After years of walking by rows of dilapidated houses that line many of the streets in Newhallville, residents of this New Haven neighborhood may see some of those boarded-up homes occupied once more.

The Livable City Initiative received approval to apply for a $210,000 grant from the Federal Loan Bank to construct 10 new housing units in Newhallville at a Board of Aldermen finance committee meeting on Thursday. Community groups have been working to restore housing and to increase homeownership in the Newhallville area for years, city officials said, but even if the federal grant comes through, much more money needs to be allocated to the area to see results.

Like most other development in the neighborhood, the housing units will be constructed primarily for low-income, single-family homeowners, LCI project manager Julie Savin said. Community leaders said increasing home ownership in the neighborhood is a tried-and-true method of strengthening communities. Unlike tenants who might treat their residences as temporary homes, developers said, homeowners are more likely to take pride in their properties. As a result, a neighborhood comprised of a majority of homeowners owners has greater chance for prosperity and stability.

Although a Newhallville redevelopment plan put in place in 1968 was renewed just two years ago, Savin said, a dearth of funding still stands in the way of bringing homeowners to the neighborhood.

“If we could just acquire the funding, we could make an enormous impact in Newhallville,” she said. “But with federal budget cuts and other budget cuts, in the near future, it’s not a definite.”

But even if the grant is awarded to the group, they will not receive the money until the end of the year. Moreover, the grant is only one of many that are needed to put the plan into action, Savin said.

It would take significantly more restoration and construction to bring this neighborhood up to the stability of other New Haven communities, like Wooster Square, that have traditionally received more attention from community development organizations, community developers said.

Ward 20 Alderman Charles A. Blango, who represents the Newhallville district, said bringing more homeowners into the neighborhood will decrease crime and revitalize business in the area. While he said the area is currently occupied by what he called “questionable” establishments, turning it into a stable residential corridor would reduce crime and bring people back into the neighborhood.

“People will live in the city if the houses are affordable and the neighborhood is pretty much safe,” Blango said. “Look down at Orchard St. It was a drug-infested area, but now the crime is way down.”

Habitat for Humanity Executive Director Bill Casey said that over the past few years, his organization has restored 22 houses for homeowners in the area and has seen remarkable results. In such a high-crime, run-down neighborhood, he said, housing renovations can completely change Newhallville’s image and increase home-buyer interest.

“When we first started, the street gangs had pretty much taken over because there were so many abandoned properties,” Casey said. “It was really difficult to find a family that was willing to live there. Housing rehabilitation really turned the area around.”

Neighborhood Housing Services Executive Director Jim Paley said that of the over 250 applicants currently vying for a spot on a waiting list for New Haven houses, many express interest in living in Newhallville.

Paley said his organization is concentrating rehabilitation efforts in Newhallville because of its disproportionate share of neglected properties when compared to other areas in New Haven. He said, like LCI, his organization is currently waiting for the approval to restore a new set of properties in the neighborhood, including some vacant lots.