HUD is actually not a rental assistance program. The Department of Housing and Urban Development dolls out funding to local PHA's who in turn run rental assistance programs like Section 8 and Public housing. The Section 8 application process is always free.
What is referred to as a HUD home, is a home that is owned by the U.S. Department of Housing and Urban Development.
Long before a home becomes the property of HUD, it typically was owned by a regular homeowner who'd made this purchase with an FHA loan. FHA loans are easier to qualify for than a conventional loan because they require a low down payment (as little as 3.5%). However, if the owner ends up unable to pay his monthly mortgage, he ends up in foreclosure, which means the home goes to HUD, which then must figure out how to unload this home and make back its money.
The process of buying a HUD home varies from a conventional sale, but generally speaking, most people will go about it the same way as they would buying any other home. First, financing must be acquired. You can learn more about this process with the Section 8 and Subsidized Housing Online Packet.
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