2008 Taxes, Payment Plan

[Anonymous]

My wife and are are applying for an FHA loan, I owe under $500 on 2008 Taxes and have a payment agreement, will this need to be paid in full prior to closing and is this considered back Taxes ?

[Anonymous]

yep, it will have to be paid.  Payment plans have to be in effect for 12 months.

ALso, an UW s going to be leary of lending money to someone who can not pay off that small of a tax payment prior to close.

[Anonymous]

The reason I ask is because we have already started the process and the check has been sent to the IRS but I am not sure it it will clear before the underwriter looks it up ... 

[Anonymous]

UW will request copies from IRS of last 2 year tax returns.

They will see balance owed

They will require it be paid once they see it.

If there is already money in transit, they will probably not OK closing unitl that money has cleared your IRS account which can at times take awhile.