It’s a given that in a slumping market home prices are going to decline. But $1 for a house intown?

Apparently, even the huge U.S. Department of Housing and Urban Development can grow exasperated trying to sell a single home. So sometimes it dangles the offer of a buck.

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Pouya Dianat/pdianat@ajc.com

Lori Lewis of HUD looks through a home the agency is trying to sell to local government agencies for $1. The governments then make the homes available to low-income families.

The catch — there’s always a catch — is that the buyer must be a local government wanting to create affordable housing.

“Hey, I got this house for $1. Call the I.G.,” joked Stephanie Parker, a senior single-family housing specialist with HUD who was showing a dollar home on Sims Street in southwest Atlanta. (I.G. is short for the inspector general, who looks into shenanigans.)

Dollar homes are part of HUD’s growing inventory of foreclosed properties, the result of defaults on FHA-insured mortgages.

HUD homes in Georgia grew 39 percent from September 2007 to September 2008. Sixty percent of HUD’s 3,000-plus Georgia homes are in six metro Atlanta counties.

The dollar home program predates the housing meltdown, but it has become more active because of escalating foreclosures.

Governments nationwide used to buy about 100 such homes a year, according to HUD. This year that number has more than tripled in 10 months.

Still, 100-cent homes remain scarce. In Atlanta just two were on the market last month.

HUD decides a buck is better than nothing after waiting at least 180 days. The government has owned the Sims Street house since July 2007, courtesy of Wells Fargo.

The lender gave the house to HUD when the borrower, who had bought the property in 2000 for $84,000, quit making payments.

HUD paid Wells Fargo the loan balance, then had an appraisal done, which turned out to be $50,000. After that, it tried selling the house through PEMCO Ltd., the company contracted to dispose of HUD homes in Georgia.

If HUD could kick itself, it probably would.

It rejected three investor offers: one for $23,000 and two for $14,000.

The last offer was in June. After a while, $1 started to look pretty good.

So what does a buck buy? On Sims Street, a 1920 vinyl-clad house with three bedrooms and 1 1/2 baths.

It doesn’t buy air conditioning, a stove, a kitchen sink, plumbing or wiring. Those were all stolen.

Vandals carved up the walls to grab some of the plunder.

Maybe even more surprising than the extraordinarily low price is the number of dollar homes that have sold in Georgia — just one since December 2006.

“You can get it for $1 but if you’ve got to put $90,000 into it, it’s not really affordable,” said Hawthorne Welcher, Augusta’s assistant director of housing.

Augusta Housing and Community Development bought a $1 ranch house in May. The city plans to work with a nonprofit group to restore it.

The house needs about $65,000 worth of work before it goes on sale for between $80,000 and $120,000, Welcher said.

One of the two dollar listings in Atlanta, on Azlee Place in northwest Atlanta, expired last week. Neither Atlanta nor Fulton County took the bait, so it’s available now to nongovernment purchasers at a new price — $15,000.

A dollar will still buy the Sims Street house, but only until Friday.