The most important challenges facing humans are global warming and lack to freshwater. Large-scale desalination has always been of interest, but producing freshwater using heat recovery in small-scale combined heat and power systems has not yet been sufficiently discussed. The small scale desalination is highly required, because it can use small scale recoverable waste heat from the micro/small scale power generators. Decentralized small scale desalination systems are more feasible and reliable than centralized big desalination systems for the time of crises such earthquake, war and terrorist attacks, and water loss reduction due to water transmission pipelines. In this research, a cycle is designed for simultaneous production of power, heat and freshwater in small scale for residential buildings. The power generator is a micro gas turbine by Capstone Company. The cycle feasibility is studied by energy, exergy, economic, and environmental criteria, and the design of the desalination is presented in details. The sizing of the system’s components is done according to the following water demand strategy. Evaluations show that the proposed system is feasible from thermodynamics, economic, and environmental viewpoints. The simulation is done by code generation in MATLAB software. The footprint area to install the small scale multi-stage flash desalination is 0.25 m2. The net present value is 25 million united states dollar with payback period of less than 2 years. It also reduces carbon dioxide about 39 tons/year.