1. (a) The Home Loan Division shall consider applicants, who are California veterans as defined in Section 980 of the Military and Veterans Code, for the Home Loan Division's DPP Program if:

   1. (1) the applicant has sufficient income and assets as defined in Section 309.4(a) to make interest-only monthly payments to purchase the home selected, and
   2. (2) the applicant's income can reasonably be expected to increase sufficiently within a five year period to make the transition to fully amortized principal and interest payments.
2. (b) The forecast for increases in income shall be based on upgrading of job/pay level and not merely on increases in income resulting from cost of living adjustments.
3. (c) Under the DPP Program, the veteran shall be allowed to make interest only payments for a period of up to five (5) years.
4. (d) The initial deferment period shall be two years.
5. (e) Reviews of the veteran's income status shall be performed biennially by the Home Loan Division during the deferred principal payment interval. If during the review the Home Loan Division determines that the veteran has sufficient income and assets as defined in Section 309.4(a) to make fully amortized payments, the deferred principal payment shall be converted (increased) to a principal and interest payment that will amortize the loan.
6. (f) A loan with deferment of principal payment shall be granted only after the Home Loan Division has determined that the applicant's credit is acceptable in accordance with Sections 309.1.

Note: Authority cited: Section 700, Military and Veterans Code. Reference: Sections 987.56 and 987.71, Military and Veterans Code.

History

1. New section filed 11-12-91; operative 12-12-91 (Register 92, No. 7).

2. Amendment of section heading and section filed 3-24-2026; operative 7-1-2026 (Register 2026, No. 13).