The Washington, D.C. headquarters of the U.S. Department of Housing and Urban Development. (Tracy A Woodward/The Washington Post)

Developer Steven Madeoy sealed more than one controversial land deal in 2006.

In addition to his dealings in the District of Columbia, Madeoy also owned an aging, 10-unit apartment building in Silver Spring near two schools and a liquor store. He had bought the property in 2004 for $1 million.

Two years later, Madeoy told Montgomery County that he had a contract to sell the property to a company that was planning to convert it into condominiums. The sales price was $1.45 million — almost 50 percent more than what Madeoy had paid two years earlier.

By law, the county has the right to match offers on rental properties. Housing officials decided to buy the complex using affordable-housing money from the U.S. Department of Housing and Urban Development.

Local homeowners at the time questioned why the county would do business with Madeoy, who was convicted of housing fraud in the late 1980s and had been banned for a dozen years from doing business with the federal government. They also criticized the purchase price.

Inspectors estimated that the building needed new kitchens, bathrooms, floors, doors and lights, at a price of $400,000.

At the same time, the appraisal for the property, obtained by The Post, put the market value at $1.4 million — but that was only if the building was turned into condominiums. The county planned to use it as an affordable-rental property. The appraiser was not asked to provide an estimate for rentals, but a handwritten note on the report put the building’s value for that purpose at just $624,000.

County officials could not say who put the note on the report.

The county pushed forward, giving the Housing Opportunities Commission of Montgomery County $1 million in HUD funding, plus $740,000 in local money, to pay for the acquisition and renovation. Officials defended the project, saying they had researched Madeoy’s past and believed the deal was good for the county.

“We always do due diligence,” said Joseph Giloley, housing code and enforcement chief with the Montgomery County Department of Housing and Community Affairs. “We were comfortable with that contract.”

He added that the property was vacant and parts of it had been gutted — priming it for a quick renovation. “Those kinds of properties that are vacant are hard to come by,” Giloley said.

The property was eventually renovated and turned into housing for the homeless.

“Sometimes you just swallow hard and do it,” said Tedi Osias, with the Housing Opportunities Commission. “Real estate is worth what somebody is willing to pay for it.”

Madeoy also defended the deal, saying he had no control over the county’s decision to buy the property for his asking price.

“I asked them why they were paying it,” he said. “I’ll tell you exactly what they said: They had a need, and the need outweighed the economics.”