NASHVILLE, Tenn. -- A program to help disadvantaged businesses in Nashville ended up buying a half-million dollar house near a beach, the I-Team reported.

Video: I-Team: Nashville Small Business Loan Money Spent Elsewhere

Owning a business is part of the American dream to some people.

Edward Stevenson owns wholesale coffee business Kijiji Coffee. He said his business grew thanks to a loan program reserved for Nashville's disadvantaged businesses.

"We paid the first loan off about three years early," he said. Kijiji is one of the program's success stories.

But the I-Team reported that up-and-coming local businesses aren't the only ones cashing in under the program.

Loan money earmarked for Nashville ended up 500 miles away in the Bay St. Louis area of Mississippi in the form of a house on the beach that cost $467,000, the I-Team reported.

The money the I-Team reported that was spent on the house is meant only for downtown Nashville.

So how did Nashville money end up funding a beach house?

Clint Gwin of Southeast Community Capital said he wants to know how the I-Team obtained confidential documents about the funding of the Bay St. Louis house. Gwin is the CEO of SCC.

SCC is a sort of nonprofit bank that gets money both from the government and from private banks and then lends that money to disadvantaged businesses like Kijiji Coffee.

SCC makes loans all over the area, but one portion of the money is restricted and is only for creating jobs around downtown Nashville with a special emphasis on the "pocket of poverty" area.

The I-Team reported that the money left Nashville, went out of state and landed with a nonprofit called The Resource Foundation.

"We're helping a small business in Nashville take advantage of an opportunity to grow," Gwin said.

The Resource Foundation is legally chartered in Nashville, but its own brochure said it moved its operations to Baton Rouge, La., in 2005. The foundation builds affordable houses.

The construction manager of the foundation lives in the house on the beach and uses it as an office.

Latimer is a good friend of the people who made the loan at SCC, the I-Team reported.

"I don't think we've broken or violated any rules or (regulations)," said The Resource Foundation CEO E.D. Latimer.

Latimer defended the loan for the Bay St. Louis house and said that although they work in the Gulf, they're based in Tennessee.

"We're a Tennessee corporation," he said.

But the I-Team’s Nancy Amons reports that what the I-Team found doesn't sit well with the government agency backing the loan.

"Absolutely, I'm concerned," said Metropolitan Development and Housing Agency Executive Director Phil Ryan.

The MDHA put up more than $250,000 to support the Nashville Loan Fund, which is comparable to a guaranteed student loan.

"Upon learning of this, I called them immediately and said, 'If there is any loan loss, do not use our funds to make good on it,'" Ryan said.

So why would SCC lend almost $500,000 of its Nashville-only money to Latimer's nonprofit?

The clues may be in a confidential loan document. The confidential papers were written to SCC's board telling them why they should approve Latimer's loan. The papers imply Latimer is important to them and that he helped SCC grow in Nashville. The documents also mention that Latimer is chairman of the Tennessee Housing and Development Agency and that Mr. Latimer helped SCC in attaining meetings with state officials.

"This is our internal credit analysis," Gwin said.

"What did you mean when you said that he was helpful in attaining meetings with state officials?" Amons asked.

"Eddie never helped us attain a meeting with state officials," Gwin said.

"Why would you write that in a loan analysis? For puffery?" Amons said.

"No. It's a misstatement," Gwin said.

"Who wrote that document?" Amons said.

"I did," Gwin said.

"Why would you write something that's a misstatement?" Amons said.

"Unintentionally," Gwin said.

"I've never talked to a state official or anything on their behalf," Latimer said.

SCC's board approved the loan even though its own Web site said the company doesn't make loans to nonprofits. Gwin said they made an exception.

"Did this help create any jobs in downtown Nashville in the pocket of poverty?" Amons said.

"I haven't seen the latest statistics, I'm not sure," Gwin said.

Latimer told Amons that he has spent some weekends at the Gulf Coast house and that he's stayed overnight there six times.

According to the internal loan documents, a private bank was going to finance the house purchase, but the bank backed out on closing day because the non-profit showed big operating losses.

If you would like to talk to the I-Team's Nancy Amons, you can call her at 615-353-2284 or send her an e-mail.