Maybe, maybe not.  HUD homes can be found in all areas of town, in varying price ranges, and in varying conditions.  Some homes are in excellent condition and can be financed with an FHA mortgage with no required repairs.   Some others are in good condition, and can be financed with an FHA mortgage with $5,000 or less in FHA required repairs.  The remainder of HUD homes on the market vary from needing simply cosmetic repairs that exceed $5,000 to needing structural repairs.

In any event, HUD will not make any repairs to the property.  HUD uses codes to help you determine the general condition of a property at first glance.  Right beside the words "FHA Financing"  in the "Listing Information" for a property, there will be either an "I", an "IE", or a "UI.

If the property code is "I", that indicates that the appraiser has determined that the property can be financed FHA with no repairs.  It is FHA insured, based on an FHA appraisal that has already been done.  If a buyer purchases the property using FHA financing, no appraisal is needed.

If the property code is "IE", that indicates that the appraiser has determined that the property can be financed FHA with $5,000 or less in repairs, based on an FHA appraisal that has already been done. The FHA loan product that will be used for this type of property is the FHA 203b.  The cost of the repairs will be added in to the mortgage, or escrowed.  For escrow purposes, the amount added in will be 110% of the amount estimated by the appraiser. In other words, if the appraiser noted that the home needs $1,000 in repairs in order to be FHA insured, the amount added into the mortgage will be $1,100.

If the property code is "UI", that indicates that the property is uninsured.  These properties will need to be cash sales, or financed by some method other than FHA or FHA 203b.

On a side note, but a very BIG side note - Any HUD home that has a property code of "I" or "IE" can be purchased using FHA Financing with only $100 Down instead of the traditional 3.5% down payment.  This can save a ton on your out of pocket expenses. Please keep in mind that you will still be responsible for your initial Earnest Money Deposit.