FHLBank Chicago Grants $62 Million for 1,786 Affordable Units

By Grace Kim

FHLBank Chicago announced $62 million in 2026 Affordable Housing Program General Fund awards for 47 projects that will support 1,786 affordable housing units across Illinois and Wisconsin.

The awards will finance acquisition, rehabilitation and construction. They also include an additional $10 million approved by FHLBank Chicago’s Board of Directors to expand support for affordable-housing development.

FHLBank Chicago said the grants address affordability pressures as development costs rise and housing supply remains constrained.

Michael Ericson, President and CEO of FHLBank Chicago, said:

“Affordable housing remains a pressing need across Illinois and Wisconsin, as rising development costs and limited housing supply continue to challenge communities. By increasing our investment in this year’s AHP General Fund, we’re able to support more affordable housing and help our members and community organizations move critical projects forward.”

What does the Affordable Housing Program fund?

FHLBank Chicago operates as a regional member-owned cooperative within the Federal Home Loan Bank System. Its member institutions include commercial banks, credit unions, insurance companies, savings institutions and community development financial institutions.

Under the Affordable Housing Program, FHLBank Chicago provides grants to projects sponsored through participating member institutions. FHLBank Chicago said applications come from housing developers, government organizations, public housing authorities, tribally designated organizations and other eligible participants.

The bank said the grants help bridge the gap between the cost of providing affordable housing and the financing available through other sources.

Which projects show the range of the 2026 awards?

Reclaiming Chicago NFP received support for the construction of 24 affordable single-family homes on vacant city-owned lots. The homes will be developed across four Chicago neighborhoods: Back of the Yards, Roseland, North Lawndale and Washington Park.

First Eagle Bank, an FHLBank Chicago member, sponsors the project. United Power for Action and Justice organizes the initiative, bringing together civic and religious organizations. Five nonprofit development partners are participating.

FHLBank Chicago said the project is intended to expand homeownership opportunities and return vacant properties to productive residential use.

First Eagle Bank also provided a $1 million interest-free loan. FHLBank Chicago said the combined financing and grant support are intended to help move the project toward construction.

Faruk Daudbasic, Senior Vice President of Commercial Lending and Community Development at First Eagle Bank, said:

“FHLBank Chicago’s Affordable Housing Program plays an important role in closing financing gaps and making affordable housing projects possible. We’re proud to support Reclaiming Chicago’s efforts to transform vacant lots into affordable homes and create meaningful homeownership opportunities for Chicago families.

Beyond sponsoring the AHP grant, First Eagle Bank has also provided a $1 million interest-free loan to help advance this important initiative. We strongly believe in Reclaiming Chicago’s mission, and their efforts to revitalize neighborhoods and expand affordable homeownership have certainly not gone unnoticed.”

Another award will support Milwaukee Development Corporation’s conversion of a former hospital into affordable apartments. The redevelopment will create 124 residences for adults ages 55 and older. Twenty-five units will be designated as supportive housing for residents with disabilities.

Associated Bank sponsors the project through the Affordable Housing Program. Jewish Family Services will provide on-site services to eligible residents. FHLBank Chicago said the redevelopment is intended to preserve a historic building and add affordable housing options for older adults.

Pat O’Brien, President of Milwaukee Development Corporation, said:

“This development will bring much-needed affordable housing to Milwaukee while preserving an important part of the neighborhood’s history. We’re grateful to FHLBank Chicago and Associated Bank for supporting a project that will help older adults live independently with access to the services they need.”

How large is the program’s cumulative impact?

Since the Affordable Housing Program General Fund began in 1989, FHLBank Chicago said it has allocated more than $630 million in grants through the end of 2025. The bank said those investments have helped provide housing for more than 85,000 households.

The 2026 awards cover multiple housing needs and development approaches, including new construction and the reuse of existing properties, FHLBank Chicago said.

The bank called the latest $62 million allocation another significant commitment to affordable-housing development across its two-state district. Across all 47 projects, FHLBank Chicago said the goal is to expand access to affordable homes and strengthen neighborhoods in Illinois and Wisconsin.

FHLBank Chicago believes the added funding will help developers and community partners move projects forward despite rising construction costs and financing challenges, with the 47 awards targeting 1,786 homes across the two states.