The WCHT secured an option from the Myfield owners for the 13-acre parcel at 107 Mygatt Road and planned to build 11 houses, to be sold as affordable.

The trust hoped to qualify for a $1 million HOME grant from the state Department of Economic and Community Development to help finance the construction.

The WCHT has committed $25,000 of its money and secured an additional $10,000 LISC (Local Initiatives Support Corporation) grant. The total cost of the project is estimated at $3.1 million.

The Housing Commission voted down the motion to approve the funds by a 3 to 1 margin.

Commission Chairman Wayne Hileman and Commissioners Andy O'Hazo and Jean Suddaby voted against the funding; Commissioner Sue Werkoven was the lone vote in favor.

Mr. Hileman, in discussion with the commissioners, observed that there was much to like about the WCHT project and noted that the group's success rate with other projects is commendable.

He criticized the trust's financial plan, as well as the explanation for the ultimate acquisition for the land, which he called "murky."

Commission members also questioned the trust's plan for three two-bedroom homes, stating that most families prefer a three-bedroom home. The WCHT plans also call for four, one-bedroom and four, three-bedroom homes.

But the deal breaker, according to Mr. Hileman, was the uncertainty of state funding.

"I can't speak for the other commissioners except to say it was clearly a difficult decision," said Mr. Hileman. "For me, assessing the likelihood of state funding was crucial.

"Without it, there would be no project and the town would have nothing to show for its investment. The trust's high level of confidence in receiving a state grant was not supported by the available facts."

The WCHT planned to apply for the state grant earlier this year, but the DECD placed a six-month moratorium on the program.

DECD Commissioner Joan McDonald modified that moratorium recently to allow the consideration of home ownership projects in areas of the state that have, and can document, a need for such housing.

Part of the prerequisite to apply for the state funding, however, is documented evidence of favorable local support and a completed application, which the WCHT cannot provide without the start-up money it requested from the Housing Commission.

Those funds would have covered architectural and engineering expenses to provide information for the state application.

Should the WCHT submit an application but not receive the funding, the initial investment would be lost.

This was the commission's biggest concern.

Mr. Hileman noted that, in speaking with the state, he learned that some $12 million has been allocated for 2009 to the HOME program. At present, there are 18 applications for an aggregate amount of $44 million.

The state is hoping additional federal money will be forthcoming, but there is no guarantee.

"Demand outstrips supply," observed Mr. Hileman. "There's no other way to look at it."

Mr. Hileman asked the WCHT representatives if they would consider a conditional approval, that being the Housing Commission would allocate the funding if state approval was obtained.

The problem, said WCHT President Richard Sears, is that the money is needed to complete the application, without which the state will not consider the project.

"The trust is confident they'll get the state money," said Mr. Hileman. "I don't share that confidence."

Speaking at the meeting for the WCHT, Walter Whitney told the commission, "We are at the front of the line being able to meet the state requirements."

Mr. Whitney said the state does have other sources of funding that could be considered once a completed application is submitted.

Following the meeting, Mr. Sears said he was "stunned" by the commission's decision, but the WCHT is not giving up.

"The commission's praise in support of WCHT's ability to complete this project seemed drowned by a sea of distrust of the state and a fear that it would not, in the end, fund this excellent proposal," said Mr. Sears.

"WCHT desired to bring the case for these affordable homes to a Town Meeting to let the people decide.

"The Housing Commission has denied us this right of the people to decide. I would like to think that this action is not indicative of public antipathy toward providing affordable homes for persons of modest means who live, work or volunteer here.

"WCHT appreciates the many expressions of support and will continue its relentless pursuit of providing a diversity of housing options for Washington."

Mr. Sears said the trust will explore other avenues through which the pre-development costs could be covered as well as the option of conditional approval of funding by the Housing Commission.