1. | Foreclosure Deals | Contact@ForeclosureDeals.com |
The
Beginner’s
Guide to
Government
Foreclosures
Contents
Introduction ..……………………..1
HUD Foreclosures ……………….2
VA Foreclosures…………………..3
USDA Foreclosures………………3
Contact Info…………………………4
Owning a quality home for a fraction of its
market value is what likely drew you to
foreclosures. However, while public
foreclosure auctions are the most common
type of foreclosure sale they may be too fast-
paced for some buyers. If this option isn’t
right for you, Government foreclosures
(GOV) might be better.
GOV foreclosure homes are foreclosed homes
owned by government agencies obtained in
one of two ways: (1) The previous owner
defaulted on a government loan used to
finance the property, or (2) The previous
owner failed to pay property or income taxes.
This guide will introduce you to the different
agencies that may have GOV foreclosures for
sale in your area.
[Volume 1, Issue 2]

2. HUD Foreclosures
2
 HUD pays the default: The process begins when a homeowner with an
FHA backed loan defaults on their mortgage. After the home has been
foreclosed on, HUD pays off the remaining debt on the homeowner’s FHA
loan. Now that the lender has been reimbursed, ownership of the property
is transferred to HUD.
 HUD holds a silent auction: The silent auction is the most common way
that HUD sells their foreclosed properties. During this time period, HUD
approved agents will be accepting sealed bids on the property. First time
foreclosure buyers or buyers inexperienced in GOV foreclosures may want
to hire HUD approved real estate agents to make their bids for them.
 The property goes to the highest bidder: At the end of the silent auction
period, the foreclosed property is awarded to the person who bid the most.
Do not be discouraged if your bid is rejected. If you researched the home
and remembered not to bid over your maximum pre-set amount, you’ll
know that bidding any higher wouldn’t have been worth it.
The Department of Housing and Urban Development
(HUD) has many GOV foreclosed homes for sale. Among
homes available in HUD foreclosure listings are home
foreclosures from the IRS, FDIC and Customs. A common
source of HUD foreclosures are when an owner defaults on a
loan from the Federal Housing Administration (FHA).
When this happens:

3. 3
The Department of Veterans Affairs (VA) sells GOV forecloses that end up in the VA’s
possession as a result of the owner defaulting on a VA backed loan. You do not need to be a
veteran to buy a VA foreclosure. Non-veterans can also be eligible for VA loans, such as the VA
Vendee Financing Program, when buying a VA foreclosure. In a VA foreclosure:
 The homeowner defaults on their VA loan: Like in most other real estate
foreclosures, the foreclosure process begins when the owner falls behind on their VA
loan payments and defaults. If the owner fails to pay their default, obtain loan
modification or arrange with the lender to sell their home as a short sale during this
time, the lender obtains ownership of the home.
 The VA sells the home: VA homes will usually sell to the public at 30 to 50 percent off
their market value. Keep in mind that a VA home may be in better condition than other
foreclosed properties. This is because the VA takes an active part in preparing their
foreclosed properties for sale.
What’s does that mean?
For more terms and definitions,
check out ForeclosureDeals.com’s
glossary page:
http://www.foreclosuredeals.com/G
lossary.php
VA Foreclosures
USDA Foreclosures
You may be thinking to yourself, “Wait a minute. Why would the United States Department of
Agriculture (USDA) sell homes? Aren’t they responsible for regulating farms and food safety?”
While this is primarily what the USDA does, they also award families a Rural Development loan.
As with other GOV foreclosures, if the homeowner defaults on their loan or taxes:
 The lender forecloses on the USDA home: If the
homeowner doesn’t pay their back debt or come to another
arrangement before a notice of sale is issued, the home goes
into foreclosure. The homeowner may have as much as five
business days prior to a foreclosure sale to pay what they
owe. Failure to pay certain taxes may also lead to
government seizure of the property.
 The USDA pays the default: The USDA will pay the
overdue balance on the homeowner’s Rural Development
mortgage loan in order to obtain official ownership of the
foreclosed property. The idea is to pay the default balance
now and hopefully make up the rest in a foreclosure sale of
the property.
 The USDA sells the home: The USDA will make the
foreclosed property available for sale by the public. USDA
properties are perfect for foreclosure buyers interested in
living in or flipping homes in rural communities. USDA
homes are particularly ideal for low to moderate income
families, exactly the people the USDA approves for loans in
their Rural Development plan.

4. 4
Like banks and lenders, government agencies are not in the
business of selling real estate. They make no money off
these properties while they are in their possession. They
want to sell off these homes quickly. Check with each
organization for property listings, or you can use
ForeclosureDeals.com to find them all in one place.
Always remember to check our blog for the latest
news and updates on GOV foreclosures.
http://www.foreclosuredeals.com/government-
foreclosures/
Foreclosure Deals
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Miami, FL 33181
FAX: 1-347-402-6620
Contact@foreclosuredeals.com
If it’s not a deal, we won’t list it here!
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