Dollar Home Program: Can You Actually Buy a Home for $1?

When people think of buying a home, they typically think of home listings that cost hundreds of thousands of dollars. However, the housing market is bigger than you may realize. The United States Department of Housing and Urban Development (HUD) offers different housing assistance opportunities. Their goal is to help people get affordable housing and one of their assistance opportunities is called the Dollar Home Program. However, this program may not be what it seems.

What is the Dollar Home Program?

This initiative from HUD can help local governments provide housing assistance opportunities to qualifying individuals. Your local government could have the opportunity to buy a HUD-owned home for just $1. Yes, you read that right, just one single dollar.

The Federal Housing Administration (FHA) backs home loans offered by lenders. If a borrower defaults on their loan, then the property can go through foreclosure. Once the property goes through foreclosure, it belongs to the FHA to sell. Vacant single family homes that have gone through this process can be offered through this program if they have been on the market for 6 months and meet market value guidelines.

If the home has a market value of $25,000 or less and was on the market for 6 months, then local governments may be able to purchase the property with $1. Communities can fix up the home and benefit from the savings that this program provides and give affordable housing to qualifying families.

Local governments that are interested in this program can work with local nonprofit homeownership organizations. They could also join existing local programs that resell homes to eligible individuals in the community. It’s a common misconception that families can buy the property directly. Instead, the local government would purchase the property for $1 then provide affordable housing (which is no more than 30% of an individual’s monthly income according to HUD) to qualifying recipients.

How to Find $1 HUD Homes?

It’s important to note that only local governments can buy $1 properties. However, if you are a part of a government agency that is interested in purchasing these homes then you can visit the HUDHomeStore online. You can review available properties on that platform. When searching for properties you will need to specify Dollar Homes in the search bar!

Other HUD Assistance Options

Sadly, the Dollar Home program is a great opportunity for only local governments, but can’t immediately benefit families trying to find affordable housing as soon as possible. It’s a common misconception that the Dollar Home Program can provide families $1 homes directly. Instead, they provide that opportunity to local governments. Luckily, there are other HUD home assistance opportunities like:

Housing Choice Voucher Program

Also known as Section 8, this housing assistance program aims to help people get affordable  housing. According to HUD, housing is only considered affordable if it is less than 30% of a person’s income. That is why this program can provide eligible recipients housing vouchers. These vouchers can be used as a form of payment at properties that accept them. The best part about this program is that recipients can find a property! They aren’t limited to properties that are owned and managed by HUD.

Eligibility criteria for this program varies by location. However, you can generally expect to need to meet requirements that involve:

  • Income Level
  • Family Status
  • Citizenship Status
  • Eviction History

While this program can provide a lot of support, there are typically long wait times to receive assistance. After you submit an application, you can expect to be placed on a waiting list that on average lasts 28 months. However, priority will be given to those that have a higher level of need! If you want to apply for this program you will need to get in touch with your local public housing authority (PHA).

Public Housing

Another HUD housing assistance option is public housing. This is an option that provides recipients the chance to pay 30% of their income towards the cost of their housing. However, unlike Section 8 housing, recipients can only move into units that HUD owns and manages. Your local PHA will act as the landlord. Typically these are apartments but can be other forms of properties as well. Similarly to Section 8 housing, eligibility will vary depending on the location. However, factors that are important to your application include:

  • Income Level
  • Family Status
  • Citizenship Status
  • References

If you want to apply for this program you will need to get in touch with your local PHA.

Good Neighbor Next Door Program (GNND)

The Good Neighbor Next Door Program (GNND) is an assistance opportunity that provides discounted homes to eligible recipients. When you think of a “good neighbor”, it refers to those that work as a:

  • Law Enforcement Officer
  • Pre-k to 12th Grade Teacher
  • Firefighter
  • Emergency Medical Technician (EMT)

Through this program, eligible buyers can purchase a home with a discount of 50% of the listing price. However, those that take this discount must live on the property for 36 months as their sole and primary residence. If you are interested in these types of homes, you can review listings for your state online. There will be instructions on the HUD site that will help you understand the steps you need to take if you are interested in any of the homes. When reviewing homes, you can expect the number of properties to change on a weekly basis.

It is important to point out that you will need to sign a second mortgage and note for the discount amount. There will be no payment requirement or interest on the second mortgage but it is a requirement of this program.

Mixed-Income Housing

While mixed income housing may not be offered by HUD per say, it is supported by HUD. That’s because HUD aims to help combat the affordable housing crises by providing tax incentives to landlords that offer discounted units to qualifying individuals. That’s where the name comes from because it’s a mix of income levels in the apartment complex! The rent prices for these affordable units will vary. They may have a rent based on the housing market. However, they could also have a rent based on the income of the individual in the apartment, or even another setup.

Foreclosed Homes for Sale

Another affordable home option are foreclosed homes for sale. The Federal Housing Administration (FHA) backs loans offered by lenders. If a borrower defaults on their loan, then the property can fall into foreclosure. Once the property goes through foreclosure, it belongs to the FHA to sell.

Since the FHA is trying to recover from the loss associated with this property, they typically offer these homes at a price lower than the market value. However, it is important to note that these homes typically have damage and will not have a home inspection prior to buying.

If you are interested in finding these types of homes you can check out the HUDHomeStore website to review your options.

Bottom Line

Some people have heard about how the Dollar Home program can provide families the chance to buy properties for just $1. However, that’s not the case. Instead, the Dollar Home Program provides local governments the chance to buy properties that are worth less than $25,000 that have been on the market for 6 months for $1. The properties can be used by local governments to provide affordable housing to those in need. However, there are other HUD housing assistance options that can provide individuals the chance to get housing assistance like:

If you want to benefit from these programs, you can research online or get in touch with your local PHA. Make sure to review your options in-depth. There may be more affordable housing opportunities than you realize!

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