Southold Town is considering using a portion of its Community Housing Fund revenue for new first-time homebuyer down payment assistance loan program that could provide 18 percent of the cost to purchase a home here — up to $135,000.
Pictured Above: Heather Lanza, Julie McGivney, Mara Cerezo and Andrea Sullivan at the June 16 work session.
Town Community Development Project Supervisory Andrea Sullivan gave an overview of the proposal to the Southold Town Board at its June 16 work session, as she and members of the town’s Planning Department gave an overview of their work addressing community housing as a new top priority in the town’s Zoning Update.
Ms. Sullivan said the town had previously been considering a pilot program to provide $40,000 first-time homebuyer loans for ten people this year, but in discussing that proposal with a consultant and Town Attorney Julie McGivney, they found that “long-term affordability is not accomplished.” That program could also not be used alongside an existing similar Suffolk County down payment assistance program.
She said the revised proposal would enable new homeowners to put enough money down on a home to avoid paying for private mortgage insurance, which is required when putting less than 20 percent down on a real estate purchase.
“The monthly savings is about $1,217,” she said. “Not only are we helping them initially get into homes, but we’re creating long-term affordability.”
The program could provide 18 percent of the purchase price on a house costing up to $750,000, with the new homeowner contributing a down payment of 2 percent. The town would recoup the loan upon any subsequent sale of the property. The town has not yet explored whether there would be interest on the loan.
“The nice thing about this is we will probably get the money back,” said Ms. Sullivan. “I’m here to gauge if the Town Board is willing to do 18 percent.
Councilwoman and Justice Kate Stevens expressed concern there might not be enough houses priced as low as $750,000 in Southold to make the program work.
Ms. McGivney said the $750,000 threshold was set in part because it was the maximum home value on which buyers would not have to pay into the CHF or Community Preservation Fund (CPF) transfer tax.
Ms. Sullivan said she plans to discuss raising the CPF tax exemption to as much as $900,000 with Town Land Preservation Coordinator Lillian McCullough.
“This ties into our discussions on ‘how to we measure actually moving the needle on people who are cost burdened — if we can get you in the house, you can stay there,'” said Councilwoman Anne Smith, who seemed to like the proposal.
“This would reduce the monthly cost of a first-time homebuyer getting into a home,” said Councilwoman Alexa Suess at the Town Board’s regular meeting that evening. “This would reduce their overall payments quite a bit.”
Ms. Sullivan proposed budgeting $1.4 million from the Community Housing Fund, funded through a new .5 percent real estate transfer tax, toward the new proposal — the town had received nearly $7 million in CHF revenue since the program’s inception in 2023, according to the most recent figures provided to The Beacon by State Assemblyman Tommy John Schiavoni.
Ms. Sullivan was hired by Southold Town in 2025 to administer the Community Housing Fund, which has not yet begun to release money while the program’s guidelines are being established.
The town is also planning to provide subsidies to developers of affordable housing complexes and financial assistance for construction of accessory dwelling units through the program.
Community Housing has become the top priority of Southold Town’s shift in its zoning update focus on addressing areas of major concern to the community, as explained by Town Planning Director Heather Lanza at a June 11 public forum.
Ms. Lanza said at the June 16 work session that the town needs to look at everywhere affordable housing is mentioned in the town’s current zoning code, and make sure it is consistent throughout the code.
Ms. Lanza added that Ms. Sullivan, whose office had been in the Community Liaison’s office adjacent to the Town Supervisor’s office is expected to be working directly with the Planning Department, which will change its name to the Planning and Community Development Department, likely when the down does its reorganizational meeting in January ofd 2027.
Ms. Sullivan said she is working with town planners on adding a new chapter to the code, Chapter 112, devoted exclusively to the administration of community housing. She said that chapter will likely be brought to a Town Board code committee in August.
In response to a query from Mattituck resident Charles Gueli on why progress on housing seems to have stalled in Southold at the Town Board’s meeting the same evening, Ms. Suess said some of these items, including the subsidies for community housing developers, can’t be made until the town code is updated to adhere to the town’s 2023 Community Housing Plan.
“The idea is looking at these solutions in parallel. These code changes are going to take a little while,” she said. “We’re trying to come at it from multiple angles at once.”
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