Partner Tim Toben says the project's 15 affordable units found buyers within months of being on the market and helped meet Bank of America's requirement that half of the 97 units be under contract in order for the developers to obtain the loan. The bank looked at the number of units sold, not the value of the units, he said.

The affordable units "certainly played a role" in securing the financing for the project, Toben said. "And it was a positive role at the time."

Greenbridge now faces foreclosure and has a sale date of June 27 unless Bank of America and the developers can negotiate an alternate buyer.

When Bank of America gave developers their $43.5 million loan for the project in July of 2008, Greenbridge had contracts on 52 units; 37 of those closed, and 15 were still pending.

After the building opened last summer, eight of the 15 pending contract holders backed out because they no longer qualified for their loan, or changed their minds, Toben said.

Of the 37 units that closed, 15 of them were the affordable units.

There are still 15 contracts pending, but those prospective buyers are unable to close because of the liens on the project. The longer they are pending, the less likely they'll close, Toben said.

Before the bank started foreclosure, it agreed to sell the next 10 units at a 15 percent discount. Toben said he's not sure if that discount will stand as the property gets new owners.

The demand curve

Banks typically look at the value of the pre-sales for a condominium project, not the number of units, said Tony Plath, an associate professor of finance at UNC-Charlotte.

"A good lender is going to take that into question," he said. "If you're going to subsidize something, the demand for it is going to be higher as a consequence ... that doesn't tell you whether the market is receptive to the project."

"The demand curve associated with subsidized housing is going to be completely different than the demand curve associated with market-driven housing," he said.

Bank of America declined to comment.

Homeowners in the affordable units have not been affected yet by Greenbridge's financial problems, said Robert Dowling, executive director of Community Home Trust, which sells affordable housing for the town.

The bank has been paying the homeowners association fees for unsold units that would normally be paid by the rest of the market-rate owners, he said.

If units remain vacant and the bank stops contributing, however, it could eventually hurt affordable-unit homeowners, who pay about $120 to $150 per month in homeowners association fees, which are based on the price of their unit, Dowling said.

Owners of market-priced condos also subsidize the affordable units by contributing 0.6 percent of the value of their units to the Home Trusts Transfer Fee Fund. The fund keeps the affordable units affordable by paying for condo repairs and kicking in extra money if homeowner fees go up. The fund has about $75,000 now, but if no additional payments are made by market-rate homeowners, the fund could become strained.

"I think there's a lot of uncertainty right now," Dowling said. "Hopefully there's some resolution."

Interesting question

Chapel Hill requires developers to price 15 percent of new residential units as affordable housing for households that make less than 80 percent of the area median income.

If large projects like Greenbridge are using the town's affordable housing mandate to help obtain funding, that would be an "unintended consequence," said Town Manager Roger Stancil.

"It's an interesting question," he said.

Some community members have also asked whether the outcome of the affordable housing mandate is meeting the town's goals, which included attracting a diverse group of people, including families, to the new projects in town.

Last month, the town held about 60 information sessions for different groups to develop a mission statement for the policy and get feedback on demand for housing, who is buying it, and how the policy can best serve the community.

The majority of the condominium affordable housing is being bought by single people, not families, said Dowling. Most units like the ones in Greenbridge are too small for a family, he said.

"I think we have enough condos for the time being," Dowling said. "Condominiums are a challenge. They present risks that are difficult for us to manage."

Affordable at East 54

At East 54, developer Roger Perry offered to make 30 percent of the project's units affordable, double the amount required by the town. Adding more affordable units helped diversify the residential base of project, but also helped get it passed by the council, he said.

"From a business standpoint, we thought that that would be something that the Town Council would like and might make it easier for us to get our approvals through," he said. "Certainly we lost money on the actual affordable units, but you've got to ask yourself the question, what kind of approval would we have gotten without the affordable homes?"

The affordable units did not help Perry finance his project. To get a loan for East 54, he had to show that half of the market rate condos were under contract.

"The more affordables we built the more we lost, so they had to be sure we could sell the market rate ones in order to pay back the loan," he said.