Government foreclosures are any property that was financed using a government insured home mortgage loan, such as a VA loan or FHA loan, and which has been foreclosed because the home buyer failed to pay the home mortgage payments for several months in a row.
In these cases, the government must take possession of the property and, because the government has no interest in owning lots of houses, the homes must be sold to buyers, often below fair market value.
If you're interested in finding those homes where the owners have not found sufficient foreclosure help to solve their financial difficulties, you can do so rather easily. There are only a few key steps you must perform to purchase a government foreclosure, assuming of course that you have a sufficiently good credit rating and income to qualify for any necessary financing required. First, you'll need to locate a property which interests you which is either being foreclosed on or is in pre-foreclosure. This step is not difficult at all since there are many online resources which list properties that are in foreclosure. They even tell you if the loans are defaulted government loans or if some other form of financing was used to buy the home.
Next, you'll need to qualify for financing. By being pre-approved for a home mortgage loan, you'll speed up the process of buying the foreclosed property by a huge amount. Unlike refinancing, you'll need to obtain a brand new mortgage on the property unless you are able to buy a 'take over payments' property. If you take over payments, you'll still need to refinance soon and pay refinance closing costs when you do so. There's just no way to avoid having to pay closing costs when obtaining home financing. Thirdly, you'll need to locate a licensed real estate agent to represent you during the home purchase. The real estate agent will guide you throughout the process of buying the property and be present at the closing of the sale. If you have purchased property previously, you may already know a real estate agent you wish to represent you. If you do not, simply contact a local real estate agency and discuss the property you are interested in with any agent.
Fourth, you must contact whoever legally owns the real estate at that point in time. In the case of government foreclosures or any other type of defaulted mortgage, you will be able to search online in some locales or research at the courthouse of the county, parish or commonwealth in which the property is located to learn the exact point of contact or person you need to speak with. You may, however, attend a real estate auction where you'll find representatives of the interested financial institution present. Lastly, you'll need to make an offer on the property. If your offer is accepted, then you'll begin the process of purchasing your first government foreclosure. This can be a great way to start out as a real estate investor while building long term wealth.