I purchased a HUD home with an FHA 203k loan in 2016 as my first flip. There are advantages and disadvantages, but be prepared to be very frustrated, and SHOP FOR A LENDER. My lender had no clue what they were doing and took 116 days to close, which caused me to pay 3 HUD extension fees.
A few important notes:
-They hold a 15% contingency, so your "real" rehab budget is $29,750. Your budget must be less and they release the remaining funds on completion.
-You must work with a contractor. Your contractor must agree to their terms.
-50% down and 50% on completion inspection. Not favorable to most contractors.
-You must do and detail every tiny bit of work that whatever appraisal you get details. Example: If your scope of work says "Tear off and replace roof" and your appraisals states there is a shingle missing, you must also update your scope of work to show "replace missing shingle referenced in photo XXX".
-You will revise every document 30 times. At the beginning of every month, be ready to send your statements in.
Summary: This loan was a huge headache, BUT it allowed me to buy a home at 22 years old with 3.5% down that I now have $90k of equity in even after a cash out refi. The numbers worked and it ended up being a great vehicle to get me into an 80% position and a brand new house. Do your homework when finding a lender though, and just be prepared for what lies ahead.