FHA and back taxes owed?

Anonymous · ‎12-06-2008

I've already been pre-approved for an FHA loan. My wife and I both have middle scores in the mid 600s. I have old federal tax debts that has never went into a lien, and we are currently in an installment agreement about 5 months in. I plan to close around early Feb 09. Do I have anything to be concerned about as far as the tax debt and going FHA?

Anonymous · ‎12-06-2008

Did you tell the bank about the installment loan and have you been making the payments on time? If so, you should be fine, I had the same issue and closed a couple of months ago with an FHA loan. If you didn't tell the bank about the installment loan, you'll want to make sure you correct that ASAP.

Message Edited by SuzieQuzie on 12-06-2008 08:05 PM

Anonymous · ‎12-06-2008

The payments are current and I have never been late. I told L.O. about this snag and he said he didn't think there should be a problem but thought I would get opinions from this forum also. thanks for your replys!!

Anonymous · ‎12-07-2008

Did you include the payment so that it's part of your DTI ratio? My loan officer mentioned that some people think that because the IRS installment loan isn't on their credit report they don't have to report it because "no one will know". That's definitely not true with a FHA loan. As long as that payment is included as part of the debts on your paperwork, you should just fine.

Anonymous · ‎12-07-2008

+1.

Few things will send an underwriter to the shred pile faster than discovering a large undeclared payment not counted in DTI.

Anonymous · ‎12-07-2008

I would like to thank everyone for their replies, as this info has been extremely helpful. Our main concern is that we were only five months into the installment agreement after reading in one post that FHA require (or prefer) at least 12 months.