A Charleston County foreclosure sale Tuesday involved two homes built by the nonprofit group Charleston Habitat for Humanity but also was unusual because the sale could mean a windfall for the Habitat clients who defaulted on their loans.

Both houses on H Street were sold, after spirited bidding, for more than Habitat was owed, which was about $70,000 for each property.

As a result, the people who lived in those homes stand to collect the sale proceeds that exceeded the debt and other costs; amounting to around $10,000 for one property and $20,000 for the other, according to Charleston Habitat for Humanity Executive Director Jeremy Browning.

Both of the houses were built about eight years ago on land donated by the city. Browning said both families apparently moved out last fall, and he does not know where they are or how to find them.

The local Habitat organization does not usually rehabilitate unoccupied properties, and had hoped the homes would be sold.

Habitat for Humanity builds low-cost homes for people of limited means, relying heavily upon volunteer labor, and Habitat homeowners in Charleston typically have a no-interest mortgage costing less than $450 a month.

Habitat doesn't make a profit when homeowners pay their loans over time, but the organization will gain close to $70,000 on Tuesday's foreclosure sales. That's because Habitat homes carry two mortgages; one that represents the cost of building the home, and a second mortgage representing the remaining market value of the property at the time the house is completed.

The second mortgage serves to keep people from flipping the homes or borrowing heavily against them, and is forgiven over time, but that mortgage gets paid back if there's a foreclosure. "We'll go forward from here, get the money, and try to figure out how we can best recycle it into the community," Browning said. "We'll probably use it to buy land."

Both of the H Street homes were purchased by James Peterson, a King Street merchant and real estate investor.

Katy Stech contributed to this report. Reach David Slade at

937-5552 or dslade@postand

courier.com.

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