11-05-2008 08:29 PM
Can you get an FHA mortgage if you are on an installment agreement with the IRS? Never been late on the payments, or delinquent in any way, doesn't show up on credit reports.
11-05-2008 10:42 PM
Yes you may. Since it's not a lien, all you would have to provide is a copy of the payment agreement & payment history on the tax lien. Usually has to be at least 12 months old but it's not an absolute requirement - each lender will vary slightly on that. Here is what FHA guidelines say about delinquent federal debt:
Delinquent Federal Debts. If the borrower, as revealed by public records, credit information, or HUD’s Credit Alert Interactive Voice Response System (CAIVRS), is presently delinquent on any Federal debt (e.g., VA-guaranteed mortgage, Title I loan, Federal student loan, Small Business Administration loan, delinquent Federal taxes) or has a lien, including taxes, placed against his or her property for a debt owed to the U.S., the borrower is not eligible until the delinquent account is brought current, paid, otherwise satisfied, or a satisfactory repayment plan is made between the borrower and the Federal agency owed and is verified in writing. Tax liens may remain unpaid provided the lien holder subordinates the tax lien to the FHA-insured mortgage. If any regular payments are to be made, they must be included in the qualifying ratios.
Since the IRS routinely takes a second lien position without the necessity of independent documentation, eligibility for FHA mortgage insurance will not be jeopardized by outstanding IRS tax liens remaining on the property unless the lender has information that the IRS has demanded a first-lien position.
Although eligibility for an FHA-insured mortgage may be established by performing the actions described above, the overall analysis of the creditworthiness must include consideration of a borrower's previous failure to make payments to the Federal agency in the agreed-to manner and must document its analysis of how the previous failure does not represent a risk of mortgage default.
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