HomeMy WebLinkAbout260728_Draft #1_Down Payment Assistance Loan ProgramPage 1 of 7
Community Housing Fund (CHF)
DOWN PAYMENT ASSISTANCE LOAN – PROGRAM
GUIDELINES
Town of Southold
Prepared by Andrea Sullivan, Community Development Project Supervisor
and Julie McGivney, Assistant Town AƩorney 3
CONTENTS
SECTION I – DEFINITIONS ................................................................................................................................ 2
SECTION II – PROGRAM OVERVIEW AND ELIGIBILITY ...................................................................................... 3
OVERVIEW ................................................................................................................................................... 3
APPLICANT ELIGIBILITY CRITERIA ................................................................................................................. 3
PROPERTY ELIGIBILITY CRITERIA .................................................................................................................. 4
SECTION III – APPLICATION THROUGH CLOSING ............................................................................................. 5
APPLICATION SUBMISSION .......................................................................................................................... 5
APPLICATION RESTRICTIONS ........................................................................................................................ 5
PURCHASER CERTIFICATE ............................................................................................................................ 6
CLOSING ...................................................................................................................................................... 7
SECTION IV – ON-GOING PROGRAM COMPLIANCE ......................................................................................... 7
ANNUAL COMPLIANCE REQUIREMENTS AND RE-CERTIFICATION ............................................................... 7
FAILURE TO COMPLY .................................................................................................................................... 7
Town of Southold 7/10/2026
Planning and Community Development Department
CHF Down Payment Assistance Loan – Program Guidelines
For Discussion Purposes Only
Page 2 of 7
SECTION I – DEFINITIONS
For purposes of understanding the outlined policy, the following definiƟons apply.
Term DefiniƟon
Applicant An individual who submits an applicaƟon for entry into the
Program and is assigned a Purchaser CerƟficate.
Eligible Individual A household with an income that does not exceed 100% of the
income limits as established by the state of New York mortgage
agency low-interest rate loan program in non-target categories
for Suffolk County in effect on the contract date for the sale of
such property. (See chart that follows below)
First-Time Homebuyer An eligible individual who has not owned a primary residenƟal
property and is not married to a person who has owned a
residenƟal property during the three-year period prior to his or
her purchase of the primary residenƟal property, and who does
not own a vacaƟon or investment home.
Purchase Price Limit A primary residenƟal property for an eligible individual that does
not exceed one hundred fiŌy percent of the purchase price limits
established by the state of New York mortgage agency low-
interest rate loan program in non-target categories for Suffolk
County in effect on the contract date for the sale of such
property.
Southold Town Resident A person who is currently a resident of the Town or a non-
resident who has been a resident of the Town within the past five
years.
Primary ResidenƟal Property Any one- or two-family house, townhouse, or condominium.
Mortgage Counseling CerƟficate A cerƟficate issued by a HUD-cerƟfied housing counseling agency
confirming that an Applicant has successfully completed required
mortgage counseling or homebuyer educaƟon in accordance with
Program requirements.
Town of Southold 7/10/2026
Planning and Community Development Department
CHF Down Payment Assistance Loan – Program Guidelines
For Discussion Purposes Only
Page 3 of 7
SECTION II – PROGRAM OVERVIEW AND ELIGIBILITY
OVERVIEW
The First-Time Homebuyer Down Payment Assistance Loan Program will operate on a first-come, first-
served basis through December 31, 2028, or unƟl all available funds have been exhausted. The funding
allocaƟon for January 1, 2027 through January 1, 2028 is $1.5 million.
The Town of Southold will offer eligible first-Ɵme homebuyers zero-interest, deferred payment loans from
the Community Housing Fund of up to 18% of the purchase price towards a Primary ResidenƟal Property to
income eligible Southold Town Residents hoping to purchase a home within the Town of Southold.
Financial assistance through this program shall be fully repaid by the recipient upon the resale of the home
or upon refinance of the primary mortgage for purposes of cash-out equity. Applicants must have a
minimum of 2% of the projected purchase price deposited into their bank at the Ɵme of applicaƟon and
provide proof of same.
Applicant must have not already entered into a contract of sale at the Ɵme of at the Ɵme of applicaƟon to
the program.
The Town of Southold reserves the right to reduce the amount of Down Payment Assistance provided to an
Applicant to ensure the assistance is limited to the amount that is reasonably necessary to make the
purchase of the Primary ResidenƟal Property affordable and financeable. Pursuant to New York Town Law §
64-k, in no event shall the assistance provided to an eligible applicant exceed 50% of the total purchase
price of the Primary ResidenƟal Property.
APPLICANT ELIGIBILITY CRITERIA
Applicant must be able to Qualify for a Mortgage. An applicant must have sufficient resources and credit to
qualify for a mortgage from a licensed and accredited FNMA/FMAC lending insƟtuƟon. Please see SecƟon
III for applicable restricƟons.
Applicant must contribute a minimum of 2% toward the purchase price of the home. The 2% buyer
contribuƟon must be deposited in the bank at the Ɵme of applicaƟon submission.
Applicant must be a First-Time Homebuyer. Pursuant to New York Town Law § 64-k, a First-Time Homebuyer
means an eligible individual who has not owned a primary residenƟal property and is not married to a
person who has owned a residenƟal property during the three-year period prior to his or her purchase of
the primary residenƟal property, and who does not own a vacaƟon or investment home.
Applicant must be a Southold Town Resident. Pursuant to New York Town Law § 64-k, "A resident of the
Town" shall include a person who is currently a resident of the Town or a nonresident who has been a
resident within the past five years.
Town of Southold 7/10/2026
Planning and Community Development Department
CHF Down Payment Assistance Loan – Program Guidelines
For Discussion Purposes Only
Page 4 of 7
Applicant must be Income Eligible. Pursuant to New York Town Law § 64-k, an Income Eligible Individual
means a household that does not exceed 100% of the income limits as established by the state of New York
mortgage agency (SONYMA) low-interest rate loan program in non-target categories for Suffolk County in
effect on the contract date for the sale of such property.
For 2026, those income limits are:
1 & 2 Person 3+ Persons
$197,160 $230,020
PROPERTY ELIGIBILITY CRITERIA
Applicant must adhere to 150% of the SONYMA Purchase Price Limits. Pursuant to New York Town Law
§ 64-k, the purchase price limits for a primary residenƟal property for an eligible individual do not exceed
150% of the purchase price limits established by the state of New York mortgage agency low-interest rate
loan program in non-target categories for Suffolk County in effect on the contract date for the sale of such
property.
For 2026 the purchase price limits are capped at:
SONYMA Maximum Purchase Price Limits for 2026
1-Family Home 2-Family Home
$1,960,455 $2,510,160
The purchase price of the home cannot exceed the reflected price above aŌer closing.
Important Note: This Program Does Not AutomaƟcally Exempt You from the Community PreservaƟon Fund
Real Estate Transfer Tax. The following overview is provided for informaƟonal purposes only.
Being approved for the Community Housing Fund Down Payment Assistance Program does not
automaƟcally exempt an applicant from paying the 2.5% Peconic Bay Region Community PreservaƟon Fund
transfer tax when purchasing a home. This Program and the transfer tax exempƟon are two separate
maƩers governed by two separate sets of rules; qualifying for one does not mean an applicant qualifies for
the other. To be exempt from the transfer tax as a first-Ɵme homebuyer in the Town of Southold, an
applicant must meet both of the following criteria pursuant to New York Tax Law § 1449-EE (4):
The home's price must be $784,182 or less.
The applicant's household income must be $197,160 or less. This figure does not increase with
household size, which means a larger household (3 or more people) may sƟll qualify for this
Program's assistance while remaining responsible for paying the 2.5% transfer tax.
Applicant must ensure Town Code compliance. The Primary ResidenƟal Property must have a valid and
current CerƟficate of Occupancy for all structures requiring the same on the property.
Town of Southold 7/10/2026
Planning and Community Development Department
CHF Down Payment Assistance Loan – Program Guidelines
For Discussion Purposes Only
Page 5 of 7
SECTION III – APPLICATION THROUGH CLOSING
APPLICATION SUBMISSION
Applicants must submit a complete applicaƟon to ______ (THIRD PARTY) ______ either by mail or through
its online applicaƟon portal. ApplicaƟons will be accepted on a rolling basis unƟl the Town announces that
available funding has been exhausted or the Program deadline has been reached, whichever occurs first.
Incomplete applicaƟons will not be accepted or processed.
A complete applicaƟon will include:
Signed and dated Community Housing Fund Down Payment Assistance ApplicaƟon. (See aƩached)
Two months of current consecuƟve pay stubs showing year-to-date gross earnings for all
household members over 18 years of age. If year-to-date earnings are not included on pay stubs, a
leƩer signed by your employer on company leƩerhead is required. LeƩer must state your
Ɵtle/posiƟon, annual salary and/or rate of pay, with number of weekly hours worked. AddiƟonal
pay stubs or other documentaƟon to verify income may be required.
Copies of your signed IRS 1040-Federal Tax Returns with all required schedules and W-2
statements for the last three years. If you file electronically, your signature on all schedules before
sending them will be required.
Copies of documentaƟon for Social Security Benefits, Disability Income, Pension Income,
Unemployment, etc. (if applicable).
Four current consecuƟve bank/financial statements with all pages for each applicable bank
account. A minimum of 2% of the purchase price of the subject property is required.
SeparaƟon agreement or divorce decree (if applicable).
An applicant, along with each individual named on the mortgage must aƩend a mortgage
counseling session from a HUD cerƟfied not-for-profit housing agency.
APPLICATION RESTRICTIONS
ApplicaƟons submiƩed by an LLC will not be accepted.
The applicant must not have entered into a Contract of Sale to purchase the subject property prior
to being approved for the CHF Down Payment Assistance Program and issued a Purchaser
CerƟficate from the ______ (THIRD PARTY) ______ on behalf of the Town of Southold.
Private mortgages are not allowed. Mortgages must be obtained through a licensed and
recognized FNMA/FMAC lending insƟtuƟon and must be financed with a 30-year mortgage.
No short sales are allowed. No foreclosures are allowed.
No bank-owned properƟes are allowed.
Non-occupying co-borrowers/co-signers/guarantors are not permiƩed.
100% financing is not permiƩed.
Interest-only mortgages and adjustable-rate mortgages are not permiƩed.
"No Doc" loans or no-income-check loans are not allowed.
80/20 loans are not allowed.
Town of Southold 7/10/2026
Planning and Community Development Department
CHF Down Payment Assistance Loan – Program Guidelines
For Discussion Purposes Only
Page 6 of 7
PURCHASER CERTIFICATE
Purchaser CerƟficate: Purchaser CerƟficates will be issued to qualified, income verified eligible applicants
on a first-come, first-served basis. This Purchaser CerƟficate, issued by ______ (THIRD PARTY) ______
represents a sum of up to 18% of the home's purchase price to be applied toward the down payment of
the recipient's purchase of an owner occupied, primary residenƟal property located within the Town of
Southold.
Applicants will be noƟfied when all available Purchaser CerƟficates have been issued and a waiƟng list has
been established. Eligible applicants who are issued Purchaser CerƟficates will have 180 days from the date
the Purchaser CerƟficate is issued to submit a fully executed Contract of Sale to the Community
Development Project Supervisor. Failure to return a fully executed Contract of Sale by that date shall result
in the automaƟc nullificaƟon of the Purchaser CerƟficate. As Purchaser CerƟficates are nullified, new
CerƟficates will be offered to eligible applicants in the order they appear on the wai Ɵng list. Applicants may
request a one-Ɵme extension of their Purchaser CerƟficate, to be granted at the sole discreƟon of the
Town. All such requests must be submiƩed in wriƟng 15 days prior to the Purchaser Cer Ɵficate expiraƟon
date to the Community Development Project Supervisor and may grant up to a 30-day extension of the
Purchaser CerƟficate.
Upon entering into a contract to purchase a Primary ResidenƟal Property, applicants have 90 days to secure
a mortgage with a FNMA/FMAC lending insƟtuƟon and close Ɵtle on the subject property. The Town of
Southold recommends that your AƩorney or representaƟve include a clause in your contract that nullifies it
in the event that you are found to be ineligible for the Down Payment Assistance Program.
Applicants are required to submit to the Town of Southold's Community Development Project Supervisor
the following documents as soon as they are available:
Mortgage Counseling CerƟficate (copy)
Fully executed Contract of Sale (copy)
Mortgage ApplicaƟon (copy), also known as a Form 1003
Appraisal of the subject property (copy)
Mortgage Commitment (copy)
Fully executed and notarized Down Payment Assistance Agreement, in the form of a Note and
Mortgage.
Proof of UnderwriƟng.
Failure to submit the required documentaƟon outlined above will result in a nullified Purchaser CerƟficate
and the applicaƟon to the program will be considered incomplete.
The Town of Southold reserves the right to nullify and/or void any Purchaser Cer Ɵficate issued for the CHF
Down Payment Assistance Loan Program based on funding availability and any changes in eligibility status
prior to closing because funding is limited.
Town of Southold 7/10/2026
Planning and Community Development Department
CHF Down Payment Assistance Loan – Program Guidelines
For Discussion Purposes Only
Page 7 of 7
CLOSING
The funds will be provided to the applicant by the Town of Southold at the closing, the Community
Development Project Supervisor will aƩend the closing and will provide the check. The Down Payment
Assistance is a zero-interest deferred payment loan that will be re-paid when the house is sold, transferred,
cash-out refinanced, rented out or under any other condiƟon in which the subject property is found to be
no longer the Recipient's primary residence. Recipients will be required to verify on an annual basis that
they are occupying the property as their primary residence.
SECTION IV – ON-GOING PROGRAM COMPLIANCE
ANNUAL COMPLIANCE REQUIREMENTS AND RE-CERTIFICATION
Applicant must reside in the property as their primary residence. An awarded applicant is required to reside
in this property for the enƟre life of the loan.
A monitoring affidavit will be mailed annually to the loan recipient to ensure the subject property is being
maintained and in compliance. If the annual affidavit is not successfully returned on the anniversary date of
the closing of the subject property, Southold town code enforcement reserves the right to perform an in-
person inspecƟon of the home each year. The Annual Affidavit will verify compliance in accordance with
the following guidelines:
Loan recipients are the current owners of the subject property.
The subject property is currently occupied as the loan recipient's primary residence.
The subject property is properly insured and maintained in agreement with the terms of the Note
and Mortgage.
No interest in the subject property has been sold, transferred, cash-out refinanced or rented out.
FAILURE TO COMPLY
The Town of Southold is not responsible to any party for the loss of a down payment or any other damages
which may arise as a result of the applicant’s failure to adhere to the terms of the CHF Down Payment
Assistance Program Guidelines, as stated in this document.
QuesƟons?
Andrea Sullivan – Community Development Project Supervisor
Email: andream@southoldtownny.gov
Phone: TBD