The MacArthur Foundation will provide more than $15 million through loan programs that could leverage additional private capital of up to $50 million.
The program targets small geographic areas that are experiencing higher than normal foreclosures. The city will start with nine neighborhoods, and then move on to the rest of the city.
"When that property forecloses, it affects the houses on this block, so it needs a neighborhood approach. And it needs a comprehensive integrated approach rather than home-by-home because the system is too big and complicated for that alone," Mayor Emanuel said.
There were more than 10,000 foreclosures in Chicago last year.