I stand corrected! Looks like HUD cleaned out the house and yard but did not rehab the house. It needs extensive repairs and was uninsurable. That explains why HUD listed it for $120,000 and sold it for that price. It needed more than updating to the buyer's taste.
Here's the video of what the house looked like when HUD put it on the market dated April 1, 2020.
One room (living room, I think) has 3 patches to the drywall. The baseboard radiator cover is missing in one room. The flooring in the kitchen has a huge gouge in front of the fridge.
The listing advises that repairs will exceed $10,000. It cautions that carbon monoxide detectors are required by state law (which did not apply bc a federal agency was selling it). Here's more of the description accompanying the youtube video.
Repairs may include but not limited to structure, electrical, roof, HVAC, and plumbing; Inspection recommended, Defective paint surfaces, Roof is near the end of its useful life, inspection is recommended, Per PCR, plumbing system does not hold pressure, Repair bathroom sink and replace flooring, Needed repairs: kitchen countertop; doors; windows; trims and floor covering, Repair-secure electrical wires, Buyer is responsible for determining property’s water source and sanitary system or sanitary sewer public provider. HUD Case# 341-152370. Property is sold as is. Uninsurable. Lead Based Paint addendum required.
While it is possible that the contractors who cleaned out the house would have noticed something amiss, they would have been in and out for a short time. I was assuming based on my experience with HUD houses that were rehabbed that several workers would have been there full-time for months going over everything.