Garnishment AND owing the IRS. Need house now

[Anonymous]

We are looking at USDA.
My mid score is 684.
Student loan: 0$ IBR, 75k @.05 = $350 a month
Car payment= $370, 19k owed
Personal loan= $425, 13k owed
Home depot= $28mmp zero interest 700 owed
Car insurance= $120
Income before commission 20k
After commission 40k, I'll hit 2 yr mark in april I've heard that they will over look my lacking 2 months with letter from my employer which is no problem.
I have only ever had one late payment and it was because somehow 2nd account for same card was opened and I paid on unused card.. they told me it would be corrected and still I see it on credit karma. Account is 12 years old as are several that I keep paid off.

Husband makes $38600 yr.
Credit is 580 mid.
Debit: spectrum $60
Car insurance $65
HOWEVER he has a percentage of his check garnished for student loans. 6k remains on that. AND he owes the IRS. we are unsure if it's in lien status. They took his refund last tax year and he owed about 1600 afterwards. Weve been trying to call all week and have yet to get thru to someone to find out. The IRS office is now by appointment only via phone and still cant get an answer.

From what I've gathered we need to pay off the IRS if its feasible or make payments for 3 consecutive months. We currently rent $650 monthly but its 816sq ft and I'm pregnant with 3rd child!! I feel like we can make it work but I dont know how to calculate in the garnishment or if the irs will count if not in lien status.

[NC_Mtg_Loaner]

Looks to me like your DTI is 35% before including any house payment which will make it tricky to borrow a lot of money using a USDA RD loan.

Do you have any money saved up or assets for reserves that you might be able to use for a down payment and an FHA loan by chance?

I know tax season is approaching so that's a good way to accumulate funds as well as gifts from grandma or grandpa if at all possible which might make the process easier as your spouse works to make payments (or to pay off) the IRS and continue building his credit so you can include him in the loan. 

[Anonymous]

Thanks for the response!
I had read the cap for us in our county was 78k so we were right there with my commissions but revisiting the usda.gov site I see its 43k to qualify. So fha it is...possibly. I have to revert my brain and erase everything I've dug up on usda and now look into fha. I know fha does 1% of student loan so I'll call and get on a fixed plan with them, have him take off small loan to pay off irs and diversify his credit and the I guess look into rehabilitation for his student loan. We have 4 boston terriers that are part of the family and 4 dogs and renting here is just unheard of. My landlord is basically a slum lord and as long as I pay him and dont burn the house down he doesn't care. I met a woman who works finding assistance with HUD yesterday and I know there is help with down payment etc. I feel so stupid for not getting on usda.gov from the gate and verifying the 78k being mid income not low.

[VALoanMaster]

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@Anonymous wrote:
Thanks for the response!
I had read the cap for us in our county was 78k so we were right there with my commissions but revisiting the usda.gov site I see its 43k to qualify. So fha it is...possibly. I have to revert my brain and erase everything I've dug up on usda and now look into fha. I know fha does 1% of student loan so I'll call and get on a fixed plan with them, have him take off small loan to pay off irs and diversify his credit and the I guess look into rehabilitation for his student loan. We have 4 boston terriers that are part of the family and 4 dogs and renting here is just unheard of. My landlord is basically a slum lord and as long as I pay him and dont burn the house down he doesn't care. I met a woman who works finding assistance with HUD yesterday and I know there is help with down payment etc. I feel so stupid for not getting on usda.gov from the gate and verifying the 78k being mid income not low.

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Hi Acopp88,

Is there a specific reason why you were looking at the USDA Direct Loan & not the USDA Guaranteed Option?

In any case, the USDA loan is a lot tougher on credit scores, credit issues & debt to income ratios than FHA so you'll probably want to FHA anyway.

A couple of potential issues in either case:

1) The 580 score: USDA has a 580 cut off but a lot of lenders will require a 640+ because you will not get an approval through the USDA Automated Underwriting System (AUS) GUS with scores under 640.

2) If the student loans that are being garnished are government backed, there is a very good chance that your husband will have a CAIVRS hit.

3) The IRS issue. If there isn't a lien, this may not be an issue. If it is a lien, your best bet would be to pay if off otherwise you'll have to get on a repayment plan & make at least 3 monthly payments to be eligible for an FHA loan.

[Anonymous]

Thank you loan master

So we are going to begin the process and see if hes on cavirs. If so were thinking just paying it off, both irs and student loans. Both are about 8k. Somewhere I read usda income limit was 78k but then I saw for our household it's like 43k and we bring about 78k so were looking at THDA and FHA. His score is at 600 now and I know when they pull credit it's going to drop. I have searched on here and google for information on thda and I cant seem to find much info. Were in Tennessee btw.

[VALoanMaster]

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@Anonymous wrote:
Thank you loan master

So we are going to begin the process and see if hes on cavirs. If so were thinking just paying it off, both irs and student loans. Both are about 8k. Somewhere I read usda income limit was 78k but then I saw for our household it's like 43k and we bring about 78k so were looking at THDA and FHA. His score is at 600 now and I know when they pull credit it's going to drop. I have searched on here and google for information on thda and I cant seem to find much info. Were in Tennessee btw.

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I think you're confused about the USDA program. There are 2 different versions if you will. You have the USDA Direct which has the lower income limit & you have the USDA Guaranteed program with a higher income limit.

For example: The county income limit on the USDA Guaranteed loan for a family of 4 in Cheatham County is $92,000 & only $64,000 for the Direct Loan.

Does that make sense?

What county are you looking in?

[Anonymous]

Yes makes sense! I went back and were were moderate income it says moderate- guaranteed loan. The loan officer we plan on working with has been referred to us on 2 different occasions, one of which is a very good friend of my husband's. I think I were going to go tomorrow and get a game plan set up and see where we stand. I'm wondering if she can run cavirs without pulling credit. My credit is at a 684 so I can take the hit if we need to get a personal loan to pay off government stuff from his end. His credit is in its infancy, everything he does it drops or raised like 80pts and drives me crazy

[Anonymous]

So we went ahead and had her pull caivrs and nothing came up so we pulled credit. Mine came up 50pts higher than what my FICO said and his was right where we expected. We shall see......

[wa3more]

Acopp, congrats on baby!  Not sure a personal loan would help and it's hard to borrow ones self out of debt. 

worst case if house is liened by IRS, you might be able to roll that into mortgage to satisfy 

good luck , you will be fine ! Some good advice on this forum 

[Anonymous]

So were approved and green light to look and make an offer! Very excited! The place weve worked with has 5 stars across the board. Our RE says every agent in this area knows as long as we do our part theres no chance of it falling thru. We start looking wednesday ))) sonhapky ti have the opportunity!