Kane County wants the cash

Kane County will likely go ahead and apply for $2.57 million the federal government is handing out to help communities deal with the effect of home foreclosures and work out how to spend it later, instead of letting the money go to the state.

The county board directed the county staff to present an application for the Neighborhood Stabilization Program to the board's executive committee Wednesday, Nov. 5, as well as a proposal to amend a current county document governing the use of federal development grants to account for this program. The application would then be on public display for 15 days, wrapping up with a hearing Nov. 21.

The county board would then vote on it at a special meeting Nov. 24 or 25, just in time for the Dec. 1 deadline for applying for the money from the Department of Housing and Urban Development.

"I'm sure if we work hard we can find uses for it," said board member Don Wolfe of Elgin.

The money comes from the Housing and Economic Recovery Act of 2008 adopted in July, and the county found out it was eligible for the money in late September.

The committee decided it didn't need to have all the details figured out now as to how the county would spend the money, which can be used to buy abandoned or foreclosed homes, create landbanks of foreclosed properties, demolish blighted structures or redevelop demolished or vacant properties. Those actions must result in the creation of "affordable housing," defined as affordable for someone to rent or buy whose income is 120 percent or less of the local average. If the property bought is already affordable housing, it must remain so to people whose incomes are 50 percent or less of the average.

The county could run its own program, team up with another government body participating in the program, or hire an outside agency to handle it.

Because Elgin and Aurora are also eligible to separately receive money from HUD, it's likely the county wouldn't spend any of its money in those cities, according to Mark VanKerkhoff, the county's director of building and community services. Aurora is in line for $3.08 million, and Elgin $2.16 million.

And the villages of Barrington Hills and Algonquin don't participate in Kane County's community block development grant program, so they wouldn't be eligible, either.

The county would have to figure out where its areas of greatest need are, by HUD standards that take into account number (minimum 40) and percentage (minimum 2.5 percent) of foreclosures, percentage of subprime mortgages and percentage of unemployment. Carpentersville leads incorporated towns, with 682 foreclosures, 33 percent subprime loans and a 6.5 percent foreclosure rate from January 2007 through June 2008, according to data from HUD. In unincorporated areas of the county, there were 1,046 foreclosures, and a foreclosure rate of 3.7 percent, with 18 percent subprime loans. "We have to take advantage of the federal money and help some area residents," said board member Michael Kenyon of South Elgin. The measure was approved 16-0. Members Paul Greviskes, Holly Kissane, Donnell Collins, Bonnie Kunkel, John Fahy, Bob Kudlicki, John Noverini, Arlene Shoemaker and Bill Wyatt were absent.

If Kane County does not apply for the money, it will be allocated to the State of Illinois.

Help: Elgin, Aurora eligible for separate amounts