The Dollar Home program, administered by the U.S. Department of Housing and Urban Development, began in 1998 to help get rid of the department's glut of foreclosures and help provide affordable housing.
The Los Angeles Times reported Sunday that under the program as it was designed, local governments would buy the homes for $1, fix them up and resell them to poor families.
Critics say that is not what has happened, the newspaper reported.
"This is bad for taxpayers on both sides of the transaction," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.
The newspaper noted that nationwide more than 2,300 homes have been sold by HUD for $1 each. Of the 326 homes sold in California, about half of them were bought by companies or individuals who typically resold them.
The city of San Bernardino bought 62 Dollar Homes, more than any other city or county in the state.
"They went back to the private market, and hopefully they were maintained and kept up," said Carey Jenkins, the housing director of San Bernardino's economic development agency. "And that was pretty much the end of our involvement."