HUD homes are generally priced at appraisal and most of the good one's sell by 2nd weekend at or above asking price. I think best to come in slightly above asking price provided your agent did a buyer CMA for you in that development.
Your local Realtor should be able to give you the best advice on this answer. They will do a market analysis of all homes under agreement and sold in the area you wish to purchase the hud home in. Once the analysis is complete, they will suggest the best price to offer.