$1 Homes For Sale In Indiana, But Don’t Go Counting Quarters Just Yet

One of the dozen homes purchased at auction by the city and being "sold" for $1.

One of the dozen homes purchased at auction by the city and being “sold” for $1.

When you hear that Gary, IN, has a dozen homes for sale for $1 each, you might be inclined to dig into your wallet and ask, “Will you take a 10-spot for the whole lot of them?” But these home aren’t available to just anyone with four quarters to rub together, so nearly 94% of interested buyers have been turned away.

Gary’s mayor, Karen Freeman-Wilson, tells CNNmoney that when the city announced the availability of these properties back in June, it received applications from 400 potential buyers.

But nearly all of those applicants didn’t meet the city’s strict guidelines for eligible buyers:

-Must have lived in Gary for at least 6 months;
-Must have $1,000 in savings;
-Must earn at least 80% of the area’s median annual income of $35,250;
-Must demonstrate that they have the financial ability to rehabilitate the home;
-Must not currently own a home.

Additionally, anyone who gets one of these properties must reside there for five years before assuming full ownership. Failure to stay the full five years forfeits the buyer’s rights to the property.

So while these criteria aim to make sure that potential buyers have the means and motivation to improve the run-down properties, they also result in very small pool of potential buyers. Mayor Freeman-Wilson says that only 25 of those initial 400 applicants are now eligible to buy these homes. Who gets to buy the bottom-dollar houses will ultimately be decided via random drawing in September.

The homes in this sale were purchased by the city at auction after owners fell behind on property taxes. The goal is for the new buyers to rehab the seen-better-days buildings, not to flip for profit, but to improve the community and stabilize property values for all the neighbors who continue to pay their bills and who haven’t let their homes fall to pieces.

The mayor is hoping that this program proves successful. If so, the city plans to sell off 50 houses each year.