The Department of Veterans Affairs administers home loan guarantee programs for veterans.
When these loans go into default, Veterans Affairs sometimes acquires the homes through foreclosure.
The homes are sold through a competitive bidding process.
Bids are usually open for one week.
Bids must be submitted through an agent registered with VA.
A $500 earnest money deposit must accompany the bid. This deposit is only returned if the VA rejects the bid or financing request. 1
The minimum bid is the "fair market value" as determined by VA.
Bargain prices on extreme "fixer-upper" cases do exist, but, since the minimum bid is "fair market value," don't expect to steal a home.
The big advantage in a VA repo is the EXCELLENT financing terms VA offers.
Interest rates are competitive, down payments are very low and even small loans can carry a 30-year term.
Homes are sold "as is," no warranties. They usually require some repair and some require major rehabilitation.
HUD Repos
The Department of Housing and Urban Development has discontinued it's program for sale of repossessed homes. The new program for disposing of homes acquired through foreclosure of FHA insured properties has not yet been fully implemented, but essentially consists of turning the properties over to several regional corporations for resale. As soon as information is available to the real estate community on Joplin area FHA foreclosure resales, I will post it here. In the meanwhile, the VA properties are still available through the (frankly, superior) VA program.
1 -- By law, I must present your offer even if you refuse to make a deposit, but both VA & HUD have a policy of automatically rejecting any bid without this deposit without exception, which any seller is entitled to do.