The Participial phrase is destroyed by fire, and the word modified is house. This is an example of participial phrase servings as an adjective modifying the word house. This could also be reworded into. Destroyed by fire, the neighbors found their house.
No; a prepositional phrase begins with (or includes) a preposition such as "of", "through", and "around".This sentence does not have a preposition within it, so, no, it is does not have a prepositional phrase.
