A friend wants to give me her house, I am homeless. How do we avoid taxes or extra expenses?

Where do you plan to get money for utilities, insurance, taxes and upkeep.

Your friend will probably have to pay gift taxes but you shouldn't have any tax liability on the transfer. One possible way to avoid them is for her to sell you the property at market value and you sign a promissory note to pay a nominal amount each year with a balloon payment at the end. Then each year, she can forgive part of the balance (I think its $14K this year). So you set the term of the loan so the balance will be fully forgiven by the time the balloon payment rolls around.

I agree with Scottgem. She can't just give you the house without a huge tax for her.
My concern is that she has some reason for giving you the house, such as debts, that she thinks will go away. They won't. Can you tell us more about what is going on? Will she live there with you, or leave, and does she owe a mortgage or back taxes?

Actually the friend would most likely have to file a gift tax return but wouldn't actually owe any taxes, assuming that the house is worth less than $5.34 million (the lifetime gift tax exclusion amount) and assuming that she has not previously used up any of her annual gift tax exclusions. However she should carefully consider the implications this transaction might have on her estate planning. As for other fees - there will be titling fees, and as already noted going forward you will be responsible for real estate taxes, utilities, insurance and maintenance costs.