When people are thinking of purchasing a house, they generally imagine home listings that cost hundreds of thousands of dollars, but the housing market is larger than you think. The United States Department of Housing and Urban Development (HUD) provides different housing assistance options. Their main goal is to help individuals find affordable housing and one of their assistance options is called the Dollar Home Program. Don’t let the name fool you–this program might not be what it seems!
What is the Dollar Home Program?
This initiative from the HUD can assist local governments to offer housing assistance options to eligible individuals. Your local government could have the chance to purchase a HUD-owned home for just $1. Yes, one single dollar!
The Federal Housing Administration (FHA) backs home loans that lenders offer. If a borrower defaults on their loan, then the property can experience foreclosure. Once the property experiences foreclosure, it belongs to the FHA to sell. Empty single-family homes that have gone through this process can be provided through this program if they have been on the market for six months and meet market value guidelines.
If the property has a market value of $25,000 or less and was on the market for six months, then local governments might be able to buy the property for $1. Local communities can repair the property and benefit from the savings that this program offers. They are then able to provide affordable housing to eligible households.
Local governments that want in on this program can work with local nonprofit homeownership organizations. Additionally, they could combine existing local programs that resell properties to qualifying people in the community. It is a common misconception that households can purchase a home directly. The local government would buy the home for $1 and then offer affordable housing (which is no more than 30% of a person’s monthly earnings according to HUD) to eligible recipients.
How Can You Find $1 HUD Homes?
You should keep in mind that only local governments can purchase $1 properties. If you are a part of a government agency that wants to buy these homes, then you can visit the HUDHomeStore online. You can look through the available properties on this online platform but will need to specify Dollar Homes in the search bar.
Other HUD Assistance Alternatives
It is a common misunderstanding that the Dollar Home Program can offer households $1 homes directly. Instead, they offer that option to local governments. Fortunately, there are other HUD home assistance options such as:
- Housing Choice Voucher Program
- Public Housing
- Good Neighbor Next Door Program (GNND)
Housing Choice Voucher Program
Also referred to as Section 8, this housing assistance option focuses on helping individuals get affordable housing. According to the HUD, housing is only considered affordable if it is less than 30% of an individual’s income. This is why this program can offer qualifying recipients housing vouchers. These vouchers can be utilized as a type of payment at homes that allow them. The greatest advantage to this program is that recipients can look for a property–they are not restricted to properties that the HUD manages and owns.
Eligibility requirements for this program differ based on location. You can typically expect to meet requirements that include:
- Income Level
- Family Status
- Citizenship Status
- Eviction History
While the program can offer a lot of relief, there are generally long wait times to get assistance. After you submit an application, you can expect the program to place you on a waiting list that approximately lasts 28 months. The program will provide priority to individuals who have a higher level of need for assistance. If you are interested in applying for this program, you will need to contact your local public housing authority (PHA). They are the ones that actually administer the program.
Public Housing
Another common HUD housing assistance option is public housing. This is an opportunity that offers recipients the chance to only spend 30% of their income on housing expenses. As opposed to the Section 8 housing program, recipients can only relocate to units that the HUD owns and manages. Your local PHA will serve as your landlord. Generally, these are apartments, but you can find other types of properties as well. Similar to Section 8 housing, eligibility will differ based on the location. Factors that are important to your application involve:
- Citizenship Status
- Income Level
- Family Status
- References
If you are interested in applying for this program, you will need to contact your local PHA.
Good Neighbor Next Door Program (GNND)
The Good Neighbor Next Door Program (GNND) is a housing assistance option that offers properties at a reduced rate to qualifying recipients. When you imagine a “good neighbor” it refers to those that have a position as a:
- Pre-k to 12th Grade Teacher
- Firefighter
- Law Enforcement Officer
- Emergency Medical Technician (EMT)
With this program, qualifying buyers can buy a home with a 50% discount on the listing price. Individuals that take this discount need to stay on the property for 36 months as their only primary residence. If you want to live in these types of homes, you can look through listings for your state online. There will be guidelines and instructions on the HUD site that will help you learn the steps you need to follow if you want any of the properties. When you are looking through these homes, you can expect that the number of homes will change every week.
It is important to note that you will need to sign a second mortgage and keep in mind the discount amount. There will be no payment requirement or interest rate on the second mortgage, but a second mortgage is necessary for this program.
The Final Verdict
Some people know about how the Dollar Home Program can offer households the opportunity to purchase properties for just $1, but that is not the case. Instead, the Dollar Home Program offers local governments the opportunity to purchase homes that are worth less than $25,000 and have been on the market for six months for $1. The properties can be used by local governments to offer affordable housing to individuals that need it. Other HUD housing assistance options can offer people the chance to receive housing assistance such as:
- Housing Choice Voucher Program
- Public Housing
- Good Neighbor Next Door Program (GNND)
If you are interested in benefiting from these programs, you can look online or contact your local PHA. Make sure you look through your options closely. There might be more affordable housing options than you think.
