Usually, when you think about buying a home, the first thing that comes to mind are the hundreds of thousands of dollars that you’ll have to spend on that property, and that’s if we assume you’re not looking for your dream house.
However, the housing market has a lot more to offer, and with the help of the US Department of Housing and Urban Development, a vast amount of housing options have become available to the average American.
Their main goal is to provide affordable housing for everyone, and among the assistance options they provide, you may run into the Dollar Home program, which may sound confusing at first.
You’re probably scratching your head and wondering how we got down to a single dollar when it was seconds ago that we mentioned homes can set you back hundreds of thousands.
We’ll go into full detail about this program and what you need to know if you wish to benefit from it.
What is the Dollar Home program?
The program was created by the HUD as a way to help local governments offer housing options for eligible Americans in the area, meaning that if the HUD allows it, your local government could obtain one of these homes for the price of a single dollar.
These homes are usually those that have undergone foreclosure, although for it to qualify for the Dollar Home program it needs to have been on the market for at least 6 months at that point.
A foreclosure happens when a borrower defaults on their loan, after which the property is seized from the current owner and used as a means to cutting the borrower/bank’s losses.
That being said, if the property value is $25k or lower, the local government can buy it for $1 if it hasn’t been sold in the first 6 months after it was listed.
A common misconception regarding the program is that just about anyone can take a dollar and purchase an entire house, which is categorically untrue, and these homes usually have to undergo intense repairs, often funded by local nonprofit organizations that the government chooses to collaborate with.
This housing is then offered as an affordable housing option for those who need it, affordable meaning that the monthly expenses do not exceed 30% of the applicant’s monthly income.
Finding these $1 homes
It’s important to reiterate that you can’t purchase these homes yourself, and there’s only a point in searching for them if you’re already part of a local government or an agency that’s looking to provide affordable housing in your area.
Much like when looking for foreclosed properties, you can find these $1 homes on the HUD Home Store, where a vast amount of properties are listed.
Of course, if you’re specifically looking for homes from the Dollar Home program, you’ll want to select that in the search bar, so as to avoid looking at other housing options that the HUD made available.
As helpful and practical as it is, the program can’t be utilized by households that are looking for an affordable housing option, which doesn’t mean that your search should end there.
The HUD offers a variety of housing assistance options, among which you’ll find the Housing Choice Voucher Program, Good Neighbor Next Door program, and a great amount of foreclosed homes that you can buy for a fraction of the price such a property would normally fetch.
Housing Choice Voucher Program (Section 8)
Often known as Section 8, the HSVP is a housing assistance option that focuses on helping needy Americans find affordable housing.
They do this by offering housing vouchers, which are then used to cover some or the entirety of the housing expenses, although this is only possible with participating landlords.
The main advantage this program has above the rest is the fact that applicants can choose a home on their own, and the program isn’t limited just to homes managed and owned by the HUD.
While it can be helpful, actually receiving assistance can be a painstakingly long process, and waiting for your vouchers can take up to 28 months on average.
If you still wish to apply for benefits from Section 8, you can contact your local Public Housing Authority and learn more about how to continue the application process.
Good Neighbor Next Door
The GNND program focuses on creating peaceful and safe neighborhoods, and they do this by offering affordable housing options to qualifying Americans with a specific job description.
Essentially, the “Good Neighbor” part of their name refers to the law enforcement officers, firefighters, EMTs, and teachers to whom they offer assistance.
Through the program, these men and women can purchase homes in a designated area at a 50% discount, with the main requirement being that they continue living in the area for the following 36 months.
If you wish to look through properties of this type, look for a listing in your area on the HUD Home Store, where you’ll also find a detailed explanation of how to apply for the program.
It’s important to note that you will have to apply for a second mortgage while noting the amount discounted from the property’s original value, and while there won’t be any interest rate payments on it, it’s a mandatory requirement for the GNND assistance option.
While it may have sounded like a dream come true, $1 homes simply aren’t available to just about everyone, and only local governments can make use of these properties.
This doesn’t mean that all hope is lost, and your search for affordable housing should continue past this hurdle.
Every one of the options available through the HUD has its advantages and downsides, and it’ll be up to you to discern which one suits you and your family best.