HUD (the United States Department of Housing and Urban Development) acquires foreclosed properties from lenders that are insured through the Federal Housing Administration. Post acquisition, these properties are made available for sale to the public. It is important to note that although it is HUD that sells the foreclosed property, these are not technically HUD-owned foreclosures as HUD receives the property only after the foreclosure. That is, HUD did not complete the foreclosure, but rather was given the foreclosure. Hopefully this gives you a better understanding of the nature of foreclosures and the relationship between HUD, FHA, and mortgage lenders.
Lets now move on to how and where you would find a HUD property. There is a multitude of HUD properties for auction at any one time. The recent Global Financial Crisis has created a large increase in foreclosed homes. The way home listings get out there is by HUD contracts asset management and marketing companies. These companies are contracted not only to sell their properties, but to also maintain them as well. Management and marketing companies advertise the HUD homes by listing the properties on their sites. These sites can be found on the HUD website and there are also subcontracted real estate brokers of the management and marketing companies who specialize in HUD homes.