U.S. Department of Veterans Affairs (VA) foreclosures are marketed in much the same way as HUD homes. After the VA acquires the homes through foreclosure, they are sold through a bidding process, in which bids are submitted by real-estate agents. However, there is one important difference from the HUD process. The VA does not give preference to owner-occupants. Investors are allowed to bid from the very first day.

The VA also offers financing to investors who buy foreclosed homes, even if they are not veterans of the armed services. An investor might be able to buy a VA home with little down payment. The VA is somewhat more lenient about buyer credit requirements, and it does not use credit scores to determine a buyer's eligibility.

The number of VA-insured properties in most towns is far less than the number of properties purchased with an FHA loan, so you'll find that VA foreclosures are usually less common, too. The exception might be in towns located near a military base, where affordable housing for families is available nearby. A military town in your region could be a good source of potential properties. Search the VA's online listings to find out if there are clusters of foreclosures located in areas near you.