In an effort to assist owner occupants in purchasing a home, Fannie Mae is offering 3.5% in closing cost assistance.  You can search for these homes on www.homepath.com , it is rare to get any assistance on the purchase of foreclosure homes, so it is a nice bonus.  However, keep in mind that it does lower the $ amount you are offering and these homes are sold through a bidding process.  Another point, these properties are open to owner occupant bids first!  Investors are only allowed to bid after 15 days.  Check out their website for more details and conditions.