Justinian,
2. I am particularly interested in the following scenario. Suppose you buy a place an S/O, and withing a couple of years you start a family and want to move onto soemthing bigger, are you allowed to apply for a second mortgage, rent the first place out, and still receive the mortgage assistance from CX?
Yes you are able to do this.
Simply inform CX Housing that you wish them to stop paying the mortgage for property A. CX must have nothing to do with property A from this point. Once this is done you are free to rent out property A.
Now you can continue to use the CX mortgage assistance to pay off your next property, property B.
Many people have done this and CX Housing Dept will assist you all they can with the process.