LAKE PLACID - Eight years ago, Highlands County's housing department helped a citizen raze her own dilapidated house with $44,519 in Florida State Housing Initiatives Partnership funds and another $44,316 from the federal HOME Investment Partnerships Program.
After the woman and her daughter died, there was no one to pay the mortgage, so the county took back the Highway Park house.
On Tuesday, however, the county sold that $89,000 house at 104 Taylor St. for $35,000 to Habitat for Humanity, which plans to rehabilitate it and resell it for affordable housing.
"You might call this a poster child for why the guidelines were changed," said Highlands County Commissioner Don Elwell.
Both Elwell and Commissioner Jack Richie questioned whether the house was ever worth $89,000, even during the housing boom.
"I can't make a judgment on what happened eight years ago," said Richie, who has seen the home in its current condition. "But would I have made that decision? Absolutely not."
"It looks like a $35,000 house to me," said Elwell, who has seen photos of the house, which is now boarded up but otherwise in decent shape.
John Hawthorne, executive director of Habitat for Humanity in Highlands County, said his $35,000 offer was based on an appraisal, which compared three recently sold homes in Lake Placid.
Because the old home was demolished eight years ago and rebuilt on a lot owned by the homeowner there was no appraisal, said Highlands County projects manager Chris Benson.
State SHIP dollars can fund emergency repairs, new construction, rehabilitation, down payment and closing cost assistance, construction, gap financing, mortgage buy-downs or affordable housing. Federal HOME funds could be used for similar purposes, and the county housing department often combined one, for instance, to repair the home, and another to buy it.
"There were a couple of funds where they had double dipped," Elwell said.
A year ago, the commissioners were required to forgive almost $500,000 in loans to homeowners because that's what was required at the time mortgages were signed.
"This looks like a pretty good example of why we changed those guidelines for the housing program," Elwell said.
"There are no more loans like that," Richie said. "Now, you have to pay back every penny."
Even so, commissioners saw the sale of the Taylor Street house to the local Habitat as a good idea.
"It takes a house that was off the tax roll and puts it back on the tax roll," Elwell said.
Richie said after the owners died, the vacant house was vandalized.
"So it's a win-win situation for Habitat and for Highway Park," Richie said. "And it takes a lot of pressure off the sheriff from people breaking in."
After five large banks conceded liability in the housing loan scandals, the federal government and 49 state attorneys general announced a landmark settlement to address mortgage loan servicing and foreclosure abuses. The five major banks provided over $25 billion in relief to homeowners.
Since most of the money went to the hardest-hit states, Florida received $8.4 billion, Hawthorne said. Highlands County Habitat qualified for $480,000.
However, the money must be spent by June 2015, and Highlands has one of the most productive Habitat chapters in the state. Therefore, it may receive more money, Hawthorne said.
Habitat is trying to acquire houses that can be rehabilitated and returned to the affordable housing market, Hawthorne said. "We have to do eight houses, but if we can do 12 with the $480,000, we will.
Will Highlands County have more houses to sell, he asked.
Benson said he working on that list, which could be ready next month.