Purchasing a home owned by HUD also gives you special programs with $100 down and allows repair escrow to homes that need a little work. Most lenders don't allow repair escrow. All homes are FHA approved and some are approved for fha renovation loans.
HUD insures lenders against mortgage losses through foreclosure originatiing with an FHA loan. FHA loans allow a minimum down payment of 3.5%. They are normally utilized by first time buyers due to the low initial buy in cost.
Basically HUD helps buyers get into homes with as little as 3.5% down. There programs also allow higher debt ratios and limited credit history. As little as one year of credit history. FHA program helps many home buyers