NEW YORK -(Dow Jones)- Pulte Homes Inc. (PHM) offered to purchase 27 San Antonio homes damaged by a January retaining-wall collapse that created crevices up to 15 feet deep and eight feet wide.

The builder will also erect a new wall, a six-month project estimated between $4 million and $5 million. Work will begin following city approvals and permits.

Given that time commitment, Pulte's Centex division, which built the homes in a development known as Rivermist, offered to buy back the units deemed uninhabitable.

Pulte, the nation's largest builder, said it will also cover moving costs, costs of home improvements and reasonable legal fees. For owners who want to keep their homes, the builder will provide or reimburse for alternative housing until the new wall is finished and certified.

Spokeswoman Valerie Dolenga couldn't provide a total cost Thursday. The community's average selling price is $200,000, though some of the affected homes commanded more because they are bigger and offer city views. Two of the affected addresses have already closed for an undisclosed sales price.

In late January, about 90 houses were evacuated following a "significant soil movement" underneath some of the homes. Most owners returned home quickly, but 27 units were deemed unsafe. Those residents are in hotels or short-term housing paid for by Pulte, Dolenga said.

San Antonio officials later said the retaining wall went up without a permit. A representative for Pulte, which acquired Centex last year, said in January that "it was our understanding that we were in full compliance with the city requirements." Pulte hired an engineering firm to test and analyze the soil.

The builder hasn't addressed other residents' complaints of reduced property values. Since the collapse, six homes have sold at prices similar to before the slope's failure, Dolenga said, a sign the community is holding value.

- By Dawn Wotapka, Dow Jones Newswires; 212-416-2193; dawn.wotapka@dowjones.com

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