Government foreclosures like foreclosed USDA properties are basically homes whose mortgages were insured by government agencies like the Department of Housing and Urban Development, the Veterans Affairs Office, the Internal Revenue Service and the the Department of Agriculture to name a few. When owners renege on this type of mortgage or if they fail to settle their taxes in time, the government agency that secured the loan takes back the property and resells them to the market.
Foreclosed USDA properties are repossessed homes that used to be a part of rural enhancement programs. It is not all farm homes though, there is a good mix of family homes and mixed-use properties in there. These homes are sold at auctions and require that buyers be represented by a real estate broker or agent that is accredited by this particular government agency.
Apart from the real estate agent requirement, there are a handful of conditions that need to be met before a buyer can participate in a USDA auction. First you need to be able to prove that you are capable of taking out a housing loan. The best way to do this is to get pre-approved for a home loan by any bank or lending company. This will require a show of personal documents indicating that you are gainfully employed and therefore able to pay your mortgages.
What to Watch Out For
You do not want to leave any stone unturned when purchasing foreclosed USDA properties. Never forgo the research and find out everything you can about the property. You can drive up to the place and check out the exterior as well as speak to people in the neighborhood to get unique insights about the place and its surroundings. You should also conduct a title search to see if the hidden taxes if any is something you can absorb. Work closely with your agent to ensure that the purchase goes smoothly.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.