I agree with John and Sam, however when looking into the special loans that Sam is talking about PLEASE have you lender make sure the funds are available. If you get into a contract and the due diligence periods run out and the financing falls apart you could loose your earnest money.
Some banks that are selling the foreclosures also charge $100-$150 a day for each day past the set closing date, that a home doesn't close.
Make sure your Realtor and Lender are working for you.

Yes,

HUD Homes are a good option. Also, any home that is in decent condition is a good option for FHA financing. The better the condition of the home, the easier it is to use FHA for financing. You can search for HUD homes by going http://www.hudpemco.com and let me know which homes you like best.

I just closed yesterday on an FHA loan on a REO. It was very easy and we closed within 40 days.

Yes, there are several ways to finance foreclosures with FHA loans. One method is if the foreclosure is a HUD-owned property, HUD currently offers the $100 down program in Georgia and some other states and will allow you to finance HUD-listed properties with repairs under $5,000. For other non-HUD-owned properties and HUD properties with repairs over $5,000, FHA offers the 203K renovation loan program, which basically follows FHA guidelines and allows you to renovate the home after closing with an approved contractor. Under that method, renovation funds are placed in escrow until the repairs are completed. Please let me know if you would like more information.

Yes. My son and his wife just bought a foreclosed home using an FHA Loan, I also have one other home under contract with an FHA loan. Please let me know how I can help you find a foreclosed home using an FHA Loan. (4780954-2045