The HUD Audit Guide only applies to FHA insured loans. Therefore, your sample should be selected from FHA insured loans. That being said, because of CFPB and the Yellow Book I believe you also are a responsibility to test some non FHA insured loans.
For your second question, here is a copy of a our FHA Lender training that should help answer you question.
Appropriate for populations of greater > 250
Significance of Control and Inherent Risk
of Compliance Requirement Minimum Sample
0 deviations expected: Size
Very significant and higher inherent risk 60
Very significant and limited inherent risk 40
Moderately significant and higher inherent risk
Moderately significant and limited inherent risk 25
Based on the above chart, chances are 25 may not be enough for your testing.