Foreclosed Houses are Serving New Purposes

Foreclosed houses are serving new purposes and getting leased out to future buyers. Neighbor Works Waco began to purchase foreclosed properties with the intention of leasing these out to potential buyers in 2008. The operation came to be known as PEARLS – Purchase Efficient Affordable home; Rehab, Lease and Sell. The term also described the properties.

Roy Nash the CEO of a non-profit entity said “All the homes are real gems.”

One house standing on Santa Fe Drive in Woodway had been purchased under this PEARL programme. It first buys the units and then rents them out to those who aim to own it. NeighborWorks has so far purchased 20 vacant foreclosed houses in greater Waco during the past 12 months. These have been repaired and leased to those whom Nash says are “not quite ready for homeownership.” The next step of NeighborWorks is to discuss with the renters. Many of them have housing vouchers. They require to be prepared for the final stage of buying the house.

Some of the units are in a derelict condition. In one the former occupants had torn apart the air-conditioning system at the time of going. Redoing the houses has led to the borrowing of more funds and engaging construction workers. NeighborWorks does not have previous experience on such extensive works. Nash opined that it led to NeighborWorks being stretched too much.

But the efforts have been rewarding. The houses soon got occupants and right now 20 PEARL homes are either being lived in or preparations are afoot to accommodate new entries.

The abandoned foreclosed units are pushing down the prices of the adjacent houses that are not in foreclosure. Moreover it is inviting crime and arson making the entire community unsafe. However thanks to the efforts of NeighborWorks many are being able to move into homes they have bought for the first time.

According to Foreclosure Listing Service about 127 foreclosed houses have been listed in McLennan County. Generally NeighborWorks selects one out of ten houses. Each one has to undergo inspection by their construction department so as to be sure that there are no serious flaws. The target is the “top quality homes” said Nash.

Nash further said that in Waco there is a good demand for rented units. The home ownership rate here is 43% according to Real Estate Center of Texas A&M University. The national ownership rate is 67%.

To prepare the tenants to ultimately own the houses they reside in as tenants, NeighborWorks hold classes covering various related topics.