Pssst. Edina has a big secret.
But those in the know rave about it; and they want to let you in on it.
“It” is Come Home 2 Edina, a second mortgage program from the East Edina Housing Foundation that provides loans of up to $60,000 to qualifying, moderate-income families and individuals wanting to purchase a place in the city.
“Some people say this is the best-kept secret, and we don’t want it to be a secret,” says Joyce Repya, a city planner and the program’s point person.
The $2.3 million program has been a bit of a clandestine club since its inception more than two decades ago, and that status has been an enigma even to its leaders.
“It’s been a mystery to me and to other board members that this is such a good program, and that the funds haven’t been exhausted almost immediately,” says Jack Rice, a member of the foundation’s board of directors.
Its recipients had to keep an eye open and an ear to the ground in order to hear about the program. Penelope Watson skimmed its details in a city circular; Charlie Aul heard about it at work; Janine Krieter was clued in by her realtor.
BEGINNINGS AND REASONING
The East Edina Housing Foundation was a non-profit established in 1985 by the Edina Housing and Redevelopment Authority to assist people with condominium purchases in the Edinborough complex.
Loans ranging from $11,000 to $18,000 were provided to prospective homeowners using tax increment financing (TIF) or property tax revenue from increases in assessed values.
Mary Kay McNee was one of the first to partake in the program when she bought a place in Edinborough in 1987. Her loan of $11,000 had a 5 percent interest rate to go with her first mortgage rate of 11 percent.
“Which was, comparatively speaking, free,” said McNee, who added that she was able to pay it off within a few years.
McNee and about 300 others took advantage of the program in Edinborough and Centennial Lakes. And now, with only 25 loans outstanding, the program proved to be a success. With repayments made, the Come Home 2 Edina program redistributed the money and expanded to encompass most of Edina in 2006.
“It’s to encourage home ownership in Edina,” said Rice, who runs the Rice Company, a real estate services business. “Edina sometimes has a reputation of being overpriced and unattainable for people. We would like to have more of our teachers and workforce people living in Edina—nurses, firemen, police officers.”
DETAILS AND EASE
Come Home 2 Edina might have been a secret, but its rules weren’t equally esoteric.
To qualify, a family of up to four must have an annual income of less than $84,000 and an assets total beneath $50,000. A family of six cannot earn more than $97,500, and the assets of seniors cannot exceed $250,000, including retirement accounts.
The home’s price cannot exceed $325,000, and the borrower must pay $1,000 toward a down payment or closing costs.
“The beauty of this program is the borrower goes to their mortgage lender and he evaluates their ability to borrow for their first mortgage,” Repya says. “What happens with the foundation funds is they go shopping for more than what they qualify for with a first mortgage.
"That can make a difference for a young family that might be only able to afford a condominium,” she adds. “Now, they are able to get into a single-family home. It allows them to stretch a little.”
Repayment options are two-fold: monthly interest-only payments with the principle due upon sale or to defer all payments until sale, refinance or maturity of the first mortgage.
Charlie and Dava Aul graduated from Edina High School in the 1990s, but lived in Atlanta and Milwaukee for most of the 2000s. Upon return in 2009, they rented in Southwest Minneapolis and tried to find a place in Edina to raise their two kids.
The Auls, both agents at Edina Realty, heard about the program through work, but remained skeptical that if they qualified, they would be approved.
“I think by nature these things aren’t made so that everybody can do it,” says Charlie Aul. “You just never know what is going to happen until you go through the entire underwriting process. It’s similar to getting a first mortgage. You have to meet the parameters and the requirements. You just never know that you are going to do it. Even though you might qualify on paper, you never know until someone in charge of the program takes a look.”
The Auls’ trepidation increased because they needed Come Home 2 Edina in order to buy.
“When we found out that we were approved and everything looked good, it was an answer to our prayers and a dream come true,” Charlie Aul says. “Overall, I don’t think our underwriting process was any longer or shorter than someone doing a traditional mortgage without Come Home 2 Edina. It was pretty nice.”
BREADTH AND SUCCESS
Come Home to Edina has issued 45 loans in the last four years, with 29 for single-family homes, 13 for condos and three for townhouses.
“It really does feel good, especially in this market where housing is a struggle for everybody,” Repya says. “It’s great to help people finally buy a house that didn’t think they would be able to do so.”
Mary Kay McNee, one of the first recipients of the program at Edinborough, is now a senior loan officer at Bell Mortgage. She has used it to help about 10 buyers and says it’s one-of-a-kind.
“There is no other program out there like this because this is what I do for a living,” McNee said. “This is a wonderful program. I talk it up everywhere I go. The people that really need to know about it are the real estate agents and the loan officers who lend in Edina.”
McNee, also a member of the foundation, says they’ve worked to keep it simple and increase awareness.
“We’ve done everything that we can do to make this really easy,” McNee said. “Joyce has gone out to real estate companies and met with loan officers. Met with real estate agents to talk about it. This program has a tremendous word-of-mouth appeal.”
Janine Krieter is an example of who the program wishes to bring into Edina, while Penelope Watson is a testament to its ease of use.
Krieter grew up in Edina and has owned Flowers of Edina for 20 years, but for those two decades she lived a block away in Minnetonka.
“I was always trying to get back in, but the home prices were beyond my means,” Krieter says. “I think that it’s important for an Edina business owner to be able to say they are an Edina resident.”
Her other aim was to become more active in civic service in Edina.
“I want to be able to help out the city in some way,” Krieter said. “I’m part of Edina Rotary, so I believe that service is important to a business owner. When you are a small business owner, you have to be a part of the community.”
Watson was living in Plymouth, but longed to be in Edina. The senior citizen sold her place in Plymouth, going through a “chaotic” closing. She was renting in Edina when he read about the program and went to see Repya.
"Joyce was terrific; she explained it well,” Watson says. “The paperwork that they presented me with was very clear and easy to understand. They teamed up with … US Bank and the closing had no surprises. I knew exactly what it was going to cost me. … It was completely beautifully done.”
Rice says Krieter, Watson and the Auls are not alone.
“They are all success stories,” Jack Rice says. “I don’t think we’ve had a failure in that program.”
