Edina leaders knew decades ago that not everyone could afford to live in the well-to-do suburb. So they started a program to help people who couldn’t afford a house there.
But now it’s run out of money.
And the nonprofit that ran the program has stopped accepting new applications.
“We’re going to put a pause on this, and we hope it’s just a pause,” said Ann Swenson, chair of the board for the nonprofit East Edina Housing Foundation.
The foundation’s Come Home 2 Edina program helped 183 families buy homes over the past 18 years. But leaders say the very same factors that increased demand for down payment assistance loans also made it harder to replenish the program’s budget.
The program was seeded by the city and funds were supposed to be paid back when people sold their homes. But the housing market slowed down, prices rose and more people chose to stay in place. That means less money is flowing back into the program.
“This is the first time the paybacks have not kept up with the loans,” said Stephanie Hawkinson, Edina’s affordable housing development manager.
Housing advocates say demand for down payment assistance has increased across the state and the nation. Interest rates rose from pandemic-era lows of about 3% closer to 6%. Home prices, rents and insurance rates grew, too, prompting some people to choose to stay in their homes rather than sell.