Edina's down payment assistance program ends after 40 years
EDINA, Minn. — For over four decades, the city of Edina has helped teachers, nurses, first responders, and families achieve the dream of homeownership through its down payment assistance program.
However, after years of success, the city announced the program will be suspended due to financial challenges, stemming from housing market changes.
Since 2007, the program known as "Come Home 2 Edina" has lent a total of $8.7 million, helping 183 families purchase homes in the city, said Affordable Housing Development Manager Stephanie Hawkinson.
But with the funding pool now depleted, city officials say the program is no longer sustainable.
"It's not sustainable when you are lending out significantly more money than you are taking in, and this is the first time since the program started that this has happened," Hawkinson said.
The program was designed to assist buyers by offering down payment loans, with the funds being replenished when homes purchased through the program were sold. Hawkinson said rising interest rates have led to a trend where homeowners are staying in their homes longer.
"What once was considered their starter home is now becoming their forever home," she said.
This shift is part of a broader trend, with homeowners across the U.S. staying in their properties longer. According to Redfin, the typical U.S. homeowner now spends nearly 12 years in their home, compared to just 6.5 years two decades ago. Industry experts attribute this to high interest rates, limited inventory and rising home prices, all of which have made it more challenging for buyers to find affordable homes.
In Edina, the median home price has reached $700,000. Buyers, especially first-time homeowners, are feeling the pressure, with many struggling to afford a home in such a competitive environment. But despite the challenges, local real estate agents remain optimistic about the market's future.
"The good news is that interest rates are stable right now. They've come down a little bit, so there's more inventory and more activity in the market," real estate agent Marcos Mojica Martinez said.
Martinez encourages people considering homeownership to research all available assistance programs, at the local, county, state and federal levels.
For many homeowners, the journey to finding their dream home remains a deeply emotional experience.
"I've seen people crying when they finally get the keys," Mojica Martinez said.
While Edina's down payment assistance program may be on hold for now, Hawkinson hopes it can eventually resume so more people can benefit.