The Edina Housing and Redevelopment Authority on Aug. 28 approved a $1 million grant from the Southdale pooled tax‑increment financing (TIF) fund to create a HEROES down‑payment assistance program aimed at workers who serve Edina residents.

Manager Stephanie Hawkinson, HRA staff, described the program as a deferred second mortgage to reduce the amount buyers must borrow from a first‑mortgage lender. “This program is designed to help people who buy homes in the city closer to their work by providing a deferred down payment second mortgage to reduce the amount needed to borrow from the first mortgage lender,” Hawkinson said. The Edina Housing Foundation will own the notes and implement the program, using underwriting and servicing processes similar to the city’s existing Come Home to Edina program.

Key parameters discussed at the meeting:
- Grant source and amount: $1,000,000 from the Southdale pooled TIF fund; Hawkinson said roughly $6 million remains in the pooled fund for eligible affordable‑housing purposes if the HRA approves the HEROES award.
- Loan terms and limits: Maximum HEROES second mortgage up to $100,000 or no more than 25% of the home value or 25% of allowable PITI (principal, interest, taxes and insurance) per program guidance; principal is deferred until sale or loan term end. The city will allow either shared‑appreciation or interest‑only deferred notes; staff said roughly 95% of similar borrowers historically choose shared‑appreciation notes.
- Eligibility: Workers who serve Edina residents—healthcare professionals, teachers and educators, daycare workers, school district staff (custodians, food service), municipal employees, firefighters, EMS and law enforcement—must show employment in the city at the time of loan closing. Income limits derive from the funding source: generally up to 115% of area median income (AMI) for households of three or more and 100% of AMI for one‑ and two‑person households, as required by the funding rules Hawkinson cited.
- Maximum home value: Hawkinson proposed a $600,000 cap on eligible home purchase price; she noted that this figure was raised in HRA workshops and that supply in the local market may limit single‑family opportunities.

Hawkinson said program staff estimate the $1 million could support roughly 8–10 closings in a year under typical market conditions; she added that marketing and outreach would target Edina employees and that the Edina Housing Foundation and the city would include reporting requirements in the grant agreement. Commissioner Egnor moved the grant; Commissioner Pierce seconded. The motion passed by voice vote.

Why it matters: The HEROES program is intended to help workers who provide essential services locate closer to their workplace, reduce commute burdens and support local workforce stability. The program uses TIF funds whose legislative authority permits affordable‑housing uses in the Southdale pooled fund, staff said.

Reporting and next steps: Hawkinson said staff will work with the city attorney to draft a grant agreement and modify existing Come Home to Edina loan documents to accommodate HEROES parameters. Commissioners asked that reporting requirements be included in the grant agreement so the HRA can monitor take‑up, leverage and borrower outcomes.

Commissioners debated market supply and eligibility scope. Several raised concerns about whether a $600,000 maximum home price would yield enough available properties and whether certain high‑income categories (for example, physicians) belong in a targeted workforce program; Hawkinson said the income limits are set by the funding rules and that the program’s first year should be treated as a learning opportunity.