Waco PEARLS Program
Across the country, the foreclosure crisis has created a very visible scar: vacant, abandoned houses that take a toll on surrounding neighborhoods. In Waco, Texas, things are no different, but NeighborWorks® Waco (NWW) has implemented an innovative solution.
Through their PEARLS program, NeighborWorks Waco purchases foreclosed or distressed properties, rehabilitates them and offers them for rent with an opportunity for the tenant to purchase the home. “PEARLS” stands for “Purchase Efficient Affordable homes, Rehab, Lease, Sell". Community Housing Capital (CHC) provided a $1 million five-year loan in support of this new program.
“Whether they’re REO or estate-owned properties, we go in and pick up a house that was distressed – probably the worst house on the street – and convert it to a high-quality rental property,” NWW Chief Financial Officer Karen Saucedo explained. “The organization works closely with tenants, forming ongoing relationships with many.”
The city also has a problem with slumlords who provide substandard housing, according to Saucedo. “People have to settle for that unless they can afford $1,400 or $1,500 a month,” she said. “They have to scratch and fight for quality affordable rental housing.”
So far the organization has acquired and renovated more than 85 homes through the PEARLS program since 2009. Tenants are encouraged to take NWW’s homeownership education classes, and many go on to purchase homes they are renting or others when they are ready. PEARLS is working well as a stabilization strategy.
“The PEARLS program is providing working people with a stable place to raise their families, while preparing them for the opportunity of successful homeownership and stabilizing communities at the same time,” explains Roy Nash, President and CEO, NeighborWorks Waco. The program is so successful that NWW has been asked to share information on the PEARLS program and anti-poverty strategies for youth and families in other areas of the country so that the success can be replicated on an even broader basis, having a ripple effect.
“In an ever-changing financial environment, CHC has remained steady and constant. Even though they are a national lender, they are like the lender next door," said Roy Nash, President and Chief Executive Officer, NeighborWorks Waco. “They are responsive and friendly and really want to work with us to make our project happen and be successful. CHC is the best lending organization that we have worked with."