The state of Illinois will launch a $55 million pilot program to finance the rehabilitation of previously foreclosed homes and help potential homebuyers purchase them.

Of the funds, roughly $50 million will be used to purchase and rehab at least 500 properties in the Chicago area. The state will grant the other $5 million for up to 500 families to buy vacant homes. Each family could get up to $10,000 to help with a downpayment.

Mary Kenney, executive director of the Illinois Housing Development Authority, said the Chicago region has the highest inventory of vacant foreclosed homes in the nation.

According to Woodstock Institute, the area has more than 18,000 of these empty properties.

"This program represents a multifaceted approach and is an important part of Governor (Pat) Quinn's overall housing strategy to address the economic, public safety and quality of life issues caused by abandoned and foreclosed properties," Kenney said.

The state has committed $58 million from the federal Neighborhood Stabilization Program, and has restored nearly 450 foreclosed or vacant homes.

"By turning vacant properties into affordable housing, we're assisting existing homeowners, strengthening hard-hit neighborhoods and boosting affordable homeownership options for working families," Gov. Pat Quinn said.

jprior@housingwire.com