Q: We would like to put an addition on our small home located in the Chicago suburbs, but money issues have held us back. A co-worker of my husbands mentioned in passing that there are grants available to help with such things.

However when I checked online I couldn’t come with anything. Are there such grants? And, where can I look?

A: There are grants that help low-income families buy homes. Unfortunately, I don’t know of any for homeowners looking to add onto their properties.

Start your search for any grants at your local housing authority. Your city, town, village, township or county will have a department that deals with housing issues. You may find a low-down payment loan, or some sort of subsidy, but I haven’t heard of any direct grant program.

However, FHA, which is under the authority of the federal Department of Housing and Urban Development, does offer a 125 percent home loan, in which you can borrow up to 25 percent more than the purchase price of a home and use the difference to make home improvements — provided the improvements will, in the opinion of the lender, increase the value of the home by the same amount or more.

These loans are called 203K loans, and I don’t know if FHA will do them as a refinance. They’re also expensive, so if you have equity built up in your home, it’ll undoubtedly be cheaper to get a home improvement loan than to do a 203K. You can find out more about these loans at www.hud.gov.

If in your travels you do find out about an organization that’s offering grants for home improvements, please let me know and I’ll pass along any information to readers of this column.

Oct. 21, 2004.