Mayor Scott Avedisian, left, and Council President Joseph Solomon speak at the house that the city bought for $1 from the U.S. Department of Housing and Urban Development.

The Providence Journal / Kathy Borchers

WARWICK — A ray of hope was cast on the bleak housing market yesterday when Warwick was able to use a federal program to turn a vacant, foreclosed house into an opportunity to increase its stock of affordable homes.

With Republican Mayor Scott Avedisian and Democratic City Council President Joseph J. Solomon standing shoulder to shoulder in the driveway of a slightly rundown-looking Cape house on Harrison Avenue, they announced that the city is getting the house from the federal government for $1.

The “Dollar Homes” program administered by the Department of Housing and Urban Development applies to foreclosed homes that were financed by mortgages insured by the Federal Housing Administration (FHA). Under the program, houses can be offered to municipalities if the properties have languished on the market for more than six months.

“This will be our newest piece of city property,” Avedisian said, pointing to the white-shingled house with blue shutters and brick chimney. “We are trying to take something that was a tragic situation for one of our families and turn it into something positive for someone else.”

The opportunities do not come around that often, with the Harrison Avenue house a first for Warwick and only a couple of other “Dollar Homes” acquired in Rhode Island.

The purchase needs the approval of the City Council, which was slated to vote on the matter last night. Solomon did not foresee any opposition. “I’ve talked to other individual council members about this and not heard one negative comment,” he said. “This council is very compassionate to the needs of our community and it’s a great thing to be able to utilize a perfectly good house — particularly in these trying times.”

Although the price is right, the purchase was not without its pressures, as Kevin Sullivan, the city’s community development director, found out over the past week. To guarantee a quick answer, HUD gives municipalities just 10 days to respond to the $1 offer, so Sullivan and his staff had to move quickly to assess the property and the needed repairs.

Despite the tumbledown look the house has right now with overgrown shrubs, peeling paint and crumbling brick front steps, it is actually a great property, he said. Built in 1947, it has hardwood floors, two bathrooms, a fireplace and chair-rail moldings. Although it is on the corner of busy Warwick Avenue, it is a double lot with a sweeping backyard and two-car garage.

Sullivan said that once the property is refurbished — either with federal funds or through a partnership with a private company –– the city will rent it to a low- to moderate-income family. No decision has been made yet as to how the tenant will be chosen or whether the city will manage it directly or work through its Housing Authority, Avedisian said.

Laurie Maggiano, a senior policy adviser for HUD, said the department doesn’t know the details of the foreclosures since it was not involved in the issuance of the mortgages. There has been, however, a direct correlation between the current housing crisis and the number of Dollar Homes available since the program was instituted about five years ago, she said.

“During the first four years, about 100 properties were sold to municipalities across the country each year,” Maggiano said. “But in 2008 alone, we’re up to 296 properties.”

“It’s a great house,” Solomon said yesterday, “but it’s sad to think that before this it was someone else’s home.”

bpoliche@projo.com