What is the HUD $1 Home Program?

Many Americans find themselves in need of affordable housing. That is why they review options from the United States Department of Housing and Urban Development (HUD). When reviewing different assistance opportunities, they may stumble across the Dollar Home Program. At a quick glance, many Americans believe that they can buy a HUD-owned home for just $1. However, the Dollar Home Program may be a little bit different than what you expect, but still could potentially help your situation!

Understanding the Dollar Home Program

HUD wants to provide Americans in need with affordable housing. That is why they work with both state and local governments to help provide this assistance. In fact, they even work with local organizations!  When working with local governments, they offer their Dollar Home Program initiative. That means local governments have the chance to buy HUD-owned properties for $1. That’s not a joke, they can actually purchase the property with one dollar!

Since the local government is the one that has the chance to purchase the properties for that price, that means it is not available to families looking for housing at that price. Instead, they can get the property from their local government that offers it as a form of affordable housing. However, let’s dive into this assistance option a little more so you can get some more context!

Not every property that HUD owns can be a part of the Dollar Home Program. HUD gets properties from foreclosures that come from government loans or government-backed loans. The Federal Housing Administration (FHA) is a part of the government that offers home loans and insures home loans that lenders offer.

When an individual defaults on their loan, it could lead to foreclosure. If the property goes through foreclosure then it is left for HUD to deal with. That means they will resell it on the market in hopes that they can recover from some of the loss.

If a vacant single family home is on the market for at least 6 months (and costs less than $25,000) then HUD allows local governments the chance to buy the property for $1. Local governments and communities can improve the property and provide it to those in need as a form of affordable housing.

If the local government is interested in getting these kinds of properties, they can partner with local nonprofit homeownership organizations or other local home programs that aim to provide affordable housing to those in the community. Sadly, families in need cannot get the property directly for $1. Instead, the government can buy the property for  $1 and still offer it as a form of affordable housing.

How to Find $1 HUD Homes?

We may sound like a broken record, but we want to remind you that families cannot purchase the $1 home directly. Instead, your local government would be able to buy the property for this price. Individuals that are a part of a government agency can review $1 HUD homes on the HUDHomeStore online. This platform allows people to check out the available properties under this program.

Additional HUD Housing Assistance Opportunities

Since families can not directly buy homes for $1 under the Dollar Home Program, those in need can find other assistance opportunities for support. Luckily, HUD provides a variety of different housing assistance options that may be able to help. Some of the other assistance opportunities they provide includes:

Foreclosed Homes for Sale

Think about the Dollar Home Program, the homes that are a part of that program come from foreclosure. However, they have to meet other criteria like being on the market for 6 months, costing less than $25,000, etc. Instead, foreclosed homes that are not a part of the Dollar Home Program are another option to consider!

When HUD has a foreclosed property, they still need to try to recover from the loss that came from the original borrower not handling their mortgage properly and defaulting on their loan. Once their loan defaults, the FHA needs to sell the property (which they can do since they are a part of HUD!).

Foreclosed properties tend to be offered at a cheaper price since the lender needs to recover from the loss. However, these homes don’t go through a home inspection before going on the market which means a buyer has to buy “as-is”. Once a buyer purchases the property, they can find that a lot of work needs to be done on these properties which means they are more risky to purchase! If you want to find these types of homes, you can review properties on the HUDHomeStore.

Good Neighbor Next Door Program (GNND)

Everyone wants a good neighbor! That is why it should come as no surprise that there is the Good Neighbor Next Door Program (GNND). This program allows qualifying individuals to benefit. This includes people that work as a:

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

This is a very interesting program for those in need of a more affordable property because it provides qualifying individuals the opportunity to buy an eligible property with a 50% discount of the listing price. However, there are conditions that recipients of this program need to meet. For example, those that use this program to buy a discounted property need to live in the residence for 36 months, sign a second mortgage, etc.

If you want to buy a home through this program, you can check out listings that are available for your state online. The online site will also provide details around how you can get these homes through the program. Just like the normal housing market, you can expect the listings of homes to change consistently.

Housing Choice Voucher Program

The Housing Choice Voucher Program is an assistance opportunity that can help people get affordable housing. Another name for this program is Section 8 and it can help people through housing vouchers. Housing vouchers are provided by the government that can be used as form payment at properties that accept them. These vouchers help recipients handle the cost of rent!

When a recipient receives these vouchers, they will need to find a property that accepts them as a form of payment. Once they find the property, it will need to be inspected by the recipient’s local Public Housing Authority (PHA). This PHA will make sure the property is up to standards and work with your landlord when helping with your rent.

Eligibility for this program depends on the state. That’s because each state will have their own requirements around the program. Generally, you can expect eligibility criteria to include requirements like:

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

If eligible to receive this assistance option, you should expect to deal with a waiting list. That’s because there is more demand than there is supply! So people can expect to be on the waiting list for 18 to 24 months. However, individuals that are more in need can expect to receive assistance before people that are less in need because the lists focus on prioritizing individuals in the most amount of need. You can start the application process at your local PHA and get any information you need from them!

Public Housing

HUD offers plenty of housing assistance options. Another opportunity they have is public housing. This is an assistance opportunity that typically allows recipients to pay just 30% of their income towards their cost of housing. The properties of this program are owned and managed by HUD through local housing authorities (HAs). Just like Section 8 housing, qualifications will depend on the area. Factors that usually impact public housing eligibility include requirements like:

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

To Sum Up

While the Dollar Home Program can seem promising, it isn’t the assistance opportunity you may think it is. This is a program that allows local governments the chance to buy qualifying properties for $1. Qualifying properties are foreclosed, single family homes that cost less than $25,000 and have been on the market for at least 6 months. They can then turn these properties into a form of affordable housing that they can provide to those in need that are a part of the community.

However, besides the Dollar Home Program there are other assistance opportunities that may be able to help you deal with housing costs like:

The best place to review these assistance opportunities is by getting in touch with your local PHA. Your local PHA will have information about programs that may be able to help you deal with your housing situation.

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