CHICAGO — The Federal Home Loan Bank of Chicago (FHLBank Chicago) announced on Tuesday, November 10, that it has awarded $62 million in grants through its 2026 Affordable Housing Program (AHP) General Fund round, money that will help finance 47 affordable housing projects across Illinois and Wisconsin and enable the acquisition, rehabilitation and new construction of 1,786 affordable housing units.
Source: Business Wire / FHLBank Chicago
The total includes an additional $10 million approved by FHLBank Chicago's Board of Directors on top of the regular round, a deliberate increase the bank said was made to help more projects move forward at a time when rising development costs and a limited housing supply are stalling affordable construction across the two states.
"Affordable housing remains a pressing need across Illinois and Wisconsin, as rising development costs and limited housing supply continue to challenge communities," said Michael Ericson, President and CEO of FHLBank Chicago. "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."
How the money flows
AHP General Fund applications are submitted every year by housing development organizations, government bodies, public housing authorities and tribally designated organizations, but they must come through FHLBank Chicago member institutions — banks, credit unions, insurance companies and community development financial institutions. The grants are designed to close financing gaps that would otherwise stop an affordable project before construction begins.
24 new homes on vacant Chicago lots
One of this year's grants went to Reclaiming Chicago NFP for the construction of 24 affordable single-family homes on vacant, city-owned lots across four Chicago neighbourhoods: Back of the Yards, Roseland, North Lawndale and Washington Park. The project is sponsored by FHLBank Chicago member First Eagle Bank and is an initiative of United Power for Action and Justice, which brings together civic and religious organizations, including five nonprofit development partners, to expand homeownership opportunities.
"FHLBank Chicago's Affordable Housing Program plays an important role in closing financing gaps and making affordable housing projects possible," said Faruk Daudbasic, Senior Vice President of Commercial Lending and Community Development at First Eagle Bank. "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 grant, First Eagle Bank has also provided a $1 million interest-free loan to advance the initiative.
A Milwaukee hospital becomes senior housing
Another 2026 grant went to the Milwaukee Development Corporation in Wisconsin to transform a historic former hospital into 124 affordable apartments for adults aged 55 and older. Sponsored by Associated Bank, N.A., the project will include 25 supportive housing units for residents with disabilities, with on-site services provided by Jewish Family Services.
"This development will bring much-needed affordable housing to Milwaukee while preserving an important part of the neighbourhood's history," said Pat O'Brien, President of the Milwaukee Development Corporation. "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."
Background: a program running since 1989
The Affordable Housing Program is not new money in a new wrapper. Since the program's inception in 1989 through the end of 2025, FHLBank Chicago has allocated more than $630 million in AHP General Fund grants, helping provide housing for more than 85,000 households. FHLBank Chicago itself is a regional bank in the Federal Home Loan Bank System — government-sponsored enterprises created by Congress to ensure access to low-cost funding for member financial institutions. It is a self-capitalizing cooperative owned by its Illinois and Wisconsin members.
Housing cost is the single biggest monthly pressure on working families in the Chicago area, including the large Punjabi and South Asian communities in the suburbs and along corridors such as Devon Avenue. Projects that turn vacant city lots into owned homes, rather than only rentals, are watched closely because they offer a route onto the property ladder for first-time buyers.
What happens next
The 47 funded projects now move into their individual financing and construction timelines with their sponsoring member banks. The full list of 2026 AHP General Fund projects and descriptions has been published by FHLBank Chicago. The next annual AHP round will again be channelled through member institutions, and community organizations in Illinois and Wisconsin that missed this round can prepare applications through their local member bank or credit union.