Foreclosed properties are cheap and plentiful in some states. But would-be homeowners have often stayed away because they are afraid that the cost of unexpected repairs would turn their dream houses into nightmares. Their fears are well-founded, reports Changing Times, the Kiplinger Magazine. Many of these homes have been vacant for months or years, and they could have water damage, cracked foundations or plumbing problems.
Now the Resolution Trust Corp. (RTC) - the government body charged with disposing of properties from defunct savings institutions - is experimenting with warranties for some Texas buyers. The warranty covers homeowner costs for repairs ranging from appliances to electrical systems and includes coverage for major structural problems. Only houses that pass a home inspection are included in the program. If you sell the house before the policy expires, you can pass on the coverage to the new owner.About half of the RTC's 29,000 residential properties are in Texas, and the program is targeted toward first-time buyers with modest income who get financing from the Texas Housing Authority. Similar warranties are being discussed in other states with sizable RTC properties, including Colorado, Florida, Georgia, Louisiana and Oklahoma, says Mike Childers, senior vice-president of the Home Owners Warranty Home Protection Corp., which provides the coverage.