Saving up for a home's down payment can be a hefty task that's financially out of reach for many. But the town of Gary, Indiana has a special program to make home ownership easier by selling a handful of homes every year for just $1 apiece.
Called the Dollar House Program, the initiative opens home ownership up to those who would not otherwise be able to afford a traditional mortgage sale, says Lakia Manley, the housing coordinator of Gary's Community Development Division.
The program also addresses a chronic problem for the town. Since the 1960s, a decline in the steel industry has led to a dwindling population and an abundance of unoccupied and abandoned homes, Business Insider notes.
Homeowners are selected through a lottery system and must meet a few key requirements. They must rehabilitate the home within one year, occupy the home for a minimum of five years and have a minimum annual income of around $35,000 a year per person.
Additionally, the homeowner is required to fix any code violations and bring the home up to habitable standards.
Homes in the Dollar House Program are prime fixer-uppers. They're not so damaged that they need to be demolished, but still need significant remodeling and elbow grease.
"This would allow the person to get a property for a dollar, put their own sweat equity into the home by doing the necessary rehab work to bring the property up to code and live in the property for five years, before they can do anything as far as rent or sell the property," Manley says.
The program was introduced around 30 years ago, under the name The Homestead Program. The program was eventually shuttered and reinstated as the Dollar House Program in 2013.
Mayor Karen Freeman-Wilson, who reinstated the program, had a personal connection to the program. A dollar home recipient herself under the Homestead Program, she wanted to offer others the same opportunity she had, Manley tells CNBC Make It.
Manley says the most recent lottery selection found buyers for seven properties. The program is gearing up to dole out another round of dollar houses soon in this town located 25 miles south of downtown Chicago.
The program is a win-win, Manley says. New homeowners are created, blight is decreased and since properties are rehabbed, housing values improve.
"The neighbors are really excited about it," Manley says of the community's reaction to the Dollar House Program. "It's a good thing."
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