Much like HUD, homes that are financed using a VA guaranteed loan and foreclosed upon due to non-payment of the loan, are acquired by the VA in order to recuperate any losses incurred from the foreclosure.
Once acquired, the VA will try to list the home for sale as soon as possible. Home are available to veterans and non-veterans, owner occupants and investors. Most importantly, VA offers financing (known as VA vendee financing) with attractive interest rates, low or no down payments, and no prepayment penalty.
Once the property is ready for market, it enters into a "Competitive Bid Period" where all bids received during this timeframe are considered as being received simultaneously by the VA.
If an acceptable bid is not received on a property during the competitive bidding period, the property is placed on the "Extended Listing" in which bids are accepted on a first-come, first-serve basis until a successful bid has been received or the extended period expires.
If no successful offer is received and the extended period has expired, the property will be withdrawn from the market, reviewed, and re-listed on a new competitive listing.
Each property that the VA offers is sold "As-Is". Each listing will have specific terms and conditions for the sale, including a minimum down payment requirement for owner occupant buyers (investors are required to put a minimum of 10% down).
The listing price for each VA home is set by VA personnel. Though there is no offer/counteroffer process for buying VA homes, VA will consider reasonable offers below the list price. However, the VA reserves the right to accept, refuse, reject, or waive any irregularity in an offer.
Most importantly, the VA will not warrant or guarantee the home or be responsible for any undisclosed or hidden defects on the properties offered for sale.
