Private lenders aren't the only institutions that have foreclosed properties to sell.
Many government-linked agencies have them, too. Here's a list of some of those agencies and the guidelines they want investors to follow:
HUD: The U.S. Department of Housing and Urban Development has thousands of foreclosures across the nation, and it is considered by many experts to be a source of great bargains. Most of the homes in HUD's portfolio were originally financed by the Federal Housing Administration (FHA), and many of the properties are in good areas.
The agency runs auction advertisements in major newspapers, including the Times' classified section, every Sunday. The ads list the address of each property for sale, a brief description, and a minimum allowable bid.
Buyers can offer all-cash, finance a deal with a conventional loan or, sometimes, qualify for a low-rate FHA loan with a small down payment.
Prospective buyers submit sealed bids, usually through a real estate agent. About a week after the advertisement appears, the bids are opened and the buyer who offered HUD the best deal gets the property. If the bid was made through a broker, HUD pays the sales commission.
Generally, only licensed agents can get on the agency's foreclosure mailing list; non-licensees must watch for ads or work with a broker who receives the list. Potential investors can find these agents by looking in the Yellow Pages and calling realty firms.
VA: The Veterans Administration is another prime source of bargains. It currently has more than 24,000 properties for sale, making the agency one of the nation's biggest landlords.
The VA usually sells its properties with the help of realtors, but auctions are occasionally held. Investors don't have to be veterans to buy a VA foreclosure, and the agency is usually willing to finance the sale with a low down payment and no fees for appraisals, title insurance and the like. Even better deals can sometimes be made when an investor can assume the previous owner's loan. More information can be obtained from local offices of the VA.
FDIC/FSLIC: The Federal Deposit Insurance Corp. and Federal Savings and Loan Insurance Corp. often wind up with foreclosures when they take over a failed bank or thrift. Most of their properties are listed with real estate agents, but some are sold by staffers in regional offices.
Both agencies prefer all-cash transactions, but they'll provide financing on properties that are unusually difficult to sell. Lists of available homes can be obtained from the FDIC's regional offices in Costa Mesa and the FSLIC's offices in downtown Los Angeles.
FNMA: The Federal National Mortgage Assn., commonly called Fannie Mae, buys home loans from lenders. When a borrower is foreclosed, the agency gets stuck with the property.
Fannie Mae sells most of its properties through realtors, and a spokesman says the homes are usually fixed up before they are marketed. Deals can be financed through conventional methods, but the agency often provides below-market financing.
Fannie Mae has a reputation for offering good bargains, in part because it has more than 9,000 properties to sell. Potential investors can get a computerized list of properties available in their area by calling the agency's toll-free hot line, 800/553-4636.