USDA offers Free Money but puts taxpayers at risk
The Austin American-Statesman didn't publish our 1/4/2010 letter to the editor (below) about this D.R. Horton
advertisement -- not because it exceeds 150 words but because it attacks a revenue source:
homebuilder ads.
D.R. Horton advertisement:
HOT Letter to the
Editor:
USDA offers Free Money but puts taxpayers at
risk
“Great values found in Hutto at Riverwalk by D.R. Horton” was an advertising
supplement designed to look like a Statesman article. It billed the community as Hutto’s best
home value, but that claim could do a disservice to both buyers and the taxpayers who fund and guarantee the
USDA loans.
The article (advertisement) promoted an $8,000 homebuyer tax
credit (free money) and a USDA Home Loan Program (zero-down) that’s aimed at
low and very-low income families needing affordable housing. It was designed to convince them to buy homes built on
some of the most expansive soil in the country - Branyon clay.
The Riverwalk soil has high shrink-swell characteristics that make it unsuitable for building. The USDA knows that
and describes Hutto soil as great for growing cotton but horrible for home building. So why do they make home loans
there? And why do builders such as D.R. Horton build there? The land may be cheap, but the risks are
great, according to USDA.
The USDA Web Soil Survey (http://websoilsurvey.nrcs.usda.gov/app/HomePage.htm - SEE IMAGES BELOW) describes
Riverwalk’s clay soil as “very limited” for building dwellings on concrete slab foundations, with
limitations that “generally cannot be overcome without major soil reclamation, special design, or expensive
installation procedures.” It goes on to say, “Poor performance (i.e. cracked slabs) and high
maintenance (expensive foundation repairs) can be expected.” This seems to make buying a Riverwalk
home a risky proposition unless the company does due dilligence with proper foundation engineering and
installation. We've asked them to explain their foundation design process to us and encourage buyers
to do the same and request the foundation plan with engineering stamp at closing.
For more on the topic of expansive soil, see http://homeownersoftexas.org/Soil_Issues.pdf.
UPDATES:
1/6/10 – We spoke with D.R. Horton sales Pat Fulford to ask what measures
the builder takes to ensure sound foundations on the expansive soil in Riverwalk. We did this because we know
such measures can be expensive and often ignored on starter homes. She told us they drill core samples on every
third lot and then individually engineer the slabs for that lot and the plan. She also directed us to their
Land Development department for confirmation and more detail.
1/15/10 – After first talking with Stacy Land on 1/11, she called back today
with an official statement about foundation engineering. Stacy represents D. R. Horton’s Land Development and
first checked with her corporate office and legal department before saying the builder “drills core
samples for EVERY lot”, not just every third lot as Ms. Fulford said earlier. She also reiterated
that “foundations are individually engineered” to the needs of lots and floor
plans.
We’re happy to share this good news. It shows the importance of builder
education and how builders can respond positively to market demand and pressure. Once criticized in
complaint sites for building shoddy homes with inadequate foundations, the builder seems to have learned
from past mistakes. To ensure that others follow suit with the same sort of due diligence, HOT worked
with the Texas Society of Professional Engineers to pass a bill that now requires engineered foundations
for all homes built on expansive soil.
EVALUATING BUILDERS:
Our HOT LINKS section has resources for checking out a builder, but
you can start by getting prepared yourself and asking tough questions of the builder. You can also do a
simple Internet query to see what others say. Here’s what we found when searching Google for D. R. Horton and
“reviews” or “complaints”. In fairness, we should note that people are more likely to complain about problems
than complement when satisfied, and large volume builders will naturally have more complaints against them
because of their sheer scale of operations. Also, sites that offer only complaints and no compliments provide
a one-side view, but reading complaints can uncover patterns and give buyers a sense of a company’s business
practices and reputation.
SOME INTERESTING RESULTS FROM OUR QUERY
INCLUDE:
SCREEN SHOTS FROM USDA
WEB SOIL SURVEY:
The interactive Web Soil Survey is a
FREE resource of the US Department of Agriculture. It can be used to examine the soil properties of land and
the suitability for specific purposes, e.g. farming or building. For convenience, we captured the three screen shots below to highlight our findings.
USDA Web Soil Survey - We queried Williamson County and then zoomed in on D R
Horton's Riverwalk subdivision
The Web Soil Survey shows that D R Horton's Riverwalk subdivision sits on the
very expansive Branyon clay (BrA) soil.
The Web Soil Survey says Branyon clay in D R Horton's Riverwalk
subdivision is "Very limited" for building dwellings on concrete slabs.
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