HUD willing to accept lower for Owner Occupancy than Investor?

[Maurice George]

Hello BP Pros, 

I am looking at a HUD property a few days ago. This property needs very minor (less than 3K work). It is considered a upper middle class neighborhood. This property's asking price is 245K (the comp is in 260K or 270K range with some minor work). I bid 80%, I got a typical 88% counter. I also put my offer as "back up considered". However, I am blown away today that I found that this property went 183K net as "O/O." I got blew away by this. How on earth my 80% never got considered?

Here is my question: Is HUD willing to accept much lower offer for buyer as O/O?

Thanks.