ANDERSON — Anderson will receive $2.1 million in national grants to help redevelop its high number of foreclosed homes.

The city is set to receive the Housing and Urban Development grant by the end of the year and hopes to start work on buying, rehabilitating and demolishing foreclosed and abandoned properties by Jan. 1, Community Development Director Debra King said.

“It’s a good thing because we’re always able to get this money,” King said. “We’re looking at it as an opportunity to stabilize neighborhoods because otherwise we wouldn’t have this opportunity. Our ultimate goal is to acquire, rehabilitate and have an impact on the city as a whole.”

Indiana will get $84 million directly from HUD’s Neighborhood Stabilization Program funds for local units of government and to create a fund available for low- to moderate-income individuals and families who buy abandoned or foreclosed homes.

“No state has acted more directly to help homeowners at risk than Indiana by cutting average property taxes by more than a third, directly reducing mortgage payment,” Indiana Gov. Mitch Daniels said in a release. “Now, we’ll get these new funds to Hoosiers who need them the most and to residents interested in buying otherwise empty homes.”

Anderson is a regular recipient of grants because it is one of the communities most affected by foreclosures, King said. Based on HUD’s formula involving the number of high-cost loans, percent of vacancy rates and percent of likelihood of foreclosures increasing, Anderson is one of the state’s most pressing concerns.

The No. 1 problem facing Anderson homeowners and renters is housing cost, as Madison County is in the 75th percentile of renters paying more than 30 percent of their income to housing, according to a State Housing and Economic Development conference last year.

Lenders predicted a rise in foreclosures for at least another year based on the city’s high-cost loans, unemployment rate and foreclosure rate.

Of the $2.1 million received by Anderson, 25 percent must be spent on families that are 50 percent or below the city’s median income, King said, a number totaling $535,449.

According to a report on the city’s Web site, Anderson will use the money for housing counseling, acquisition, rehabilitation and resale of properties, some razing of properties and post-purchase counseling.

The report estimated that 25 properties would be demolished, 40 would be acquired by the city and rehabilitated for rental or homeownership and 10 rental units would be reserved for low-income families.

“Sometimes reality is that everyone is not meant to own a home, so we will be doing rentals,” King said.

The funds, which Anderson is set to receive as long as it completes HUD’s requirements, must be spent within 18 months.

“It’s an aggressive project,” King said.

The city has just finished its public hearings on the grant and is in the midst of a public comment period that will end Nov. 12. Anyone wishing to see the city’s plan for the funds can log onto cityofanderson.com and click on the 2008 Annual Action Plan Amendment in the bottom right corner of the page.