In Bellwood, Ill., there were two problems. People left because the housing wasn't equipped to handle growing families and there was no one to build new homes. So,the local government decided to take matters into its own hands.

So [Mayor Frank] Pasquale and the village board went into the home building business, an unusual venture for a town's administration.

"We'll build what people are telling us they want in Bellwood," Pasquale said.

So, far the community has sold eight homes with 12 more homes on the way.

The home building program is essentially self-supporting, Tsiolis said [Peter Tsiolis, chief of staff for the village]. In 2012 the village allocated $200,000 from its general fund to build the first house, he said. Since then, the proceeds from each sale go to fund the next house. Tsiolis said the village rolls the proceeds forward, but he declined to say how much of a final sale price covers construction and how much is left to roll forward.

Each phase of houses also paves the way for higher prices on the next round. The first group's prices started at $212,500, the second at $220,000. Each round of sales "builds confidence in our market," Tsiolis said.

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