How To Buy A VA Foreclosure Home

Few people know the number one best-kept secret of buying foreclosure homes: it is possible to purchase a foreclosure home with no money down. Even real estate agents often don’t understand how to get their homebuyers into a foreclosure home with zero money down. These easy tactics will show you how.

·    #1 Little Known Fact About VA Foreclosure Homes - You do not have to be a veteran to buy a VA foreclosure home or to have the VA guarantee the financing on the foreclosure home.
·    #2 Little Known Fact About VA Foreclosure Homes - You can buy a foreclosure home from the VA and receive a free charitable contribution from the Ameridream Foundation for your payment regardless of your financial status.

Understanding VA Foreclosures

Homes designated as VA foreclosures—also known as Veteran’s Administration foreclosures—were last purchased with a Veteran’s home loan. This means that the past purchaser was a Veteran of one of the branches of the United States Military and that the previous mortgage was made possible by the Federal Government which guaranteed the home loan. By guaranteeing the home loan, the Department of Veterans Affairs agreed to repay the mortgage lender for all money lost by the lender in the event the home was foreclosed on. This situation benefits the mortgage lender greatly, as their investment in the home is 100% guaranteed. The Federal Government protects itself by charging each buyer of a VA mortgage a funding fee. The funding fee is a percentage of the mortgage amount and is helpful in several ways.

The funding fee enables the Veterans Administration to allow the Veteran to purchase a home with no money down. By purchasing a VA foreclosure home from the list of Veterans Administration foreclosures on HudIndex, you can proceed with the loan as though you are a Veteran and purchase many of these foreclosure homes for sale with no money down and without mortgage insurance.

Term Offer vs. Cash Offer

A VA foreclosure home provides for two separate ways to write an offer:

• Term Offer for a VA Foreclosure Home

When writing a term offer for a VA foreclosure home, the homebuyer is asking the VA to hold financing on the foreclosure home. This provides an opportunity to buy the foreclosure home with no money down; however, there are still closing costs to contend with. Closing costs can run anywhere from one to six percent of the purchase price of the home. Ask your local real estate agent or loan officer for more information.

• Cash Offer for a VA Foreclosure Home

When writing a cash offer for a VA foreclosure home, the homebuyer is not actually offering to pay cash, but is rather not requesting that the VA hold the financing on the foreclosure home. The VA is even more flexible with pricing and closing costs with a cash offer, as they will not be responsible for the mortgage.
Write the cash offer for the foreclosure home and ask for the maximum contribution required towards closing costs (consult with your local real estate agent). As soon as the contract is accepted, contact the Ameridream Foundation. The Ameridream Foundation will give you the closing costs as a free contribution. Learn more about the Ameridream Foundation (www.ameridream.org) and buy your foreclosure home from the VA with no money down.