(a) A bank may make or acquire mortgage loans evidenced by a note which provides for variation in the rate of interest over the term of the note; but a loan made to finance or refinance the purchase of and secured by a first lien on a dwelling house of 4 or fewer separate households occupied in whole or in part by the mortgagor shall be subject to but not limited to the following conditions and restrictions imposed by the commissioner:

1. (1) the method by which the rate of interest may be adjusted;
2. (2) the frequency with which the rate of interest may be adjusted, but successive rate adjustments shall be no less than 6 months apart;
3. (3) the maximum increase in the rate of interest allowed for the adjustment;
4. (4) provisions for decreases in the rate of interest as may be warranted by market conditions;
5. (5) requirements for advance notification and explanation of adjustments in the rate of interest, but the notification and explanation shall occur no less than 30 days before the adjustment; and

6. (6) methods of disclosure to the mortgagor of the terms and conditions of the loan as required under chapter 140D.

   Notwithstanding any law to the contrary, the commissioner may by further conditions and restrictions provide that the rate of amortization may be varied, including utilizing a period of negative amortization, in order to adjust the rate of interest.