Article 3.1 - Veterans’ Farm and Home Purchase Act of 1974

California Military and Veterans Code — §§ 987.50-987.93

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Sections (52)

Amended by Stats. 2021, Ch. 549, Sec. 4. (SB 661) Effective January 1, 2022.

This article may be cited as the Veterans’ Farm and Home Purchase Act of 1974, also known as the CalVet Home Loan Program.

§ 987.51

Added by Stats. 1974, Ch. 1477.

The object of this article is to provide veterans with the opportunity to acquire farms and homes.

§ 987.52

Added by Stats. 1974, Ch. 1477.

The provisions of this article are applicable, and the benefits conferred thereby are available, to:

(a)Any veteran as defined in Section 980;

(b)Any person who is on active duty in the military or naval service of the United States, whose service may or may not have been continuous, and who is in all other respects qualified pursuant to Section 980.

§ 987.53

Amended by Stats. 2021, Ch. 549, Sec. 5. (SB 661) Effective January 1, 2022.

As used in this article:

(a)“Farm” means a tract of land, which, in the opinion of the department, is capable of producing sufficient income to provide payment of the amortized contract installments, including principal, interest, and taxes.

(b)“Home” means a parcel of real estate upon which there is a dwelling house and other buildings that will, in the sole opinion of the department, meet or exceed industry health and safety standards. “Home” includes all of the following:

(1)A condominium as defined in subdivision (h).

(2)A mobilehome as defined in subdivision (k).

(3)A residence with two to four units, inclusive, that satisfies the requirements of Section 143(k)(7) of the Internal Revenue Code where at least one unit is occupied by a veteran and their family.

(4)A cooperative dwelling unit as defined in subdivision (s).

(c)“Purchaser” means a veteran or any person who has entered into a contract of purchase of a farm or home from the department.

(d)“Purchase price” means the price that is paid for the acquisition of any farm or home.

(e)“Selling price” means the price for which any farm or home is sold.

(f)“Initial payment” means the first payment to be made by a purchaser to the

department or the seller for a farm or home.

(g)“Progress payment plan” means payment by the department for improvements on real property in installments as work progresses.

(h)“Condominium” means an estate in real property consisting of an undivided interest in common in a portion of a parcel of real property together with a separate interest in space in a residential building on the real property, such as an apartment, which, in the sole opinion of the department, meets minimum property standards as defined by the department. A condominium may include, in addition, a separate interest in other portions of the property.

(i)“Effective rate of interest” means the average rate of interest on the unpaid balance due on a participation contract to which the department’s legal rights are subject, and the rate of

interest on the unpaid balance of the purchase price, as determined by the department.

(j)“Participation contract” means an obligation secured by a deed of trust or mortgage, or other security interest, to include, but not be limited to, mortgage-backed securities, established pursuant to regulations of the department.

(k)“Mobilehome” means either a parcel of real estate, or an undivided interest in common in a portion of a parcel of real property, on which is sited one or more mobilehome modules, or a site in a mobilehome park, as defined in Section 18214 of the Health and Safety Code, on which one or more mobilehome modules are sited or are to be sited that will, in the sole opinion of the department, meet minimum property standards as defined by the department and meet all requirements of local governmental jurisdictions. However, where the mobilehome module or modules are

sited on trust land, “local governmental jurisdictions” means the tribal governing body.

For purposes of this subdivision, “module” means a section of a mobilehome at least 10 feet wide and at least 40 feet long.

(l)“Indian veteran” means a veteran, as defined in Section 980, who, in addition, either belongs to an Indian tribe, band, group, reservation, rancheria, or community which is recognized by the United States as eligible for services from the United States Bureau of Indian Affairs or is an Indian beneficiary and who is eligible under this article for purchase by the department of a home or farm sited on trust land.

(m)“Trust land,” with respect to an Indian veteran, means land held in trust by the United States government for individual Indians, Indians who belong to Indian tribes, or Indian tribes.

(n)“Allotment trust land” means land held by the United States under the Indian General Allotment Act of 1887, as amended, (Chapter 9 (commencing with Section 331) of Title 25 of the United States Code), in trust for an individual Indian or for two or more Indians holding individual interests in common. It includes both trust and restricted public domain allotments and allotments within the boundaries of an Indian reservation.

(o)“Tribal trust land” means land held in trust by the United States for an Indian tribe or band.

(p)“Tribe” means any Indian tribe, band, group, reservation, rancheria, or community which is recognized by the United States as eligible for services from the United States Bureau of Indian Affairs.

(q)“Immediate family” means the

spouse or registered domestic partner of a purchaser, the natural or adopted dependent children of the purchaser, and the parents of the purchaser if they are dependent on the purchaser for 50 percent or more of their support.

(r)“Indian beneficiary” means an Indian for whom land is held in trust by the United States government.

(s)“Cooperative dwelling unit” means a unit in a development owned by a stock cooperative as defined in subdivision (m) of Section 1351 of the Civil Code, including a limited-equity housing cooperative as defined in Section 817 of the Civil Code, or similar entity, the exclusive occupancy of which is established in accordance with cooperative dwelling unit ownership documents.

(t)“Cooperative dwelling unit ownership documents” means cooperative housing stock together with any occupancy

agreements or similar arrangements between the stock company and the owner of the cooperative housing stock. The cooperative dwelling unit ownership documents for a cooperative dwelling unit shall have terms that are acceptable to the department to allow the department to protect its rights under the applicable contract of purchase.

(u)“Cooperative housing stock” means a certificate of stock, a certificate of membership, or other evidence of ownership of an interest, in a stock cooperative as defined in subdivision (m) of Section 1351 of the Civil Code, including a limited-equity housing cooperative as defined in Section 817 of the Civil Code, or similar entity that entitles the purchaser to enter into occupancy agreements or similar arrangements with the stock cooperative, including a limited-equity housing cooperative, or similar entity, to occupy a cooperative dwelling unit.

(v)“Property,” except when used in the phrase “real property” or “personal property,” means a farm or a home.

§ 987.54

Added by Stats. 1974, Ch. 1477.

The administration of the provisions of this article is vested solely in the Department of Veterans Affairs.

§ 987.55

Added by Stats. 1974, Ch. 1477.

The department shall adopt rules and regulations in keeping with the purpose of this article to establish preferences in the granting of benefits conferred by this article.

§ 987.56

Amended by Stats. 2021, Ch. 549, Sec. 6. (SB 661) Effective January 1, 2022.

(a)The department shall prescribe and determine the eligibility and qualifications of all veterans. Any person deeming themselves a veteran and desiring to benefit hereunder, shall submit to the department information, in the form prescribed by the department, that will enable the department to determine their eligibility and qualifications. The department may make further inquiries and investigations in order to determine eligibility and qualifications.

(b)Whenever the department determines that a shortage of funds exists in any of the funding sources available, the department shall use the following preference categories for the use of those funds.

(1)Veterans who are otherwise qualified because of service during a time of war and who were wounded or disabled as a result of their service shall be given first preference in the benefits conferred by this article. The department shall determine, in each case, whether the veteran was wounded or disabled as a result of service.

(2)The following group shall be given second preference in the benefits conferred by this article:

(A)The unremarried spouse or registered domestic partner of individuals who were members of the Armed Forces on active military duty and were killed in the line of duty while on active duty.

(B)Members of the Armed Forces who were held as prisoners of war.

(C)The unremarried spouse or registered domestic partner

of members of the Armed Forces who have been designated by the Armed Forces as missing in action.

(3)Veterans whose eligibility is derived from service any portion of which was on or after August 2, 1990, and prior to a date to be set by law or by a Presidential proclamation ending the Gulf War, and veterans with wartime service discharged or released from active duty within 10 years of their application to the department shall be given third preference in the benefits conferred by this article.

(4)Active members of the California National Guard or a reserve component of a branch of the United States Armed Forces who meet the eligibility criteria of paragraph (3) of subdivision (a) of Section 980 shall be given fourth preference in the benefits conferred by this article.

(5)Veterans with wartime service discharged

or released from active duty more than 10 years prior to their application to the department shall be given fifth preference in the benefits conferred by this article.

(6)Veterans who are otherwise qualified and whose only military service was during a time of peace shall be given sixth preference for the benefits conferred by this article.

(7)Veterans eligible for a subsequent loan under subdivision (a) of Section 987.86 shall be given seventh preference in the benefits conferred by this article.

(c)Nothing in this section regarding preferences shall affect any eligibility requirement for benefits conferred by this article.

§ 987.566

Amended by Stats. 2002, Ch. 465, Sec. 7. Effective January 1, 2003.

Whenever applications exceed the amount of funds available in any one or more of the available funding categories, the department may establish a date for each funding category so as to provide funding to veterans whose applications were filed on or before that date, and whose applications are subsequently approved, before funding is made available to those whose applications are filed after that date.

§ 987.57

Amended by Stats. 2021, Ch. 549, Sec. 7. (SB 661) Effective January 1, 2022.

(a)The department shall require that all applicants under this article qualify under applicable federal laws and regulations governing the permitted uses of tax-exempt bond funds, and file within the time limits required under applicable federal law and regulations.

(b)Notwithstanding any other provision of state law to the contrary, no time limit for filing shall be imposed upon any veterans who served in the Philippine Commonwealth Army, or the Regular Scouts (“Old Scouts”), or the Special Philippine Scouts (“New Scouts”) during World War II, except as required by federal law.

(c)Notwithstanding subdivision (a) or any other law, the department shall

require all applicants whose loans would be funded from sources other than tax-exempt bond funds, including, but not limited to, mortgage-backed securities, to qualify under the applicable federal laws and regulations governing the source of funds, whether taxable or tax exempt.

§ 987.58

Amended by Stats. 2024, Ch. 129, Sec. 76. (SB 1097) Effective January 1, 2025.

(a)If a veteran dies after filing an application for purchase of a farm or a home, and the veteran’s eligibility and qualifications are subsequently approved, the veteran’s surviving spouse or surviving domestic partner may, in the discretion of the department, succeed to the veteran’s rights under the application, and may succeed to the veteran’s rights, privileges, and benefits under this article. The contract of purchase that the department otherwise would have made with

the deceased veteran may be made with the surviving spouse or domestic partner.

(b)If a person was a member of the Armed Forces on active military duty, entered active duty while in the State of California and lived in this state for six months immediately preceding entry into active duty, and was killed in the line of duty while on active duty or died after discharge from active duty from injuries incurred in the line of duty while on active duty, that person is a veteran for purposes of this article, and their unremarried surviving

spouse, or surviving domestic partner who has not remarried or entered into a domestic partnership with another person, may file an application, is entitled to the same rights, privileges, and benefits for which the Armed Forces member would have been eligible, and may contract with the department pursuant to subdivision (a). In making a determination of eligibility under this subdivision, the department may base its determination on documentation furnished to the surviving spouse or surviving domestic partner by the United States Department of Veterans Affairs specifying the cause of death of the Armed Forces member.

(c)If a member of the Armed Forces entered active military duty while in the State of California, lived in

this state for six months or more immediately preceding entry into active duty, and is being held as a prisoner of war or has been designated by the Armed Forces as missing in action, that person is a veteran for purposes of this article, and their spouse may file an application, is entitled to the same rights, privileges, and benefits, and may contract with the department pursuant to subdivision (a).

§ 987.59

Amended by Stats. 2021, Ch. 549, Sec. 8. (SB 661) Effective January 1, 2022.

(a)When a veteran has been authorized by the department to select a farm or home, the veteran shall submit that selection for approval, as the department prescribes. The department shall have the sole responsibility for the underwriting and approval of all farm or home loans, subject to this article.

(b)In order to achieve efficient processing and approval of loans, the department shall do all of the following:

(1)The department shall establish all systems, procedures, technologies, and guidelines necessary to achieve efficient processing of farm or home loans submitted for approval by the department, with the intent of achieving loan delivery within the

industry standard average number of days. These shall include, but may not be limited to, systems and technologies for the electronic transfer of loan funds and related fees.

(2)The department may ensure optimal participation of qualified mortgage brokers and other qualified financial institutions and shall review, standardize, and where possible simplify, the documentation required of mortgage brokers and other qualified financial institutions. The department shall provide adequate training of participating mortgage brokers and other qualified financial institutions.

(3)The department shall establish an outreach program to effectively disseminate program information to professional real estate and mortgage broker associations.

(4)The department, within the financial constraints of the program, shall offer broker

compensation and fees sufficient to ensure optimal participation of the private sector in the loan origination process and consistent with the veteran borrower’s interest in efficient and economical loan processing.

(5)The department shall provide access over the internet to veteran applicants and their authorized agents to enable loan applications to be filed electronically.

(6)In cooperation with the Office of Administrative Law, the department shall maintain regulations necessary to implement the provisions of this section and Section 987.67.

§ 987.60

Amended by Stats. 2021, Ch. 549, Sec. 9. (SB 661) Effective January 1, 2022.

The department may acquire the farm or home, or may provide financing so that a veteran may acquire the farm or home, from its owner or may contract with a veteran for the construction of a dwelling and other improvements for a farm or home, upon the terms agreed under all of the following terms and conditions:

(a)The department is satisfied of the desirability of the property submitted.

(b)The veteran has agreed with the department that they, or members of their immediate family, will actually reside on the property within 60 days from the date of purchase or, if the residence on the property is not complete on the date of purchase, within 60 days after the residence is completed, and will continue to reside on the

property until all payments due the department have been paid or the farm or home is sold, except where the occupancy requirement is waived pursuant to Section 987.62.

(c)If the department is to contract with a veteran for the construction of a dwelling and other buildings, or for the purchase of a mobilehome, all of the following are required:

(1)The veteran shall be the owner of the real property on which the dwelling and other buildings are to be constructed, or shall be the owner of the real property or shall be the owner of an undivided interest in common in a portion of a parcel of real property on which a mobilehome or cooperative dwelling unit is to be situated, and agrees to convey that property to the department or to allow the department to perfect a security interest in which the property is pledged as collateral in order to secure financing without unnecessary

cost.

(2)The veteran has paid a reasonable fee set by the department to cover the cost of any preliminary service of the department that may be necessary to process the application.

(3)The veteran has filed with the department adequate plans and specifications for the improvements to be constructed upon the real property, together with a contract, executed by a contractor licensed by the State of California for the construction of the improvements in accordance with the plans and specifications within 12 months after the acquisition of the property by the department. The department may require a bond or other security instrument executed by the contractor in an amount determined by the department providing for compliance with the terms of the contract and for the payment of persons furnishing material or labor on the job, executed by a surety company, or other financial

institution, authorized to do business in the State of California. The department may also require course-of-construction insurance for public liability, property damage, and workers’ compensation.

(4)The plans, specifications, contract, and other required documents or security instruments are approved by the department.

(5)The veteran has placed in escrow all sums of money to be advanced by the veteran, where the cost is in excess of the maximum that may be expended by the department.

§ 987.601

Amended by Stats. 1988, Ch. 454, Sec. 8.

(a)For purposes of the construction of a dwelling house or other improvements for a farm or home or the acquisition of a farm or home for an Indian veteran pursuant to this article, references to property or real property include the Indian veteran’s beneficial interest in trust land held by the United States for that veteran and a leasehold interest acquired by the Indian veteran from an Indian beneficiary when the Indian veteran is not a beneficiary of trust land; references to the purchase or acquisition of property or real property include the assignment of an Indian veteran’s beneficial interest in trust land held by the

United States for that veteran and a leasehold interest in trust land acquired by an Indian veteran from an Indian beneficiary; references to the sale of property or real property include the assignment of an Indian veteran’s beneficial interest in trust land held by the United States for that veteran and a leasehold interest in trust land acquired by the Indian member from an Indian beneficiary; and references to purchaser, seller, purchase price, and selling price refer to the acquisition or sale of a home situated or constructed upon or a farm comprising an assignment of an Indian veteran’s beneficial interest in trust land held by the United States for that veteran or a leasehold interest in trust land acquired by the Indian veteran from an Indian beneficiary.

(b)Subject to the conditions and limitations specified in Section 987.603, the department may acquire an Indian veteran’s leasehold interest in allotment trust land, or a sufficient

portion of the leasehold interest necessary to secure the loan, as determined by the department and the Bureau of Indian Affairs, for the purpose of entering into a contract with the Indian veteran for the acquisition of a farm or home or for the construction of a dwelling house or other improvements for a farm or home or for the purchase and installation of a mobilehome on the leasehold land.

(c)Subject to the conditions and limitations specified in Section 987.603, the department may acquire an assignment of an Indian veteran’s beneficial interest in trust land held by the United States for that veteran, or a sufficient portion of the beneficial interest necessary to secure the loan, as determined by the department and the Bureau of Indian Affairs, for the purpose of entering into a contract for the acquisition of a farm or home or for the construction of a dwelling house or other improvements for a farm or home or for the purchase of a

mobilehome on trust land assigned to the department by the Indian veteran beneficiary.

(d)For purposes of this section, the leasehold interest to be acquired by the department shall have been granted by the person or persons for whom the land is held in trust for a term of at least 25 years renewable without notice on the same terms and conditions for an additional period of at least 25 years. The lease shall be in a form acceptable to the department and to the United States Secretary of the Interior. The Indian veteran shall satisfy the department that it and its assignees will have access to the property for the term of the lease. The Indian veteran shall assign the lease to the department without cost and shall obtain the consent of the United States Secretary of the Interior to that assignment.

(e)For purposes of this section, the beneficial interest to be assigned by the

Indian veteran shall be assigned as security for a contract entered into pursuant to this article. The assignment shall be in a form acceptable to the department and to the United States Secretary of the Interior. The Indian beneficiary veteran shall satisfy the department that the department and its assignees will have access to the property for the term of the assignment. The beneficial interest of the Indian beneficiary veteran shall be assigned at no cost to the department and with the consent of the United States Secretary of the Interior.

§ 987.602

Added by Stats. 1979, Ch. 641.

(a)Subject to the conditions and limitations specified in Section 987.603, the department may acquire an Indian veteran’s leasehold interest in tribal trust land for the purpose of entering into a contract with the Indian veteran for the acquisition of a farm or home or for the construction of a dwelling house or other improvements for a farm or home or for the purchase and installation of a mobilehome on the leasehold land.

(b)For purposes of this section, the leasehold interest to be acquired by the department shall have been granted by the tribe for which the land is held in trust to

the Indian veteran for a term of at least 25 years renewable without notice on the same terms and conditions for an additional period of at least 25 years. The lease shall be in a form acceptable to the tribe, the department, and the United States Secretary of the Interior, shall be duly executed in accordance with the tribe’s constitution and bylaws or other tribal laws, and shall provide that the Indian veteran and his assignees shall have access to the property for the term of the lease. The Indian veteran shall assign the lease to the department without cost and shall obtain the consents of the tribe and the United States Secretary of the Interior to that assignment.

§ 987.603

Amended by Stats. 2011, Ch. 377, Sec. 6. (AB 1084) Effective September 30, 2011.

The department may acquire an assignment of an Indian veteran’s beneficial interest in trust land held by the United States for that veteran or a leasehold interest in trust land acquired by the Indian veteran from an Indian beneficiary and contract with an Indian veteran as provided in Sections 987.601 and 987.602 upon the terms agreed if all of the following conditions are met:

(a)The department is satisfied of the desirability of the property submitted.

(b)The Indian veteran has agreed with the department that the veteran, or members of the veteran’s immediate family, will actually reside on the property within 60 days from the date of acquisition by the department, or if the residence on the property is not complete on the date of acquisition, within 60 days after the residence is completed.

(c)The sum to be expended by the department pursuant to a contract for the acquisition of a home or the construction of a dwelling and other improvements does not exceed the maximum loan amount established pursuant to subdivision (a) of Section 987.65. The sum to be expended by the department pursuant to a contract for the acquisition of a mobilehome on trust land or leasehold land does not exceed the

maximum loan amount established pursuant to subdivision (b) of Section 987.65. The sum to be expended by the department pursuant to a contract for the acquisition of a farm on trust land or leasehold land does not exceed the maximum loan amount established pursuant to subdivision (e) of Section 987.65.

(d)The Indian veteran has paid a reasonable fee set by the department to cover the cost of preliminary service of the department that may be necessary to process the application.

(e)The Indian veteran has filed with the department adequate plans and specifications for the improvements to be constructed upon the property, together with a contract executed by a contractor licensed by the State of California or by an Indian contractor approved by the department for the construction of the improvements, in accordance with the plans and specifications, within 12 months after the

assignment of the Indian veteran’s beneficial interest or acquisition of the Indian veteran’s leasehold interest in the property by the department. The department may require a bond or other security instrument executed by the contractor in an amount determined by the department providing for compliance with the terms of the contract and for the payment of persons furnishing material or labor on the job, executed by a surety company, or other financial institution, authorized to do business in the State of California. The department may also require course-of-construction insurance for public liability, property damage, and workers’ compensation.

(f)The plans, specifications, contract, and other required documents or security instruments are approved by the department.

(g)The Indian veteran has placed in escrow all sums of money to be advanced by the veteran where the cost is in

excess of the maximum that may be expended by the department.

§ 987.62

Amended by Stats. 2021, Ch. 549, Sec. 11. (SB 661) Effective January 1, 2022.

(a)The department, after consummating a purchase transaction under the provisions of this article and the veteran having occupied the property as required by Section 987.60 of this article, may:

(1)Annually waive the occupancy requirement on a showing of good cause. The property financed under this article is intended to remain owner-occupied, and not become an investment, rental, or business property.

(2)Waive the occupancy requirement for any period of time if the property is a farm and if the veteran personally cultivates the property and harvests the crops or tends livestock.

(3)Annually

waive the veteran-occupied unit of a residence with two or four units.

(b)The department shall establish standards for the occupancy waiver and shall make those standards known.

(c)The department shall waive the occupancy requirement in any case where the State Department of Health determines that health hazards on adjacent property render the farm, home, or mobilehome unsuitable for occupancy, and the waiver shall be effective as long as those conditions exist.

§ 987.63

Added by Stats. 1974, Ch. 1477.

Notwithstanding other provisions of this article relating to the occupancy, leasing, letting, or subletting of a farm or home acquired pursuant to this article, the department, with respect to any veteran who after consummating a purchase of a farm or home under this article and occupying such farms or home reenters the active military, naval, or air service of the United State, may waive the occupancy requirement for the period of such active service and for a reasonable period subsequent to the termination of such active service and consent to the leasing, letting, or subletting of the farm or home during such period or periods.

§ 987.64

Added by Stats. 1982, Ch. 420, Sec. 2. Effective July 8, 1982.

In the event of any conflict or difference between any provision of this article and the federal Mortgage Subsidy Bond Tax Act of 1980 (P.L. 96-499; 94 Stat. 2660), including any amendment thereto and any regulation issued thereunder, the department shall comply with that federal law or regulation to the extent necessary to maintain the tax-exempt status of any issue of its general obligation or revenue bonds. Any action taken by the department prior to the effective date of this section to effect that compliance is hereby confirmed and ratified, it having at all times been the intent of the Legislature that the tax-exempt status

of those bonds be maintained.

§ 987.65

Amended by Stats. 2021, Ch. 549, Sec. 12. (SB 661) Effective January 1, 2022.

(a)The purchase price of a home, or the sum to be expended by the department pursuant to a contract for the construction of a dwelling house and other improvements, or the purchase price of a mobilehome sited on a lot owned by the purchaser and installed on a foundation system pursuant to Section 18551 of the Health and Safety Code, or the purchase price of a mobilehome converted to a fixture and improvement to the underlying real property in a mobilehome park that has been converted to a resident-owned subdivision, cooperative, condominium, or nonprofit corporation as set forth in Section 18555 of the Health and Safety Code, shall not exceed 125 percent of the then current maximum United States Department of Veterans Affairs loan limit.

(b)The purchase price of a mobilehome that is to be sited in a mobilehome park, as defined in Section 18214 of the Health and Safety Code, in addition to any assistance provided by the department to a veteran pursuant to subdivision (e) of Section 987.85, may not exceed 50 percent of the Federal Housing Finance Agency conforming loan limit for the county in which the mobilehome park is located.

(c)A veteran purchasing the home may advance, subject to Section 987.64, the difference between the total price or cost of the home and the sum of the purchase price of the home and any amount the department adds, under Section 987.69, to the purchase price of the home in fixing the selling price to the veteran. Any amount of the purchase price may be provided by funds from participation contracts, revenue bonds, or other traditional funding options, including mortgage backed securities.

(d)The purchase price of a farm shall not exceed 150 percent of the limit described in subdivision (a). A veteran purchasing the farm may advance the difference between the total price of the farm, or the cost of the dwelling and improvements to be constructed on a farm under a contract, and the sum of the purchase price or contract price to the department and any amount that the department adds, under Section 987.69, to the purchase or contract price to the department in fixing the selling price of the farm to the veteran.

§ 987.655

Amended by Stats. 2021, Ch. 549, Sec. 13. (SB 661) Effective January 1, 2022.

For a mobilehome which is to be sited in a mobilehome park as defined in Section 18214 of the Health and Safety Code, the department shall charge a rate of interest higher than that which is charged to purchasers of conventional housing or of a mobilehome sited on a lot owned by the purchaser. The interest rate shall be set by the department to balance lending risk while maintaining a rate at or below the market rate for a mobilehome in a park.

§ 987.656