The feds also repo homes, and this can be a good deal. Back when I got my first home, the deal was---they restore the house to plain vanilla, new paint, carpet cleaned.
They set a price on it.
They hold a 'bidding' in which you pay down about a hundred dollars [this was in 1973] and prove you can get a mortgage....and then hold a 'drawing' of all the names in the pot for that particular house.. If you 'win,' you have to take over the mortgage, and have to have your bank/mortgage co. ready to get behind you on this, same as buying any other house. But there's no down payment: I started out on a 14,000 dollar house, with payments of 150.00 a month, and sold it 10 years later for 50000. Unfortunately this was the last bright real estate deal I made: I broke even on the next house I traded for, and lost everything I'd gained on the third, a fixer-upper that turned out to be the money pit.
What a time to be remembering that---I'm going to look at a house to buy tomorrow, first time in 6 years.
Did I mention that gunfire was a regular feature in the neighborhood I lived in, next to a cop and across the street from a many-times-convicted felon? It was interesting. The key was---I bet that neighborhood was upward bound, and I won. The neighborhood formed an association and improved. You want to buy the least expensive house in a neighborhood that's upwardly motivated...not the most expensive, in a neighborhood that's shaky.
I just can't afford that yet. 
