As I understand it, and have always practiced, HUD does not regulate finishes, as long as they do not affect the health or safety of the structure. Now marketability.........that is a whole 'nother story.
I had one a few years ago like that. A Jim Walter house with owner "finished" interior. OSB all over every interior surface. There was nothing "wrong" with it, it was in good shape, unpainted as ugly as hell. Obviously no similar comps so estimated 25% functional obsolescence due to sheer ugliness; excuse me, "lack of market acceptance".