CHICAGO—Gentrification in stronger neighborhoods is frequently perceived as posing a threat to the region's inventory of affordable housing, but in weaker neighborhoods the true threats come from deterioration and disinvestment. And to combat the latter threats, the Community Investment Corp. has just finished raising $200 million to finance the acquisition and rehab of affordable rental housing in the Chicago area over the next five years. CIC officials say this funding will help preserve 7,500 affordable rental apartments that will house about 18,000 people.

The multifamily rehab lender raised the funds from 37 Chicago-area banks. The effort was led by David Dykstra, senior executive vice president and chief operating officer of Wintrust Financial Corp., and included the efforts of a campaign committee that consists of CIC board members and individuals at financial institutions that invest in CIC. Lead investors in the fund include The Northern Trust Co., BMO Harris Bank, PNC Bank, Fifth Third Bank, Wintrust Financial Corp., The Private Bank, Associated Bank, Citi Community Capital, MB Financial Bank and First Midwest Bank.

The new loan pool will give CIC's multifamily loan program reliable access to capital. The program primarily targets privately owned rental housing that constitutes the vast majority of affordable rental housing in Chicago. CIC was founded in 1984, and has provided more than $1.2 billion for 55,000 units of affordable housing in low-to-moderate income communities. A typical loan for CIC is about $500,000 for a 20-unit building.