The new COVID-19 Housing Assistance Program will offer 2,000 grants of $1,000 each.
Chicago residents have to apply and there is certain criteria to meet to determine eligibility.
Applicants have to provide documentation showing how they've been economically affected by the COVID-19 crisis, such as unemployment insurance claims, notices of employment status change and proof of household income at or below 60% of the area median income prior to job loss.
"Due to the unprecedented impact the COVID-19 crisis, we have a responsibility as a city to support of our residents and families during their urgent time of need," said Mayor Lightfoot. "This program represents a critical resource not only to our communities but our entire city as we navigate this evolving challenge and ensure every Chicagoan remains safe, healthy and secure."
The city is accepting applications through April 1. Grants will likely be awarded between early and mid-April, according to the mayor's office. They can be distributed to awardees' banks, as well as PayPal or CashApp accounts.
Part of the funding will be awarded by a lottery system, while nonprofits will also distribute funds using their neighborhood networks, Lightfoot's office said.
Residents who would like to apply can do so online through the DOH Online Intake Portal at www.chicago.gov/coronavirus.
The measure comes as Cook County is in the national spotlight for its rising COVID-19 cases.
While health experts say the majority of people who get the disease will recover, leaders are still pleading with the public to stay home as the virus continues to spread quickly in Illinois.
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Although Chicago is increasingly shutting down, the White House Coronavirus Task Force pointed out a sobering revelation.
"We are concerned about certain counties that look like they're having a rapid increase. Um, we can look at Wayne County in Michigan and you look at Cook County in Chicago," said Dr. Deborah Birx.
Mayor Lori Lightfoot is clearly concerned as well, following through on her threat to crack down on social distancing.
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On Thursday, the mayor officially closed city beaches, Lakefront Trail and parks, the 606 Trail, and the Riverwalk.
Governor JB Pritzker also implored residents to stay home after groups were spotted gathering outdoors.
"If you're doing these things, you're spitting in the face of the doctors and nurses and first responders who are risking everything so that you can survive," Pritzker said. "We are quite literally in the middle of a battle to save your life."
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There are now a total of 3,026 confirmed coronavirus cases in Illinois, including 34 deaths, as of Friday.
The virus has spread to 40 Illinois counties, with Bureau, Henry and Iroquois counties now reporting cases.
"It has infected infants. It has killed people in their 20s and 30s and 40s," Pritzker said. "It has forced doctors around the world to make terrible decisions about who will live and who will die."