In 2016, the City of Chicago revised the Zoning Code to leverage funds generated by new development in and around the Loop to catalyze investment in Chicago’s West, Southwest and South Sides. The Neighborhood Opportunity Fund uses these funds to support commercial corridors in Chicago’s underserved neighborhoods. Business and property owners may apply for grant funding to pay for the construction or rehabilitation of real estate and projects that support new or expanding businesses or cultural assets.
The Neighborhood Opportunity Fund (NOF) awards grants to projects that have a catalytic impact on the neighborhood and lead to the construction or rehabilitation of new and existing, publicly accessible, commercial spaces (e.g. grocery stores, retail establishments, or restaurants) or cultural establishments. NOF does not award grants for the construction or rehabilitation of residential uses, manufacturing uses, industrial uses, or places of worship that do not identify commercial as the primary use of a project.
Upon receiving a conditional award letter from the Department of Planning and Development, approved applicants may begin work on their projects.
Grant funds CAN be used to reimburse the following costs associated with the construction or rehabilitation of buildings:
Grant funds CANNOT be used to reimburse the following costs associated with the construction or rehabilitation of buildings:
Applicants cannot be reimbursed for any work completed on their project prior to receiving a conditional award letter, nor can grants be retroactively awarded for projects completed outside of the formal grant process.
NOF offers two types of grants: Small Projects (assistance of $250,000 or less), and Large Projects (assistance of $250,001 - $2.5M). The NOF assistance available to your project depends on the project location and the amount of financial assistance being requested.
Small Projects (grants up to $250,000)
NOF Small Projects must be located in an Eligible Commercial Corridor, which are public streets that are generally zoned for retail or commercial uses. Projects are required in these locations so that they can be concentrated to create a larger, collective impact. Projects may also be located within a Priority Investment Corridor, which is similar to an Eligible Commercial Corridor, but has a greater amount of retail or commercial activity. Although not required, projects located within Primary Investment Corridors, will receive extra weight during the application review process.
Please refer to the Project Eligibility map below to determine if your project is eligible for the grant.
Large Projects (grants exceeding $250,000, up to $2.5M)
NOF Large Projects do not have to be located in an Eligible Commercial Corridor, but must be located within the Qualified Investment Area (QIA). Large Projects must receive City Council approval and a Redevelopment Agreement that governs the terms of the grant. Large Projects are subject to the City’s construction compliance requirements, which include MBE/WBE, Local Hiring and Prevailing Wage (as established by the Illinois Department of Labor). We encourage applicants to contact us with questions about NOF Large Projects in advance of submitting an application.
Projects located within an Eligible Commercial Corridor are eligible for both the Small and Large Project grants; however, projects that are located outside of an Eligible Commercial Corridor and requesting more than $250,000 are only eligible for Large Project grants.
NOF is a funding partnership, which means that the City provides a grant of funds for a percentage of the total project costs, and the applicant provides the remaining funds to reach 100% of total project costs. Once the project type is identified, the base amount of funding can be determined.
New Construction (50% for Small Grants and 30% for Large Grants)
New construction projects are eligible to receive grants of up to 50% of the total project cost. If awarded in full, the applicant would assume the remaining 50% of total project cost.
Rehabilitation of Existing Buildings (50% for both Small and Large Grants)
Rehabilitation projects are eligible to receive grants of up to 50% of the total project cost. If awarded in full, the applicant would assume the remaining 50% of total project cost.
NOF aims to develop sustainable neighborhood growth by building community-based wealth. Supporting locally-based business and property owners will ensure that investments in our neighborhoods remain in those neighborhoods, helping to catalyze new businesses and new employment opportunities. The Build Community Wealth Bonuses provide eligible projects with additional funds, to advance this goal. If eligible, projects may receive either or both Build Community Wealth Bonuses. The total Build Community Wealth Bonus for NOF Large Grants may not exceed $250,000, regardless of receiving one or both bonuses.
Build Community Wealth Bonus - Local Residency (25%)
If an awardee maintains his or her primary residency in an NOF eligible area, their project may qualify for the Local Residency Bonus. This bonus provides up to 25% of total eligible project costs, which may be applied towards the construction budget.
Build Community Wealth Bonus - Local Hiring (25%)
If an awardee hires new employees who maintain their primary residence in an NOF eligible area, their project may qualify for the Local Hiring Bonus. This bonus provides up to 25% of total eligible project costs as a reimbursement for wage expenses or training costs, if the awardee hires at least two, new full-time employees, or two Full-Time Equivalent (FTE). The two FTE requirement may be fulfilled with multiple employees working at least 20 hours per week (at least 60 hours across all part-time employees). Local Hiring bonus funds are reimbursed after a qualifying project is completed.
Please refer to the Build Community Wealth Eligibility map below to determine if your project is eligible for the bonuses.
The NOF is an available source of funding for projects located in specific areas of the South, West and Southwest sides. The exact geographies were selected by the Department of Planning and Development using an analysis of Census tract data from the last four decades. More information is available on the City's website.
Applications are prioritized based on the following four key factors:
The City’s Department of Planning and Development reviews all applications and submits them to an Advisory Committee, which is comprised of community leaders who represent a cross-section of neighborhoods. The committee reviews DPD’s recommendations for final selection and provides approval or feedback.
Advisory Committee Members:
Projects receiving more than $250,000 in assistance will go through a Redevelopment Agreement process with the City’s Department of Planning and Development, which requires approval by Chicago's City Council.
How do I know if my property is eligible for the Neighborhood Opportunity Fund program?
Applicants requesting grants up to $250,000 must be located on an Eligible Commercial Corridor or Priority Investment Corridor. Applicants requesting grants greater than $250,000 may be located outside of an Eligible Commercial Corridor or Priority Investment Corridor, but those projects must be approved by City Council.
You can use the map on the Apply page to determine if your property is located in one of these eligible areas.
What are Eligible Commercial Corridors and Priority Investment Corridors?
Eligible Commercial Corridors are public streets that generally allow for retail or commercial uses based on the underlying zoning.
Priority Investment Corridors have the same characteristics as an Eligible Commercial Corridor, but also have a greater amount of retail or commercial activity. This activity is based on higher concentration of active business licenses, high rates of vehicular traffic, high ridership bus routes, or is otherwise a significant existing or established commercial corridor.
Is my mixed-use property eligible for Neighborhood Opportunity Fund assistance?
Yes, but only for the commercial spaces. Any build-out or improvement of residential spaces is considered an ineligible project cost.
What if my property has building code violations?
You are still eligible to apply for a grant, but any repairs or improvements that are ordered by the Circuit Court to remedy documented citations of the City of Chicago’s Building Code are not eligible for Neighborhood Opportunity Fund assistance. Additionally, any funds used to remedy the Building Code violations may not be applied towards the total eligible project costs.
How long will the selection process take once the application window closes?
The selection process will take approximately two to three months from the application deadline.
How does the Build Community Wealth Bonus work?
Jorge submits an application for an NOF Small Project grant with total project costs of $230,000. He is proposing to rehabilitate his existing restaurant, which is located in an Eligible Commercial Corridor. He does not live in the area, but he will be hiring two new employees who live in the Corridor. He qualifies for the Small Project grant with the Local Hiring Bonus, which he will receive after his project is completed. His breakdown of costs is as follows:
Total Project Costs: $230,000 (Small Project)
Rehabilitation (50%) + Local Hiring Bonus (25%) = 75% NOF Grant
Grant as Percentage of Total Project Costs: $172,500
City responsibility (75%): $172,500
Applicant responsibility (25%): $57,500
Lucinda submits an application for an NOF Small Project grant with total project costs of $150,000. She is proposing to construct a new building for her new art framing business in an Eligible Commercial Corridor. She lives in the area, and she will be hiring employees who live in the corridor. She qualifies for the Small Project grant, the Local Residency Bonus and the Local Hiring Bonus. Her breakdown of costs is as follows:
Total Project Costs: $150,000
New Construction (30%) + Local Residency Bonus (25%) + Local Hiring Bonus (25%) = 80% NOF Grant
Grant as Percentage of Total Project Costs: $120,000
City responsibility (80%): $120,000
Applicant responsibility (20%): $30,000
Reggie and Delores submit an application for an NOF Small Project grant with total project costs of $345,000. They are proposing to rehabilitate an existing building in an Eligible Commercial Corridor for their growing bakery. They both live in the area, but they will not be hiring employees who live in the corridor. They qualify for the Small Project grant and the Local Residency Bonus. Their breakdown of costs is as follows:
Total Project Costs: $345,000
Rehabilitation (50%) + Local Residency Bonus (25%) = 75% Total NOF grant
Grant as Percentage of Total Project Costs: $258,750
City responsibility (72%): $250,000*
Applicant responsibility (28%): $95,000
*Although the applicant is eligible for up to 75% of Total Project costs, small projects are capped at $250,000. The applicant assumes responsibility of the remaining 28% in this example.