A federal foreclosure is a foreclosure property owned by a government agency. A federal foreclosure takes place when a borrower defaults on a loan that is backed by the federal government such as the Department of Housing and Urban Development (HUD), the Federal National Mortgage Association or the Federal Housing Administration (FHA).
Investors are looking for a bargain and federal government foreclosures offer a significant savings over traditional properties that are for sale. Federal properties for sale can be a cheap way to enter the rental market or add to your investment portfolio. The biggest benefit for investors is the deep discount when buying foreclosed homes.
Several federal government agencies own properties that have fallen into foreclosure and you may find them listed under the following:
Federal government foreclosures have defaulted back to the government, rather than a traditional bank, because the government backed the loan. In this situation, they are similar to banks that have repossessed a property.
Investing in government foreclosures can be very advantageous for both new home buyers and investors – Especially when you can get a significant savings by buying federal homes for sale.
Homeowners get tax breaks, save money and are investing in something rather than spending money on rent. By finding out how to buy a foreclosed home from a government agency, you have the opportunity to get all of the advantages of buying a home at a discounted rate! Buying foreclosures is a great way to build wealth, too. Rental properties and vacation homes can provide earnings to the investor. A federal foreclosure is not different than buying any other foreclosure. Any investor or potential home owner can review the foreclosure listings at the agencies listed above, there is no preference given to federal employees.
Getting foreclosure financing is similar to financing any other home purchase. If you are eligible for federal programs that assist buyers, such as VA financing or first time buyer assistance, buying a federal foreclosure will not prevent you from using those programs. You are not required to have federal home loans or use the federal financing bank in order to buy a government foreclosure. If you are eligible for federal financing, like an FHA loan, you may get a lower interest rate than at a traditional bank. No matter what type of financing you choose, make sure to shop around for mortgage rates before you close on the property.
