HUD Foreclosure- Owner occupancy rules

[James Greenwood]

A friend of mine just had an offer accepted on a HUD foreclosure in AR.

On the email that they got from HUD it states things about having intentions of using the house as a primary residence for 12 months, can’t sell it before 12 months etc. 

They plan to have it as a place to live part time between CA and AR but it needs work and will most likely take more than 12 months to get it ready to live in. Their intent is to live in it part time but the timeline for when they can start using it is undetermined.
I'm assuming that HUD is just doing their best to keep these away from investors/flippers.

The worry: 
The language in the email from HUD references fines of up to $250,000 and/or imprisonment if not used as a primary for the first 12 months. 

Does anyone have experience or knowledge with this? 
We would love to have some guidance as to whether this is something that they should stay away from or if they are ok to proceed. 

Any help is much appreciated!!! 

They need to sign the contract within 24 hrs or they lose their earnest money. 

Thanks