In A Real Estate Guide for Veterans, Joseph W. Gaul goes into detail describing dollar homes as well as the pros and cons of buying them. While the chapter in the book is very informative, we thought we’d take a minute to briefly explain what they are.
The first thing you should know is that dollar homes aren’t really a dollar. For reasons we’ll explain, the homes can be sold for a dollar, but the buyer will end up paying significantly more than that. The second thing you should note is that dollar homes are not intended for the average homebuyer, there’s a reason most home buyers stay away from them.
When an individual defaults on a home and it’s repossessed, the bank can sell it back to the federal government. The U.S. Department of Housing and Urban Development (HUD) can then sell it through the Federal Housing Administration to the municipalities. HUD’s dollar homes initiative was created in 2000 to help “foster housing opportunities for low to moderate income families and address specific community needs by offering them the ability to purchase qualified HUD-owned homes for $1 each.”
Dollar homes are generally intended to be used by non-profit organizations. Non-profits then operate out of the homes to enrich the communities that they are in. True dollar homes cannot be resold to private home buyers, only to other charities.
Dollar home buyers still need to pay closing costs, property taxes, utilities and other fees as they would when purchasing any other home. Dollar homes are typically located in high-crime neighborhoods and may require tens of thousands of dollars of repairs to make them liveable.
For the average home buyer, dollar homes aren’t truly feasible. In most cases, they would need to set up a non-profit organization and operate it prior to the purchase. All of this and more is covered in greater detail in A Real Estate Guide for Veterans.
Whether you’re looking for home buying help for veterans in Chicago IL, home buying help for veterans in Norfolk City, VA, or anywhere across the U.S. consider picking up a copy of A Real Estate Guide for Veterans to gain important insight and tips into making your first home your best purchase.