Help! USDA loan Sub-2 questions

[Jesse Ramirez]

I have a distant cousin who has a subsidized USDA loan on a 3/2 home. The balance on the loan is 70k and the homes current value is around 90k. Her payments are adjusted each year depending on her income. She doesn't make much money so her payment is only around 500 including taxes and insurance for this year.
I'd normally pull the trigger on this in a second, but I'm unfamiliar with these types of loans.

1.Legal or illegal?
2.What are the DOS consequences?
3.Will I be required to pay subsidized portion back after I sell for a profit?

Any wisdom on the matter will be greatly appreciated.