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Councilman rents SHIP house; county could file lien for $45K balance on taxpayer-funded loan

The Foster SHIP on February 27.Glen town councilman Morris “Dickie” Foster is renting out a house formerly occupied by his late mother — a home paid for with an interest-free, deferred payment loan from the government that prohibits the property’s sale or lease until 2028.

The county manages the taxpayer-funded loan program known as SHIP (State Housing Initiatives Partnership) and holds a mortgage on the property for the balance of the loan, some $45,000.

The county has no plans to stop Mr. Foster from renting the house, however.

Mr. Foster, a plumber whose company worked on the SHIP house, purchased the property on which the home sits at 10255 N. Glen Ave. in 2005.

At that time there was an existing 844-square-foot, wood-frame house on the small lot next door to Mr. Foster’s residence.

Property records indicate the sale price was $60,000. Mr. Foster put $9000 down and took out a $51,000 mortgage to finance the remainder of the purchase, court records show.

He deeded the property to his mother, Floy Lee Foster, two years later in 2007.

About a year after the deed transfer, on August 28, 2008, a suspicious fire caused some $10,000 in burn and smoke damage to the structure, which was valued at $45,000.

The county fire department summoned the State Fire Marshal’s office to investigate the cause of the fire because there were two source locations — a bathtub in a rear bathroom and the headboard in a front bedroom. The fire marshal’s report states Mr. Foster and his wife were suspected of arson, but there wasn’t enough probable cause to charge either with the crime.

The Foster SHIP file shows an insurance check for nearly $45,000 was issued to Mr. Foster after the fire. It was used to pay off the balance of the bank mortgage on the property, about $27,000, the file indicates.

About the same time, Mr. Foster, with his mother as the applicant, sought a deferred payment loan through the SHIP program, which supplies funding for new homes, or home repairs, for elderly or disabled homeowners with low to moderate incomes.

The purpose of the program is to keep the state’s most vulnerable homeowners from becoming homeless.

At 73 years old with a respiratory condition and only Social Security checks to show for income, Ms. Foster met all the criteria to be eligible for the SHIP loan.

Taylor Made Homes of Glen St. Mary was then contracted by the county to build the Foster home for $45,080, though additional expenses put the final price tag near $58,000. The county issued the last check to Taylor Made Homes in June, 2009.

The Foster SHIP file does not reflect payments the contractor made to its subcontractors, including Mr. Foster’s business, Dickie’s Plumbing.

Mr. Foster said he invested some $30,000 of his own money for upgrades to the new 1000-square-foot SHIP house as well.

The property appraiser’s office values the structure at $47,079.

As long as Ms. Foster occupied the house, the balance owed on the SHIP loan would automatically drop 5 percent each year over 20 years, according to an agreement signed by Mr. Foster with the county. His signature is found on most of the paperwork in his mother’s SHIP file.

Such loan forgiveness is a staple of the SHIP program, but it’s also why the program is tightly regulated. SHIP-funded homes are supposed to be occupied by the applicants who qualified for the program, so selling or renting them before the loan balance reaches zero is explicitly prohibited.

Should an applicant die during the 20-year lien period, the loan agreement states in large bold letters, “the deferred payment loan will remain on the property. All heirs and successors will be held to the same rules and regulations, as did the applicant(s).”

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