There are not really any traps, just things that might not have occurred to you.
You probably already know that you can generally obtain conventional financing for 80% of the value of your home.
That is the usual loan-to-value ratio when you do not have Federal Housing Administration (FHA) insurance, a Veterans Administration (VA) guarantee, or private mortgage insurance. The word value is a little misleading, though. Typical loan commitments offer to finance 80% of the value or 80% of the purchase price, whichever is less.
You might think that you can buy a $100,000 home for $80,000 at foreclosure and obtain 100% financing. This would be a reasonable assumption if you thought you could borrow 80% of the value, $100,000, which works out to $80,000. Instead, you will be able to borrow only 80% of the actual purchase price, which amounts to $64,000. If your goals depend on being able to obtain 100% financing because of buying foreclosure properties at bargain prices, you may find that extremely difficult to do.
If this is your situation, you may need to investigate FHA insurance, VA guarantees, or private mortgage insurance. All three will increase your fees or your monthly payments.
The HUD Good Neighbor Next Door program might also be for you if you have no down payment money. The purchase price of those homes is actually the full listed price. That listed price determines the purchase price for purposes of obtaining 80% financing.
The nice thing is, the HUD will accept 50% of the list price as the initial payment, and you sign what is called a silent second mortgage to HUD for the other 50%. After three years, if you have met all the requirements, then HUD forgives the second mortgage.