c. If Borrower’s Income is Expected to Keep Pace with Payment Increases

The loan application may be underwritten based on the first year’s payment amount if there are strong indications that the income used to support the application will increase to cover the yearly increases in loan payments.

·   Routine cost of living increases cannot be used for this purpose.

·   Increases resulting from confirmed future promotions or wage percentage increases guaranteed by labor contracts (for example, teachers, auto workers) may be given favorable consideration.

The assistance payments must run for a minimum of one year.  Scheduled reductions in the assistance payments must occur annually on the anniversary of the first mortgage payment. 

The reduction in the assistance payments may be accomplished through

·   annual payment increases in equal or approximately equal amounts, or

·   equal annual increases in the interest rate.