They are not homes for the faint of heart. They are not McMansions. You can buy them only "as is." You can expect to do at least cosmetic fix-ups, and sometimes considerably more.

But these houses also offer huge potential benefits for first-time buyers, moderate-income move-up purchasers, and small-scale real estate investors. They are priced to sell fast, are marked down promptly when they don't -- and you can always see the full appraisal report supporting the asking price.

Equally important, these properties come with an important guarantee: If anything turns out seriously wrong that the seller failed to disclose in advance, the seller will pay to make it all right.

Who is selling these houses and where do you find them? They are the nearly 100,000 homes per year that federal agencies end up owning because of borrower defaults and foreclosures.

Now, the three big agencies that control the bulk of these properties -- the Departments of Housing and Urban Development, Veterans Affairs and Agriculture -- have joined to offer them for sale in one place online. Though not formally announced yet to consumers, the new Web site is up and running at

Like a giant Multiple Listing Service online, the HomeSales site lets you review what's available community by community, state by state. You pick the city or suburb where you're interested in buying a house and check out what's on the market at the moment.

Compared with slick private-sector real estate Internet sites, is definitely pipe-rack plain. Photographs of properties appear to be the exception rather than the rule. Virtual tours are virtually nonexistent.

But the sellers bend over backward to be consumer-friendly and minimize hype. Unlike most private sellers, the federal agencies tell you up front what problems you can anticipate.

"MOLD" shouts one listing for a house in Akron, Ohio, priced at $36,000. "This property has had previous water infiltration and mold." Some listings estimate the costs of specific repairs needed to get the house up to code, and recommend escrow amounts to be set aside in advance to make sure the repairs get done.

Other listings tell you precisely how much the property has been marked down from the original post-foreclosure asking price. A house listed in North Hollywood, Calif., for example, started at $130,000, but didn't pull in buyers quickly enough and now has been marked down to $104,000.

Joseph McCloskey, HUD's acting deputy assistant secretary for single-family housing, said government-owned properties often sell quickly because "they truly represent excellent values to the buyer." McCloskey heads HUD's asset-disposition operations and sells upward of 75,000 homes a year. Most properties go within a couple of months of listing, but in hot markets such as metropolitan Washington, they last for only days or weeks, and frequently sell for more than the asking price.

Though McCloskey's job is to sell homes on the best terms and timing for the government, he said he thinks full disclosure of information to potential buyers is even more important than squeezing out extra dollars.

"Our interest is to maximize what we disclose," McCloskey said. "Sure we want to get recovery [of the government's investment], but we will sacrifice recovery for full disclosure every time." And when problems arise with a house involving pre-existing conditions that HUD failed to disclose, "we will pay for [the repairs] after the sale," he said.

How do you proceed if you spot a property on the Web site that interests you? In most cases, the first step is to locate a local realty agent who is registered with HUD or VA to handle home sales. Thousands of agents around the country qualify and often advertise their specialty. McCloskey suggests using online yellow pages and other search tools to find an agent. Bear in mind that these agents represent both you as a potential purchaser and the government. They generally stand to earn a 5.5 percent commission on the sale.

Next step is to visit the property with the agent, scope out the neighborhood, review the disclosures and appraisal report. All bidding is done online, and bids can be submitted only by the agent. HUD homes are subject to "offer periods," beginning with offers from "owner-occupant" bidders who intend to reside in the property. Then the field is opened to all bidders, including investors.

Take a hard look at if you are in the home buying market. After all, where else do sellers try to scare you away with frank disclosures and care more about your satisfaction as a consumer than the final price they get?

Kenneth R. Harney's e-mail address is