Money To Purchase Lake County Foreclosed Houses Soon To Flow

December 4th, 2008 | Tags: Foreclosed Houses

The money to purchase Lake County foreclosed houses will soon start flowing in. The officials of the county are poring over applications of federal funds amounting to $4.6 million. This is a piece of the $4 billion that has been allocated by Washington in July as per the Hosing and Economy Recovery Act of 2008. Lake County is planning to buy vacant foreclosed properties with the purpose of repairing them before selling or renting them out.

Approximately there have been 8,100 foreclosures in Lake County in the last two to three years. This is inclusive of 1,900 foreclosures that took place during the last six months alone. A third of the funds will focus on the worst affected communities of North Chicago, Mundelein, Waukegan, Round Lake Beach and Zion. These regions took the greatest numbers of sub-prime loans that has led to this spike in foreclosures in these regions.

To avail of the funds the county has had to submit the details of its requirements and plans for utilization of the same. Vern Witkowski of the Community Development Division of the county said, “It’s kind of like a residential recycling program.” He reiterated that the money would be for acquiring units that are already in foreclosures and not for preventing foreclosure. The property would be taken from the banks at a discount relating to the current appraised value of the property. Then it will be sold or rented out after doing the necessary repairs. This programme had been launched prior to the $700 billion bailout package. Its purpose was to help out banks burdened with bad debts. In the process it decreases the number of vacant foreclosed houses by creating affordable housing for the deserving. The houses would be made available for families with low to moderate income – comprising of 80% of the residents. A quarter of the funds sanctioned by the federal government would be of help to those families whose income is 50% below the average income of the area – amounting to $37,700 for a family with four members.

In the initial stages the county would take on the role of a bank. It would be owners of the units and then endeavour to connect the potential buyers with loans that would be privately financed. The county came to know of the grant towards the end of September. The federal government wants the money to be utilized within a time period of four years.