HUD foreclosures are first offered to owner occupants during the Exclusive Listing Period. Once this period has expired the property is offered to all investors. A buyer who purchases a home during the exclusive period is required to fill out a HUD form 9548D, Individual Owner-Occupant Certification. Fannie Mae handles their foreclosures in much the same way as HUD. Owner occupants are required to live in the home for a period of at least one year as their primary residence. There are unscrupulous investors out there who break this rule. They lie on loan applications so they can buy homes at a cheaper interest rate than investors are charged. This is mortgage fraud and punishable by both fine and imprisonment. There can also be penalties for your Realtor if they know what is happening and assist you.