ELYRIA — The Lorain County Habitat for Humanity thinks it might be able to turn the foreclosure crisis into a way of helping families get back on their feet.

Executive Director John Keaton said his organization is considering moving away from building new houses for needy families, instead grabbing low-priced ones that have been foreclosed.

“One man’s misery might be our pleasure,” he said. “It’s a shame to say, but as long as we can keep putting families in houses that previously didn’t have them, that’s a good thing.”

Building a house from scratch costs about $100,000, but buying and rehabilitating an existing house would take only about $40,000, Keaton said.

Like just about everyone else, Habitat for Humanity has been hit by hard economic times.

Keaton said there’s been a 25 percent dip in donations over the past 19 months, and much of the problem can be traced to inflated gasoline prices. Donors that used to be able to spare a few dollars here and there are now saving them up for the $50 or $60 hit on each trip to the pump, he said.

Also, competition for federal, state and local grants has grown, Keaton said.

There are about three times as many groups as usual “crowding around the trough right now asking for the grant money,” he said.

“That’s making it hard to tap some of the funds we usually get,” he said. “We’re not giving up, but we have to do something different with the way we get funding.”

He said another option is building smaller houses to save on material costs. But right now, rehabilitating foreclosed homes seems like the route to take, especially when they are so readily available, Keaton said.

“We kind of have the pick of the litter,” he said. “There are so many houses out there that are empty.”

He said now would be the perfect time to test-drive the new strategy — when 1,268 homes in Lorain County have been foreclosed so far in 2008. By the end of next week, 1,373 are scheduled to hit the county’s auction block, including 91 properties that go up for sale Wednesday.

A massive mortgage relief bill signed this week by President Bush is expected to give an estimated $4.2 million to county homeowners, but Keaton said in the meantime it would be smart to purchase homes that already have been lost.

Oberlin Economic and Housing Development Officer Tita Reed agrees.

She said Keaton’s plan is not only sound but likely will buoy neighborhoods where Habitat for Humanity rehabilitates homes.

“The thought here is that the greenest building is the one that’s already standing,” she said. “Rehabbing homes would be one of the best routes to go. It would be clean and cost-efficient.”

Oberlin, Elyria and Lorain are the three cities that the county Habitat group primarily targets, Keaton said.

Reed said that when Keaton’s organization takes on a project, it’s a safe bet that neighbors will be inspired to clean up their properties, too, which results in an upward spiral that raises property values.

However, she warned that there’s a slight downside.

Improving property values in some neighborhoods would mean that low-income residents might not be able to afford increased tax bills, she said.

But Reed was adamant that the positives of rehabilitation far outweigh the negatives.

Keaton said it’s important to note that none of the houses built in the county by Habitat for Humanity has ever been in foreclosure.

And — by reducing the cost of each project by about $60,000 — it would mean the charity could help more families each year, he said.

Last year, the group built four houses. Keaton said Habitat is currently working to build two more: one on 19th Street in Elyria and another on Pleasant Street in Oberlin.

Contact Jason Hawk at 329-7148 or jhawk@chroniclet.com.

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