Fifty-five-year-old Eugene McReath of Panama City owns Southern Construction and Investments, a company that buys, renovates and sells houses for profit.
Many of the houses that McReath sold were financed with HUD loans, according to the indictment. McReath is accused of paying his buyers' down payments to fulfill his no money down advertisement, then falsely telling HUD that the down payments came from relatives of the home buyers.
Prosecutors say McReath lied to HUD to get around the department's policy of not insuring home loans when a seller makes a down payment.
McReath's indictment followed company president Jason Glenn LeSueur and three Southern Construction agents pleading guilty in the scheme.
Prosecutors say a sixth defendant; Richard Coley, a mortgage broker who also participated in defrauding HUD, is scheduled to enter a guilty plea to a conspiracy charge this month.