Groups working to get large chunk of Kane bailout money

Organizations are already tugging at the shirt sleeves of the Kane County Board to make their case for a large chunk of the nearly $2.6 million in federal bailout funds the county expects to receive in coming months.

The county board, on Monday, approved the final version of the application it will send to the federal government in hopes of capturing all the money it is in line to receive as a side benefit of the Fannie Mae/Freddie Mac bailout earlier this year. The idea for the money is to use the cash to turn foreclosed property into "affordable" housing, based on local income averages.

Until now, the conversation about how to spend the money has centered on geography. Carpentersville is at the top of that list as it has the worst problems with foreclosures, subprime mortgages and local unemployment. Both Carpentersville officials and the Realtor Association of the Fox Valley agree with that priority, based on the high number of bank-owned available properties in the community right now.

But now local mental health and developmental disability organizations are banding together in a call to use a large chunk of the money to build group homes throughout the county. Service organizations that work with the mentally ill and disabled say there is a waiting list of more than 800 people seeking affordable housing that services their health needs and income limitations. To put that need in perspective, the Elgin-based Association for Individual Development runs about 29 group homes with about five to eight people per home right now. Dozens of new group homes would be needed to make any sizable dent in the waiting list.

Kathy Hazelwood, a vice president with the association, said there's no way the bailout money will create enough housing to clear the waiting list, but even just three homes in various locations in the county would make a big difference. But that's only if Kane County organizes the distribution of the funds in a way that organizations like Hazelwood's can actually take advantage of it. For instance, if the county uses the money to buy foreclosed homes, renovate and then resell them, Hazelwood said that will likely price not-for-profits like hers out of market for those new, affordable homes. However, if the county gave the money directly to her organization so it could buy the home at a cheaper price on its own, and rehab it with the needs of the disabled in mind, then it might be the blessing they've been waiting for.

"We're just asking for a little piece of the pie to do something good," Hazelwood said.