Unclaimed lottery prizes used to construct homes

Roger Alford

Tuesday, Dec. 17, 2002 | 9:27 a.m.

HAZARD, Ky. -- Rachel Miller is a lottery winner, sort of.

The eastern Kentucky woman has never won the jackpot, but yet prize money helped her to buy a home on a hillside in Hazard.

The Kentucky Lottery has given $17.5 million in unclaimed lottery prizes for the construction and renovation of some 3,000 homes and apartments for the working poor and elderly across the state. That includes the $45,000 two-bedroom ranch that Miller bought a year ago.

"I stayed in shock for a long time," she said. "I just couldn't believe it, that I actually owned a house."

Miller, 69, sat at her dining room table on Friday, smiling broadly as she looked around her neatly kept home. She said she never would have been able to save enough from her monthly Social Security checks to buy the home without the housing initiative.

Kim Lyon, spokeswoman for the Kentucky Housing Corp., said the unclaimed lottery prizes go into a trust fund that provides no-interest home loans to people who generally can't make down payments and likely would not qualify for bank credit. The trust fund divvies up the funds with local housing agencies such as the non-profit Hazard-Perry County Housing Development Alliance.

People with incomes as low as $6,000 a year can qualify for the loans, and have average monthly mortgage payments of about $250, said Chris Doll, a housing specialist for the Hazard organization. The mortgage payments generally are far less than monthly rent.

"The majority of our clients are the working poor, who simply don't make enough money to afford a house," Doll said. "They think purchasing a home is an impossibility."

In four years the Hazard group has built or renovated 24 homes and 20 apartments using the unclaimed lottery prizes from the trust fund.

"We've been able to use the unclaimed lottery money to leverage an additional $150 million for the creation or rehabilitation of affordable housing," Lyon said. "That means we're able to help far more people."

Stacey Epperson, executive director of Frontier Housing, a non-profit group in Morehead, said fewer strings are attached to the unclaimed lottery prizes, which allows organizations such as hers to award loans to families with even the most meager incomes.

Epperson said she worries that state leaders may divert the unclaimed lottery prizes into other state programs because of the budget crunch.

"It's critical in today's budget climate that this is protected by the legislators," she said. "A lot of families would really lose if these monies are swallowed up through the budget crisis. A lot of us are fearful of what could happen."

Rick Redmon, spokesman for the Kentucky Lottery, said the prizes used in the housing program go unclaimed for a variety of reasons. Sometimes, people don't realize there are secondary prizes for matching some of the numbers on tickets for the big jackpots.

Some, Redmon said, can't be explained, such as a $1 million jackpot that once went unclaimed, or the several $100,000 prizes that have been unclaimed.

"We're able to generate a lot of different winners in a lot of different ways," Redmon said.

Miller agreed. She said the most she ever won from the lottery was $15 in a scratch-off game.

"This really was a dream come true," she said.