May be look into tax exempt securities such as municipal bonds or series EE. 

Yes it is a Multi Family house Hack I live in the main part of the house they live in a attached apartment. check your city or state laws  but federally if your owner occupying you are exempt from federal fair housing laws. 

Since I left on orders I kept homestead exemption, and exempted you from having to stay in the house for 3 years.  

You don't really want to be in the boat of managing one SFR from a thousand miles away (it may different if you had a few), and then have your section 121 exemption "expire", and have to pay taxes on the gain.

It sounds like you are saying I have to pay capital gains, and the only way I see to avoid it is to move back in for 2 years before selling to qualify for the primary residence exemption.

@Adam Widder I am pretty sure once you live in it for 2 years then there is an exemption of 100% if you sell.

You can ask for an exemption but not likely to get it.

I know there is like a $14,000 gift tax, but if it is a loan does that make it exempt?

you may want to check on the validity of your note.. if its owner occ.. maybe it was a seller carry back that was exempt.. but somewhere in the back of my head I am thinking balloon payments for owner occ became illegal. 

Assuming this was their personal residence and All cap gain is exempt under section 121, and was never rented (no depreciation recapture.)....1) return of basis-no tax2) cap gain-cap gain tax if not exempt3) interest-taxed as his ordinary income tax rate (no ss/med)