Elgin may use stimulus funds to buy, rehab foreclosed home

Elgin leaders could spend about $281,000 in federal stimulus money to buy and rehabilitate a vacant, foreclosed home on the city's near west side.

The city council on Wednesday will consider a $197,045 bid to restore 318 South Street to a single-family home, install new electrical wiring, plumbing and mechanicals, and upgrade it with energy efficient windows, doors, insulation and a tankless water heater.

The bid by J & B Builders edged out five other companies vying for the project, which comes after the city bought the home in February for $83,900.

In all, the city has purchased 12 homes under the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program. The city received

$2.1 million from the $3.9 billion program to buy, rehab and sell foreclosed homes.

City officials realize some residents might be critical of the project, especially on the heels of a July 14 presentation about possibly spending $454,000 to rehabilitate and upgrade a home for the police department's Residential Officer Program of Elgin, or ROPE.

City Manager Sean Stegall said federal officials saw the program as a way to help with foreclosures and put local construction companies back to work.

"We're buying the worst of the worst," Stegall said, adding that HUD guidelines won't allow the city to demolish any of the homes. "All in all, we're not driving the ship on this. It's HUD's money. We are facilitating the expenditure of federal money under their guidelines."

City leaders expect to award remaining bids on Aug. 25 and Sept. 8. Elgin has more than 1,000 homes in various stages of foreclosure, according to the city.