You you submit a offer for a HUD owned property you have to designated it as a owner occupied or investment property. The agent that you are work with can be subject to legal action if they submit your offer fraudgently. This could impact the broker from being able to submit future offers to HUD. The other way HUD can tell is based on the type of financing you get for the property.
The others are right on the owner vs investor... you sign saying which you are and are telling the Federal Government... so, I would be honest...
On the back up bid... they could call days or weeks later if the previous deal falls apart. I would not hold my breath past the first 48 hrs but never know.
Hope that helps... buying a HUD can be a great deal but also can be more frustrating and have many different issues to deal with over a "regular" home purchase... I hope you are working with an agent that is experienced in helping home buyers purchase HUD homes?
HUD may never know. BUT if and when they find out, you would them be facing Fedral charges. One of the addendums you will sign many times states that you are a owner occupant and answer under penalty of law if you lie. It then becomes a Federal Crime.
Really it does not matter how they know, just the penalty.