When the housing market hits bottom and foreclosure rates rise, it is possible to buy a house for $500. Often the money goes to the broker's commission, leaving nothing for the owner, according to CNN Money. Typically, these houses are repossessions from banks or other financiers and require quite a bit of work to make them livable. The U.S. Department of Housing and Urban Development provides loans for the renovation of certain foreclosed properties.
Contact your housing development department and ask if your city is participating in the Neighborhood Stabilization Program. This federal program authorizes funds for local governments to purchased foreclosed properties that are lowering property values.
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Request the application information from the department. Municipalities can use Neighborhood Stabilization Program grant funds to assist individuals when buying a home, but each grantee maintains its own requirements for assisting purchases.
Complete the application and return it and any required documentation such as financial information to the clerk. Ask for a list of available properties.
Visit HomeSales.gov if your city does not have homes available for $500. HomeSales is a government-operated website providing a listing of homes for sale from the government. These homes may have become government property due to abandonment, taxes or criminal penalties.
Search the listings by clicking on your state and choosing the city where you want to buy a home and selecting "Search for Properties."
Look at the listings and select a home with a selling price of $500.
Contact the listed agent and arrange to purchase the house.
Having another place to live while you perform the repairs is essential for most $500 homes.
You may have to sign an Affidavits of Compliance Responsibility to qualify to purchase a home through a neighborhood renewal program. This affidavit commits you to making the necessary repairs.