Q:   How do you find government-repossessed homes? 
A:   The U.S. Department of Housing and Urban Development acquires properties from lenders who foreclose on mortgages insured by HUD.  These properties are     available for sale to both homeowner-occupants and investors.  You can only purchase HUD-owned properties through a licensed real estate broker. HUD will pay the        broker's commission up to 5 percent of the sales price.

Down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from the conventional market's 3 to 20 percent.

One caution. HUD homes are sold "as is," meaning limited repairs may have been made but no structural or mechanical warranties are implied.

Q:   Can I get a HUD home for as little as $100 down? 
A:   If you are strapped for cash and looking for a bargain, you may be able to buy a foreclosure property acquired by the U.S. Department of Housing and Urban          Development for as little as $100 down.  With HUD foreclosures, down payments vary depending on whether the property is eligible for FHA insurance.  If not, payments range from 5 to 20 percent.  But when the property is FHA-insured, the down payment can go much lower.

Each offer must be accompanied by an "earnest money" deposit equal to 5 percent of the bid price, not to exceed $2,000 but not less than $500.

The U.S. Department of Veterans Affairs also offers foreclosure properties which can be purchased directly from the VA often well below market value and with a down   payment amount as low as 2 percent for owner-occupants.  Investors may be required to pay up to 10 percent of the purchase price as a down payment.  This is because the VA guarantees home loans and often ends up owning the property if the veteran        defaults.
 
Q:   Where can you find foreclosures? 
A:  In most states, a foreclosure notice must be published in the legal notices        section of a local newspaper where the property is located or in the nearest city.  Also, foreclosure notices are usually posted on the property itself and somewhere in the city where the sale is to take place.

When a homeowner is late on three payments, the bank will record a notice of default against the property.  When the owner fails to pay up, a trustee sale is held, and the property is sold to the highest bidder.  The financial institution that has initiated
foreclosure proceedings usually will set the bid price at the loan amount.

Despite these seemingly straightforward rules, buying foreclosures is not easy as it may sound.  Sophisticated investors use the technique so novices may find themselves among stiff competition.

Q:   Where can you find foreclosed HUD homes? 
A:   The U.S. Department of Housing and Urban Development acquires properties from lenders who foreclose on mortgages insured by HUD.  These properties are     available for sale to both homeowner-occupants and investors.   You can only buy HUD-owned properties through a licensed real estate broker, whose commission will be paid by HUD.

Q:   Do you have to buy HUD homes through a realty agent? 
A:   You can only purchase a U.S. Department of Housing and Urban                  Development property through a licensed real estate broker.  HUD will pay the        broker's commission up to 5 percent of the sales price.