The department shall establish the actual interest rate to be paid. To this end the department, by a two-thirds vote of California Veterans Board members and with the approval of the Veterans’ Finance Committee of 1943, is empowered to establish a uniform rate of interest payable upon the amount remaining unpaid under any veteran’s purchase contract executed prior to the effective date of the amendments to this section enacted at the 1972 Regular Session of the Legislature. The California Veterans Board and the Veterans’ Finance Committee shall periodically, at least once each year, make a finding as to the rate of interest to be charged, not to exceed 5 percent per annum on contracts for the purchase of farms or homes, and not to exceed 8 percent per annum on contracts for the purchase of mobilehomes, taking into consideration the current value of money, bond market conditions, and the solvency of the Veterans’ Farm and Home Building Fund of 1943. The California Veterans Board may raise or lower the rate of interest payable under such contracts for any given period as many times and as frequently as it deems to be for the best interests of the department, as well as the contract holders, if in so doing its action is made applicable alike to any and all contract holders and 90 days’ advance notice be given of the time when the new rate of interest is to become effective. Any change in the interest rate shall not affect the total amount of any installment payment, but the difference shall be credited to interest or principal and accelerate or prolong the period of payment.

(Amended by Stats. 1972, Ch. 1410.)