Owner passed, property in default, but loan is a Section 502 loan

[Norman Smith]

I have lead on a property that has been empty for a year. Property appears to be in good shape, has been winterized. Finally found the owner, she has passed. Find the heir, have not been able to get in touch with him (yet). Finally tracked down the mortgage holder via the property management company. The mortgage is a USDA Section 502 Direct Loan. I will have to get with the heir to possibly swing a deal, but the 502 loan representative told me that loan only had 5 years left, BUT, the subsidy amount owed is 100,000! The properties ARV is 150,000. Has anyone dealt with a short sale via 502 programs or know anything about them? I could work a short sale through the heir, but will the loan program be willing to negotiate with that much owed in subsidy money? The other option is wait for it to go to auction, which she said will be at least another year. Even though it's been empty and in default a year.