Hey all - found some good info I thought you'd find useful.:

From the USHUD.com Knowledge Center
[size=18]What Are VA Foreclosures?[/size]

Benefits of buying a VA foreclosure

1. No money down possibilities.
2. Instant Equity
3. No mortgage insurance ever.
4. Higher qualifying ratios.
5. VA will pay all closing costs (up to 6% in some states)

Understanding Veterans Administration Foreclosures
Homes designated as VA Foreclosures were last purchased with a Veteran's Home loan. This means that the past purchaser was a Veteran of one of the branches of the United States Military and that the previous mortgage was made possible by the Federal Government who guaranteed the loan. By guaranteeing the loan the Department of Veterans Affairs (VA) agrees to repay the Lender for all money lost by the lender in case the property is foreclosed on. It's a good deal for the Lender as their investment is 100% guaranteed. The Federal Government protects itself by charging each buyer of a VA mortgage a Funding Fee. The Funding Fee is a percentage of the mortgage amount and is helpful in several ways.

Because the Funding Fee is charged the Veterans Administration can allow the Veteran to purchase a house with no money down. By purchasing a VA foreclosure from the list of Veterans Administration foreclosures found on USHUD.com you can preceed with the loan as though you are a Veteran and buy many of these properties with no money down and without mortgage insurance.

Source: http://ushud.com/index/US/i/ushud/h/ushud/p/aboutva/pages.html