Will Owner Financing Benefit the Seller (Capital Gains)

[Todd Ashley]

Hi all, 
I am in the process of writing an offer for a farm property that we would utilize as our primary residence, but that also has potential to generate multiple streams of income. I have a friendly relationship with the seller who inherited the property from his parents in 2015. I would estimate that the value of the home in 2015 would have been around $350,000 and estimate that the current value is between $600,000 and $650,000 (the increase is due to improvements and appreciation). The seller moved to the property about ten years ago to help take care of his parents and has lived their full-time sense. It is my understanding that the seller should qualify to exclude up to $250,000 of any gain from his income. 

My question: If we were to utilize seller financing with a sales price of $600,00 and down payment of $60,000, would the seller miss out on the capital gains exclusion because he is not earning at least $250,000 in the year of the sale? Also, how does the mortgage interest that he would be earning impact the benefits/drawbacks of seller financing (for the seller). Basically, I am looking for ways that owner financing might benefit the seller in this situation. Thanks!