East Hampton to pilot 10 ADU construction loans of up to $100,000

Housing director Mark Morgan Perez outlined a pilot ADU construction loan program that would offer up to 10 interest‑free loans of up to $100,000 each from the Community Housing Fund. Key program terms presented: the homeowner must occupy the primary residence; ADU tenants must use the ADU as their sole legal residence and sign leases of at least one year; tenant income limits will follow community housing fund rules (examples cited: ~$197,880 for one–two person households and ~$230,860 for three–four person households); loans will be secured by a subordinate mortgage and repayable upon sale of the property; building permits must be obtained within six months and a certificate of occupancy issued within 30 months of loan approval.

Mark described a phased rollout: the office will publish application materials online, accept applicants in an initial window, screen for eligibility, and — if demand exceeds funding — use a public lottery to determine review order. Board members pressed for clarity on documentation and verification; staff said full income and building‑department verification would occur at a later vetting stage to avoid overwhelming departments during initial intake. The board agreed to extend the proposed 30‑day application window to 60 days for the first round and to accept applications on a rolling basis thereafter if funding remains.

Board discussion also covered program caps tied to school district ADU limits, the potential to expand funding in future rounds, insurance and mortgage security for loans, progress payment scheduling to control disbursement risk, and the need for clear application guidance. No additional funding beyond a proposed $1 million appropriation (to support the pilot) was authorized at the work session; a formal resolution was anticipated on the Thursday agenda.