Do not do this setupIf you decide to move forward, do not live in the property. make it 100% an investment without any additional complexities. 

However, it presents challenges like time, complexity, capital tied up, and loan-to-value considerations.

Text messages can be a start, but if you ever go to court, I can tell you judges don't like text messages. 

Or alternatively go down to the local housing court, walk up to the counter and ask a clerk who a good real estate attorney is.

As far as insurance, as you probably know, it can be complex. 

This was landlords burning their building because the city had obtained a court order REQUIRING landlords to continue to support and operate money losing apartment building.  

While you don't mention what state the property is in or the amount of the missed lien you or the title insurer might be able to either put up the cash or buy a surety bond and post it with the court.

This might be due to subsidy or assistance programs where payments are deferred or not required under certain circumstances.Verify Loan Terms:Contact the lender or servicer handling the HUD loans to get a clear understanding of the terms, especially regarding interest, payments, and any special conditions tied to these loans.Consult a Real Estate AttorneyGiven the complexity of dealing with multiple HUD loans and the potential implications for your “subject to” deal, consulting a real estate attorney or a knowledgeable real estate professional is highly recommended.

Charge a one-month nonrefundable Holding Fee or Rservation Fee.Document it well, so if they try to take you to court over it, you are covered.

A little over a month ago the city shut the entire complex down and made everyone get out.