HELP! I'm FEDERAL TAX payments on installment agreement

[Anonymous]

We are scheduled to close on May7, 2015

I got my underwriting docs last night and saw the TAX paper work or request for transcripts.

Both my husband and I are making monthly payments to the IRS for taxes less than $8,000 total. 

We have no leins, our credit bureaus are flawless. No tax bills reported on them

Do we have to pay the IRS bill off before we can CLOSE?

Home loans will be government USDA Rual Development Loan (no money down). If we have to pay them back, can it be a condition of settlement and pay them off at closing?

HELP US PLEASE!!! All advise appreciated. Nervous wreck, not sleeping

[StartingOver10]

Contact your LO. Did you tell them you are making these payments as they have to be included in your DTI.

[Anonymous]

I am in touch with him now. Just wanted to know if anyone has had this experience?

Our DTI is 1% shy of having to be an FHA loan. We were really hoping for the USDA $0 down.

Thanks for your and all other responses!

[Anonymous]

This will be our situation soon too. We're waiting on our Certificate of Eligibility for a USDA Direct loan & owe the IRS. We have an installment agreement for 2012 & 2013-- when I finally got through to the IRS yesterday to add 2014 to the agreement, the rep told me that the IRS won't begin working on the accounts that owe money until around mid-May, so transcript requests will be delayed until at least then, possibly the beginning of June. He said to just keep making payments (he told me the new amount to pay) & that the proof of payments may help the loan officer determine the DTI, but I'm sure the USDA will want to see proof that the IRS has accepted the new installment amount. Best of luck to you with your situation & please come back to update us when you hear something.

[DaveInAZ]

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@Anonymous wrote:

I am in touch with him now. Just wanted to know if anyone has had this experience?

Our DTI is 1% shy of having to be an FHA loan. We were really hoping for the USDA $0 down.

Thanks for your and all other responses!

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I don't have any experience with owing taxes, the one outfit I never take any chances with is the IRS. But I am in the midst of getting pre-approval for a USDA Direct loan. I thought I remembered something about that you can't owe the government any debt, but in checking the Underwriting guide for a USDA Guaranteed loan it says the applicant must not have "Outstanding tax liens or delinquent federal debt with no payment arrangements". Since you have a payment arrangment you should be OK, but your tax payments will have to included in your DTI calculation.

[Anonymous]

Just finished speaking with the lender. He is certain that I should be paying this off because my DTI is a "hair" to close to be considered for USDA as it is.

He also advised that I wait to her back from him and his team. They are going to submit and see what comes back from USDA as requirements for settlement.

I've asked him to put in the deal that "as a condition of settlement," the tax bill would be paid off.

[Anonymous]

I have an update that might give others hope! As you can see above, I spoke with the IRS to set up an installment agreement on March 19th. I was told to not expect to be processed until mid-May, but on April 14th, a letter came with confirmation that our installment had been accepted! We happened to go under contract for a house that same day, so the timing was phenomenal! Now I'm positive we'll have plenty of time for the transcripts to update before our closing on June 15th. Whew! That was our last (known) hurdle! 

[QueenBeeOC]

We are in a similar situation, but I don't have a payment plan yet! We are scheduled to close on May 7th as well.

did your LO request that set that up? eeeek, I think we may have to!

[Anonymous]

We haven't been asked for 2014's taxes or any transcripts yet, but I would have driven myself crazy with 'what-ifs' had I not set everything straight. Please come back & let us know what happens, QueenBeeOC.

[Anonymous]

Yes!!!!! You absolutely MUST have that in place! If they ask for it, require it and you don't have......closing won't happen. You can try to set up the plan online. They do give you that option. Do it ASAP! I pay $120 a month.