Skip to main content

Multifamily Rehabilitation Loan Program

Evanston, Cook County


Multifamily rental rehabilitation loans address the need for available low-cost financing to owners primarily for the upkeep and maintenance of the City’s affordable rental housing stock. The City has determined that assisting owners in correcting code violations can eliminate safety hazards, which is a priority for providing decent, safe and sanitary rental housing to low-and-moderate income tenants.

An MPC Finance case study


The goal of Evanston’s multifamily rehab loan program is to encourage the revitalization, preservation and stabilization of Evanston neighborhoods, and conserve and rehabilitate housing for low-income households. The loans address the need for low-cost financing for the upkeep and maintenance of multifamily rental property so that apartments can remain safe and affordable.

The program was developed in 1974, when the federal Community Development Block Grant (CDBG) program was created. The City held a series of public hearings to address how to allocate CDBG money, resulting in the creation of this program.

How it works

Investment properties with two or more apartments and 51 percent of tenant household incomes at or below 80 percent of area median income (AMI), which was $57,900 for a family of four in 2014, are eligible to apply for multifamily rehabilitation loans. The interest rate on these loans is one-half of the 30-year Treasury Bond, adjusted monthly, and amortized over 25 years. The loan amount is capped at $20,000 per rehabbed apartment.

A city rehabilitation specialist works closely with an owner to develop a scope of work, solicit bids, prepare contracts and oversee technical performance. Prior to the city disbursing funds to the contractor for completed work, the rehabilitation specialist and the owner sign documents accepting the work. Additionally, the contractor signs a partial waiver of lien commensurate with the value of the completed work. Projects that qualify for assistance include kitchen/bathroom remodeling; window replacement; roof replacement; porch replacement; foundation repairs; energy conservation; and those addressing code and environmental health-related violations. CDBG funds cannot be used to expand habitable living space or make unnecessary improvements. All of the materials and finishes used are construction grade.

As a result of decreased demand in the program, no loans have been closed in more than five years. The City is evaluating the program structure, which may result in a redesign of the program.


Department of Community Development, City of Evanston

  • Goal

    Preserve Evanston’s affordable multifamily rental housing stock.

  • Target

    Multifamily rental properties with more than half of tenants earning below 80 percent AMI ($57,900 for a family of four in 2014).

  • Financing

    The City allocated Community Development Block Grant (CDBG) entitlement funds to the revolving loan fund; the program cap is $20,000 per unit improved. Other funding is provided through the Cook County Lead Poisoning Prevention Program and Federal Weatherization grants when available.

  • Success

    No loans have been completed in the last six years under the multifamily program. However, units have been completed using alternative funding sources mentioned above.

  • Lessons learned

    Due to a variety of factors, including low interest rates and the added project costs from Davis-Bacon prevailing wages and other federal requirements, landlords have been unwilling to taking advantage of the program. This has resulted in no loans being closed in over five years. The City is evaluating the program structure, which may result in a redesign of the program.