If the house has all major components in working order a few cosmetic items doesn't make it not livable.

Creative ApproachesIf the organization is hesitant about a sale, consider proposing creative terms:Seller Financing: The non-profit could retain an income stream from the property by financing the purchase.Partnership or Lease-Purchase Agreement: Offer to lease the property with an option to buy, giving them time to evaluate the relationship.Donation or Support: Consider including a donation or offering support for their mission as part of the deal.

We understand that not every negative item we dispute will come off.We persist until we succeed because you must have a high-level of doggedness as a real estate entrepreneur.We understand there will be sunk costs and time being wasted.

The property taxes will be on his Schedule A during the time the property was his primary residence, assuming he itemizes.

Anyone that has sold items privately would have countered any offer. 

And addressing my item #1 comment, almost always, when a "distressed" homeowner is approached, they initially are grateful to have the loan brought current, but before long they forget the circumstances they were in and you become the bad guy that stole their house.

There are a lot of options out there.Some of the most useful items BiggerPockets members have identified are features that save time so they can spend time working on their next property.

Of course you can get discounts for having certain items FULLY updated, like plumbing.  

If I donated to the aids health foundation expecting it to go to aids care or research, I would be very disappointed with this use of the money. 

Paying off the notes, working to pre-emptively make repairs to capex items before they fail or become a major issue think roof, HVAC, and foundation.