Elgin to Receive $2.16 Million in HUD Foreclosure Funds

The city of Elgin is set to receive its allocation of $2.16 million from the U.S. Department of Housing and Urban Development to rehabilitate its neighborhoods plagued by home foreclosures and abandoned properties.

Jerry Deering, community development director of Elgin, said that the funds would be spent to acquire and rehabilitate foreclosed properties and to demolish units that have become eyesores. Some portion of the money could also be used to help lower-income families afford the down payments of restored repo homes.

The city will work with neighborhood associations such as the Chicago Community Loan Fund and the Neighborhood Housing Services of Elgin to identify the neediest neighborhoods and to distribute the money according to a set of factors.

The factors would include percentage of house foreclosures, percentage of subprime mortgage loans taken, probabilities of further increases in foreclosures and extent of positive impact on the area.

In addition to Deering’s proposals, Matthew Fitzgibbon, Elgin’s assistant community development manager, also said that portions of the funds will be spent to revive older neighborhoods around Elgin’s downtown. At a public meeting where city council leaders approved Elgin’s allocation application, Bill Klaves of Northern Fox Valley’s Habitat for Humanity called on the leaders to consider Habitat as a partner in the community rebuilding program.

The $2.16 million is part of the $3.92 billion Neighborhood Stabilization Program established by the HUD to enable states to help their communities with the highest rates of foreclosures. The Housing and Economic Recovery Act that authorized the neighborhood program required that the funds must be used to help families whose income does not surpass 120 percent of average income in the area.

Other Illinois cities receiving funds from the HUD’s neighborhood stabilization and foreclosure prevention program are Chicago, Cicero, Aurora, Joliet and Rockford, with the city of Chicago receiving $55 million.