FHA works better when buying properties that are goverment owned such as Fanny Mae, Freddy Mac and HUD. That is because if the home does not appraise, they will often lower the purchase price to match the appraisal and you get a successful closing.
When using normal FHA or 203K FHA on foreclosures owned by private lenders (WF, CHASE, BoA, etc.) if there are multiple offers yours will likely get pushed aside because they would rather work with buyers not needing to renegotiate price based on appraisal. Of course if you are the only offer made on the property they will likely take it. But i have not seen many foreclosures that are not in multiple offer situations.