furnished to the bank bythe insuring or guaranteeing agency.
B. At the time of origination, a real estate loan may not exceed 100 percentof the appraised fair market value of the security property. During the termof the loan, the loan-to-value ratio may increase above the maximumpermissible percentage if the increase results from an adjustment authorizedby subsection D of this section. In the case of a home loan secured byborrower-occupied property, the loan balance may not exceed 125 percent ofthe original appraised value of the property during the term of the loan,unless the loan contract provides that the payment shall be adjusted at leastonce every five years, beginning no later than the tenth year of the loan, toa level sufficient to amortize the loan at the then-existing interest rateand loan balance for the remaining term of the loan. The 125 percentlimitation shall not apply to that portion of a loan balance that is interestreceived in the form of a percentage of the appreciation in value of thesecurity property.
C. Repayments on real estate loans shall begin not later than sixty daysafter the loan proceeds are disbursed. However, if such loan is forconstruction, substantial alteration, repair, or improvement of the realestate securing the loan, repayments may begin not later than sixty monthsafter the date of the first loan disbursement, and interest shall be payableat least semiannually until regular periodic payments begin. In the case ofa 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 thefirst disbursement, with interest payable at least semiannually until regularperiodic payments begin.
D. A state savings bank may adjust the interest rate, payment, balance, orterm 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 loanin the form of a percentage of the amount by which the current market valueof the property, during the loan term or at maturity, exceeds the originalappraised value.
E. The loan term of a home loan shall not exceed forty years, with interestpayable at least semiannually, except as expressly authorized elsewhere inthis chapter. Payments on the loan balance, for other than nonamortized andline-of-credit loans, shall be made in at least semiannual installments,except that loan made on the security of farm residence and combinations offarm residences and commercial farm real estate may be repayable in annualinstallments. The loan may be fully amortized, partially amortized,nonamortized, or a line-of-credit loan. The loan contract may provide forthe deferral of principal and capitalization of a portion of interest, or ofall interest on loans to natural persons secured by borrower-occupiedproperty and on which periodic advances are being made.
(1991, c. 230.)