The historic Denniston House on Masonic avenue in Oak Bluffs was sold at a public foreclosure auction yesterday for $500,000 to a well-known Oak Bluffs architect, marking a final chapter in the Martha’s Vineyard Housing Fund’s troubled ownership of the property.

The new owner of the property is Chuck Sullivan, a partner at Sullivan O’Connor architects in Oak Bluffs. Mr. Sullivan has been active in community affairs on the Island and among other things has served on the board of directors for the YMCA. His firm has been involved in numerous Island building projects, including commercial renovation projects. But following the auction yesterday, Mr. Sullivan hurried to his car and refused to comment to the media.

The housing fund, formerly named the Island Affordable Housing Fund, paid $905,000 for the property in 2007 and later launched an ambitious $5 million plan to convert the property known as Bradley Square to a mix of affordable housing, artist work space and an office for the Vineyard chapter of the NAACP.

That dream ended yesterday just after noon with the sound of an auctioneer’s voice calling out, “Sold.”

Chuck Sullivan registers as a bidder with auctioneer. — Ivy Ashe

The nonprofit housing fund, which was carrying a $760,000 mortgage on the property that it had defaulted on more than a year ago, still owes a sizeable sum of money on the note to the Martha’s Vineyard Savings Bank. The bank initiated foreclosure proceedings against the fund early this summer, also freezing the fund’s cash accounts at the bank.

“It’s a really sad day,” said housing fund executive director T. Ewell Hopkins, who was not the director when the property was purchased. “It’s symbolic of an undisciplined era and an undisciplined approach to solving the housing needs on the Island. The bank shouldn’t have lent us the money, we shouldn’t have been willing to borrow the money. It was an undisciplined culture,” he said.

The auction was attended by a small group of about 10 people, including three bidders: Mr. Sullivan, Matt Viaggio, an Island contractor and abutter to the property, and the bank.

Standing before the front steps of the historic building that was the Island’s first African American church, auctioneer Jim Peterson started the bidding at $700,000 and was met with silence.

Mr. Sullivan bid $400,000 and was matched by the bank up until his winning bid of $500,000. The bank’s final offer was $495,000. It was unclear whether Mr. Sullivan and Mr. Viaggio had joined forces in the purchase; the two independent bidders spent some time conferring during the auction and after it was over both men spent time conferring with the bank’s attorney.

The bank was represented at the sale by executive vice president Brad Egan.

Auctioneer Jim Peterson started the bidding at $700,00. — Ivy Ashe

Also attending the sale was Oak Bluffs selectman and housing fund board member Walter Vail.

Reflecting on the original purchase of the Bradley Square property, Mr. Vail was frank.

“It was a terrible thing for the fund to do,” he said. “Hindsight’s always 20/20 but the fund didn’t have a flow of funds that they could count on to pay the mortgage.” The fund had placed the property on the market in September 2010, but there were no buyers.

Mr. Hopkins expressed surprise at the sale price. “I’m absolutely amazed at the price,” he said. “It makes no sense at all. I feel as though we could have done better — the collective we — if we were working together better.”

Mr. Hopkins has been openly critical of the bank for freezing the fund’s cash accounts totalling some $63,000, including grant monies the fund had collected for child care assistance. In banking terms the action taken to freeze accounts in the event of a foreclosure is called a right of setoff and is considered a normal practice.

Mr. Egan had no comment on the fund’s remaining obligation to the bank and how it will be handled, saying that the matter involves privileged communication between the bank and its client. But he did say: “It would have been terrific for everyone involved if the sale had been at a higher level and the situation were resolved cleanly.”

The Masonic avenue house was dedicated as a mission for Portuguese immigrants at the turn of the last century before serving as the Island’s first black church for nearly 40 years under the ministry of the Rev. Oscar E. Denniston.

Mr. Vail said he was not surprised by the sale price and said that the future of the housing fund is at best uncertain.

“We’re just trying to survive right now,” he said. “We’re hoping people will rally behind us but we’ll see. We just don’t know.”