Some owners may be shocked to find out the government's role in the real estate market while the reality is the have been in the business for decades. Uncle Sam has always played an important role behind the mortgage scene. There are hundreds of private lenders consumers can get a mortgage from, and the government has helped strengthen loan opportunities because of its role in buying and guaranteeing mortgages.

As a direct result of the real estate crisis, in 2008 the government issued a conservatorship over mortgage mammoths Fannie Mae and Freddie Mac. At the conclusion of 2009, it was estimated that Freddie Mac owned $5.13 billion in property that eventually have to go back on the market. In the same time period, it was reported that elder sister Fannie Mae owned over 86,000 single-family homes with a total value of $8.5 billion.

Although those may be the most notable government branches/real estate owners, they are not the only government based property owners. The Federal Deposit Insurance Corp. Department of Housing and Urban Development (HUD), and the Veterans Affairs Department and the Agriculture Department are also in on the action.

How Did Uncle Sam End up Owning Real Estate

The government first unofficially entered the real estate market in 1938. President Franklin D. Roosevelt and Congress created Fannie Mae (AKA Federal National Mortgage Association) as a way to stimulate the economy suffering through the Great Depression. Fannie Mae was originally funded with $1 billion of government assets and was established to purchase mortgages from lenders in order to provide them with more liquid capital to get back into the business of loaning money.

The program worked incredibly well and over time, Fannie Mae got a little too big for her britches. In 1968, President Lyndon Johnson did some creative bookkeeping to remove Fannie Mae's debts from the government records. Eventually Fannie Mae became a public company. Those moves eventually lead to the birth of her younger brother, Freddie Mac (AKA Federal Home Loan Mortgage Corporation) in 1989.

The two lending juggernauts have infiltrated much of the nation's housing market. Because the organizations are publicly traded, competition within the private mortgage industry is common. It was the nature of the free market that prompted the organizations to aggressively enter and subsequently get pulverized by the subprime mortgage breakdown. As the crisis started to spread, Fannie and Freddie ended up owning properties as they backed many of the loans that ended up defaulting.

The banking industry was negatively impacted by the real estate crisis. Bank failures became fairly common during that time period and the Federal Deposit Insurance Corporation, ended up becoming property owners when the government seized the assets. Since the Veterans Affairs Department and the Agriculture Department also finance and guarantee home loans, they are part of the equation as well.

Uncle Sam Home Listings

The government has a variety of home listing sites including:

• HomePath
• Hud.gov/homes
• On the FDIC website consumers can search for Real Estate Sales

Consumers can find plenty of government properties at severely discounted prices. It is important to note that many of the homes are fixer uppers as they are sold as is.

Additionally, each agency will have different conditions including the types of mortgages homebuyers can use to finance the purchase.