U.S. Government REOs

The federal government also lists their REOs — properties that the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA) received because of loan guarantees. These and other homes offered for sale by the federal government are available online at www.hud.gov/homes/homesforsale.cfm.

The United States Department of Agriculture (USDA) often has properties available. Foreclosures from their Rural Housing program are available.

The USDA offers financing to potential buyers that want to purchase their REOs to live in the property and to investors. Here are the available financing options directly from the USDA:

Eligible Applicants (Program)

Credit is available for program-eligible applicants on program properties. Loans are made for thirty-three years at the present interest rate of 6.0 percent (effective June 1, 2006). Payments are based on the total family income. Eligibility is also based on credit history, repayment ability, and the availability of other credit.

Nonprogram Applicants

Properties that will be occupied by the purchaser can be financed for a term up to thirty years at the present interest rate of 6.5 percent. Purchasers must pay a 2 percent down payment. Investors can obtain a loan for ten years at the present interest rate of 6.5 percent. If more favorable terms are necessary to facilitate the sale, the loan may be amortized over a period of up to twenty years with payment in full due not later than ten years from the date of closing.

Purchasers must pay a 5 percent down payment. The USDA REO properties are available online at www.resales.usda.gov/sfhdirect/SFHPropMain.cfm.

State and Local Government REOs

Your state and county may also list properties for sale on their Web sites. Spend some time with your favorite search engine to look for these properties. Check out your local county government sites. It may take some work on your part, but you can find REOs.

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