Selling personal house purchased with USDA Loan ?

Question

I purchased my personal resident's using a USDA loan about a year and a half ago. I have entertained the thought of selling this house and purchasing a four-plex using an FHA loan and living there four at least a year to save on living expenses . And obviously own the four-plex at  a good rate.
     I have been looking in my contract of sell for my personal house to see if there is any penalties for selling . Is anybody aware of any penalties for selling USDA loan since it is 100% financed ? I think that there is no capitol gains tax if lived in for two years.
 
 I will mention I live in central OR and the same floor plan  as my personal house that I purchased 1-1/2 years ago just sold last month for $40,000 more than what I paid for mine. It seems like that is really fast growth for an area to have. After 4yrs of almost zero new construction . Everyone is building SFH again . Which worries me that it is to fast to soon. The Multi-Family units have not increased at the same rate which seems like it would be a good to purchase and live in one.

Thoughts ?

Winston Risser · Answer

Thanks Bill,

I appreciate the reply . Closing cost were bundled with the loan but the interest were standard at the time . I will check into it more.

Bill Gulley · Answer

There are no prepayment penalties with USDA, just make sure it is not a part of an economic development bond/loan with your state as there are some programs that require occupany periods for the forgiveness of loan expenses, interest and other costs over time, like 3 to 5 years, but you can still sell, just may have those expenses. A good indicator that this would not apply is if you had loan expenses and no lower interest rates. Good luck! :)