The first question I need to ask you is if DCFS will be keeping the case open on the 16 MO since they stepped in and the g'ma agreed to take the 3 children. This is important because if there is an open case, you will need to go through them to get legal custody (you shouldn't have a problem since the g'ma asked for your help). If you get the 16 mo, since you are within 5 generations related to the child, you would be considered kinship care, not foster care. You could then apply for TANF (Temporary Aid for Needy Families) which would give you a small stipend per month (how much depends on the state where you live). The child would be considered a household of 1 and have no income, thus qualifying for this benefit. In addition, the child would get Medicaid and WIC benefit. WIC would drop when the child starts school and then would receive free meals at school. Since you know the child has some issues, Medicaid will pay for services, including any counseling for the child and for you. You would have to cooperate with the state in getting a child support order to help pay the state back for these services.
There is a federal law that requires the state to place the kids with relatives first and special attention given to a sibling situation, trying to keep all the kids together when possible. The law also requires that the state (if a case is open) to help the parents reunite by providing drug rehab, parenting classes, regular visitations, etc. BUT, if the child(ren) are kept in the system for 15 out of 24 months and the parents are not reunified by this time, the state is to find adoptive families. They consider relatives adopting first, but if relatives won't/can't adopt (you would lose all the state benefits), they try to place with non-relative adoptions, again trying to keep all the siblings together.
You would not be considered foster care unless you went through the FC system and the classes and became certified. States give more help and money to FC parents, but you also have no guarantees that once the child becomes attached to you (and you to the child), that you would get to adopt the child after the 15/24 rule...so you risk losing the child being a FC parent.
I am in the process of adopting my granddaughter. Drugs didn't come into play until she was over 2 years old, but she remembers that her mom dumped her on me and we just finished 10 months of counseling to deal with those issues (she is 4 now).
If you want to write me privately, I'd be glad to help. It really is a challenge.
There is a website for people in this situation and I have gotten tremendous support from the people there. Go to www.grandsplace.org and read some of the resources there.
Best of luck to you. Over 5 million kids are in kinship care now...a very sad statistic.