There are no specific "discounts," per se, but there are significant advantages to purchasing a HUD home over your typical REO, owner occupied, and short sale properties on the market today. The first and most beneficial aspect of purchasing a HUD home today is the initial 14 day period where only "owner occupied" purchasers are allowed to bid on the property. This eliminates the competition from investors which is so prevalent in today's market. The second big advantage is that HUD has already done a thorough inspection, after which they build a repair escrow amount into the price. This money is set aside for repairs needed to meet the FHA standards for health and safety (including the ability for the purchaser to get a 5yr certification on the roof.)
The tax credit for first time home buyers is still in effect (on all purchases) through the end of November, whether you buy a HUD or not.
One advantage specific to the Denver metro area in regards to HUD properties right now is price. The HUD properties are priced from current tax assessments. Because taxes are paid "in arrears," (pay for 2008 taxes in 2009) the property values used on the most recent taxes are based off sales from mid 2007 through mid 2008. In much of Denver and surrounding suburbs those sales prices reflect the peak bottom. This is why the HUD prices appear to be so much lower than everything else in certain neighborhoods. If you're looking at a HUD property priced way below everything else in the area, it's a good idea to bid full price. The agents listing these HUD's are aware that the properties are priced under market value. If someone who intends to live in the property does not bid full price, they know that an investor (non owner occ) will.