A savings bank may invest its funds in the purchase of real property contracts under the following conditions only:
1. That it must acquire the merchantable title to the property covered by such contracts.
2. That the type of property be such as would be eligible for a mortgage or deed of trust loan under this chapter.
3. Before making any such purchase, the property shall be appraised or evaluated and the purchase approved in the same manner as in the case of the purchase of loans secured using a mortgage or deed of trust on real estate.