I am working with a client right now with the same situation like yours. He is interested in buying a foreclosure that needs repair which lists for $15,000. We talked to the lender, the best way to do is getting a investment loan, which interest rate is higher. Live there for about an year, do the repairs and make it to good living condition, then get refinance for regular mortgage loan.
Talk to a good lender, they will explain the reasons to you why these houses can't get regular mortgage finance. I am not an expert in mortgage, but I want to share the story with you what your option can be.