If the person is attempting to purchase a hud home as an owner occupant, are they given preference over investors?

I owned a home now which is are primary occupancy, but I like some input on my creative think with out breaking the law. 

., or any other Entity type, or just own it myself with liability insurance.What kind of programs are out there as far as lending for owner occupant properties.

There are horror stories in every occupation.

@Natalie Schanne Where are you getting the 98% occupancy #?

It reads:With occupancy rates above the long-term average, rents are still rising but the rate at which they are rising now changes: rent growth is no longer accelerating, but rather decelerating.This is a precarious time in the real estate cycle.

When Houston corrected a few years ago, class A occupancy rates and rents really got hit as $100K oil jobs fled while B/C vacancy and rents have held up pretty well.  

At my current interest rate and rent when all said and done I'll be roughly 11% cash on cash ROI (based on full occupancy after rehab).

For the sake of conversation, lets say I can only guarantee 1 year of owner occupancy.- A particular "duplex" Im looking at is actually a legal triplex, but missing a kitchen thus is being sold as a duplex.

Turn it around - hoping the current occupant does leave (one way or another), can you identify (and document) sufficient damages/problems with the unit to justify keeping the security deposit?