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  Category: Articles » Finance » Real Estate » Article

Investing in Government Foreclosures: HUD houses and VA homes

By Rick Martin

One of the hottest businesses of our times is represented by the investments in real estate properties. Government foreclosures are only an option from this widely developed field, but a very attractive and profitable option, since this way you can buy properties for a lower price than their actual cost. A government foreclosed property is a property repossessed by a government institution because its owner defaulted on paying his loan. After that, the property is sold at auction to the highest bidder.

There are federal and state loan programs which offer you assistance if you are interested in buying a house, like the US Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), FDIC, Freddie Mac, IRS, SBA, GSA and Fannie Mae. The most popular government foreclosures are HUD houses and VA homes.

HUD houses are houses acquired by the US Department of Housing and Urban Development and they include townhouses, single family residences, condominiums and other residential properties. These houses became possessions of HUD because their owners were not able to meet the payments of an FHA-insured mortgage. HUD wants to sell them as quickly as possible. Almost anyone can purchase HUD houses, if pre-approved for a mortgage or has the necessary amount of cash.

Police officers, fire fighters, emergency medical technicians or teachers can buy HUD houses at 50% of the listed price. But everybody should be motivated to buy these properties, because they are sold below market value. In addition to this, HUD pays up to 5% of the closing costs if it is mentioned in the contract, a HUD approved real estate agent helps you for free, HUD homes are pre-appraised meaning that you can move in very fast and you have access to HUD repair loans on certain HUD houses, since they are sold on an "as-is" basis.

There are more HUD houses on the market than VA homes, because there are more FHA loans than VA guaranteed loans. FHA credits almost anyone, but VA is very exclusive. But you should not forget about VA foreclosures if you are looking for your dream house or if you want to enter the world of real estate investments.

People who have served in the military are helped by the Department of Veterans Affairs (VA) to buy homes for their families. VA guarantees their mortgages, but when they default on the loan, the agency buys the house from the lender and offers it for sale. This is how VA homes for sale appeared and why you don't have to be a veteran in order to buy a VA foreclosed home.

First of all, it is recommended to find a real estate agent in your area, who will guide you through the process of buying and will provide you with a list of VA homes available. He will advise you about the government policies and procedures, which change very often. The agent will be the one to submit your offer via fax, mail or online and will be notified if your offer is chosen.

When you buy a VA foreclosed house, you benefit from all the advantages of the military, so you can buy it with no or very little money down. A VA foreclosed house can be bought even for 50% of its market value, because VA wants to get rid of each foreclosure very quickly. VA homes are usually in better condition than HUD houses, because they are cleaned up before the sale. Other advantages when buying VA homes include low interest payments, no re-payment penalty and fewer purchasing costs. VA pays the closing costs for you up to 6% of the price.
About the Author
If you want to buy a beautiful house for your family or if you want to start your real estate business, you should not forget to make some research about government foreclosures. HUD houses and VA homes could be the key to your success and well-being!

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