Section 987.87 Of Article 3.1. Veterans’ Farm And Home Purchase Act Of 1974 From California Military And Veterans Code >> Division 4. >> Chapter 6. >> Article 3.1.
987.87
. (a) The department shall establish the actual interest rate
to be paid. To this end, the department, within 60 days of receipt
of the survey of the financial condition of the Division of Farm and
Home Purchases required at the close of each fiscal year conducted by
an independent public accounting firm of recognized standing as
provided under various veterans bond acts, shall report to the
California Veterans Board and the Veterans' Finance Committee of
1943, regarding the recommended uniform rate of interest payable upon
the amount remaining unpaid under any veteran's purchase contract
executed on or after September 26, 1974. The department shall make
its finding as to the rate of interest to be charged, determined by a
floating rate based upon the actual cost of general obligation bond
and revenue bond sales, plus a certain percent for administrative
costs, taking into consideration the current value of money, the
solvency of the Veterans' Farm and Home Building Fund of 1943, and
the interest paid on any participation contracts to which the
interest of the department may be subject. Upon approval by the board
and the committee, the department may raise or lower the effective
rate of interest payable under these contracts annually as it deems
to be for the best interests of the department, as well as the
contractholders, if in so doing this action is made applicable alike
to any and all of these contracts. The interest rate shall not be
raised so that the effective date of a higher rate of interest occurs
more than once in any calendar year, unless the board and committee,
by a two-thirds vote of the members of each, make a finding that an
additional increase in the interest rate is necessary to enable the
department to maintain the financial solvency of the fund or to meet
its obligations to bondholders or purchasers. At least 90 days'
advance written notice to the contractholders shall be given before
any increase in the interest rate becomes effective.
(b) The total amount of any installment payment shall be raised or
lowered to reflect any change in the effective rate of interest. The
department may, however, adjust or postpone any installment payment
for good cause pursuant to Section 987.71 and, for these purposes,
good cause shall include a consideration of whether an increased
installment payment would be excessively burdensome in light of a
purchaser's financial circumstances. The department shall include
notice of this provision in the 90 days' advance notice required
under subdivision (a).
(c) Notwithstanding subdivision (a) and Section 987.875, the
department may establish separate rates of interest payable on the
amounts remaining unpaid under veterans' purchase contracts for any
and all contractholders who are called to active duty in the military
service of the United States, and who qualify for relief under the
provisions of the federal Soldier's and Sailor's Civil Relief Act of
1940, as amended. The rates need not be uniform for all who qualify,
but shall not be greater than the rate provided for in that act.
Rates shall be established at the discretion of the department, and
may apply to any contract from the date of entry into active duty to,
and including, 90 days after the date of release from active duty.