Two more sources for foreclosed properties are the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), both major players in the secondary housing market in the United States. Fannie Mae and Freddie Mac do not make loans, but they purchase loans from lenders. Both agencies always have foreclosures to sell.

Fannie Mae and Freddie Mac list their foreclosed properties with real-estate agents, who then place them in the multiple listing service (MLS) just like any other listing. Bids are not used — anyone can make an offer on a property at any time. The homes are sold as-is, but they are not typically bargains. They are usually priced at or above market value, sometimes even when repairs are necessary.

The offer to purchase must include special forms issued by the seller, usually dealing with the as-is condition of the property, the closing date, and often they include clauses that require a buyer use a specific closing agent. It's a good idea to have a real-estate attorney review all of the special forms before you sign them.

Even though the homes are sold as-is, Fannie Mae and Freddie Mac will accept contracts with inspection contingencies. They won't make any repairs, but the contingency gives a buyer the right to back out of the contract with no penalties if problems are discovered that are more than they want to take on.

It's important to do a thorough evaluation of any property's market value before you decide it's a good investment. Fannie Mae and Freddie Mac properties are no exception to that rule.