Fort Hood, Texas...it's the largest military installation in the free world, and with it comes a large concentration of military personnel, military retirees and homebuyers using their VA entitlement to buy homes. It is reasonable to assume that a certain number of those homes bought using a VA home loan will end up being foreclosed on, and will revert back to the government.

Late night infomercials and so-called real estate investment gurus have been touting it for years: "You can buy government foreclosed homes for pennies on the dollar." But how true is it? Today we will focus on VA foreclosures in the Fort Hood (Central Texas) area then how you can purchase one of those VA owned homes as an investment or as your principal residence.

VA foreclosure homes are listed for sale with local agents by Ocwen Federal Bank FSB as an agent for VA, and are offered on a strictly as-is basis. Ocwen will usually list the property at full market value and will re-evaluate the asking price about every 30 days. When the house is listed for sale or when there is a price change, a 10-day Simultaneous Offer Period begins. All offers received during the Simultaneous Offer Period are considered to have been received simultaneously. If no offers are received, or if none of the received offers meet the minimum criteria for acceptance, the property is offered on a first come first served basis. Unfortunately, the days of getting a ridiculously low offer accepted are all but gone. In addition to trying to dispose of properties in it's inventory, the VA is attempting to minimize the loss to the government (our money) and at the same time, not destroy the resale market for other sellers.

Vendee financing is available on most VA foreclosed properties and it is ideal for many investors looking to leverage the purchase. Vendee financing is available to Veterans and non-Veterans. The down payment required ranges from zero down for owner occupants to 5% down for investor buyers (a great reason for investors to consider Vendee financing) and the interest rate is competitive (presently 6%; another great perk for the investor buyer). The rate is subject to change, so check the following website for the most up to date information: http://www.ocwencustomers.com/va_vfp.cfm. When using Vendee financing to purchase a VA foreclosed property, you are responsible to pay all of the closing costs and prepaid items, including a VA funding fee of 2.25% of the loan amount at closing. There is also a non-refundable application fee of $350.

If you are interested in buying a VA owned home, you will need to contact a local Realtor to view the property and make an offer to purchase. When choosing an agent, you will want to consider the following:

• Has the agent successfully sold VA foreclosed properties? If so, how many?
• Is he or she familiar with the process of purchasing VA foreclosed properties?
• Is the agent familiar with all of the paperwork specifically required for VA foreclosures?
• Does the agent know how Ocwen uses the "net to VA" in the contract?
• Can the agent structure your offer to get most, if not all, of your closing costs covered?
• Is the agent familiar with which closing costs are buyer's costs and which are VA's?
• Does the agent know what the disclosures mean?
• Is the agent aware of what, if any, repairs the VA will complete?
• Is the agent familiar with Vendee financing including how and when it benefits the buyer?

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