Lake Co. set to get $4.6 million for foreclosed homes

As the housing market continues its steep decline, Lake County leaders are poised to receive $4.6 million in federal funds that will help communities hard-hit by the crisis.

The money will allow the county and local governments to buy, rehabilitate or redevelop residential properties that have been foreclosed upon or abandoned, officials announced Thursday.

The grants will not help homeowners struggling to pay their mortgages who haven't yet landed in foreclosure, however, officials said.

Instead, they're hoping to prevent already-empty homes from spoiling entire neighborhoods.

"The idea is to not let these neighborhoods go down," county board Chairwoman Suzi Schmidt said.

The grants are part of a $3.9 billion program orchestrated by the U.S. Department of Housing and Urban Development. The money was made available by the Housing and Economic Recovery Act of 2008, which was enacted this summer.

The county board is expected to accept the grant at its meeting Tuesday, Oct. 14. Committee discussions on how to spend the money will follow, and a second board vote on that plan is set for Nov. 18.

The county can disburse the money anywhere, as long as the projects qualify under the federal rules. Areas with the greatest percentage of foreclosures, the highest percentage of homes financed by subprime loans and those identified as likely to face a significant rise in the rate of foreclosures will be priorities, the rules say.

Eligible projects include:

•Purchasing and rehabilitating abandoned and foreclosed homes to resell, rent or redevelop.

•Establishing land banks of foreclosed homes.

•Demolishing blighted homes.

•Redeveloping properties that have been demolished or are vacant.

•Loans for people to purchase redeveloped homes.

Schmidt hopes officials will be able to buy about 20 homes through the program. Mundelein, Waukegan and the Round Lake area are among the communities they'll likely target, she said.

"It's a little piece," said Schmidt, a Lake Villa Republican. "We're doing what we can to help."

County board member Steve Carlson said it's unfortunate the grants can't help people now fighting to keep their homes.

"This isn't going to save anybody from foreclosure," said Carlson, a Gurnee Republican who leads the board's health and community services committee. "(But) this is a significant amount of money if we use it right."

Lake County isn't the only region in Illinois set to receive the federal funding. More than $172 million has been set aside for the entire state, officials said.