Owe $9000 in taxes for 2013 applying for a mortgage next week

[daddiggingout]

We are due to apply for a VA loan next week and our scores are in the 700s across the board.  We intend to set up a direct debit installment plan on Monday.  Does anyone know if an FHA or VA Loan will be denied for this new IRS arrangement?  We have no debt so our DTI will be solid.  

[elim]

Do they have a lien?

IME it takes some time for the IRS to accept and initiate a direct debit installment plan.

I have a 16k Fed Tax Lien

[daddiggingout]

No lien.  I had assumed that signing up with the online direct debit [lan that we would be able to provide this as proof.  The IRS transcripts had no mention of a lien.  I wonder how the announced backlog within the IRS will affect mortgage apps in the next couple of months.

[StartingOver10]

I am pretty sure the lender is going to want you to show actual payments made on the IRS installment agreement for X months (not sure of the minimum number acceptable) before you can get either a VA or FHA loan. Make sure your LO contacts the u/w at time of application to ask this question.  

Let me see if one of the others on here to address this question for you.

[daddiggingout]

Thanks for the input. I contacted a lender yesterday and she said that given the fact that it is not a lien, that simply providing proof of the installment agreement should suffice. However, I am concerned that an underwriter will not be impressed.

[Anonymous]

Urgh, this is us. I'm hoping it doesn't mess us up at all. Come back & update when you know something from the underwriter, please.

[frugalQ]

Keep in mind that the agreed upon payments will be included in your DTI calculation.

[ShanetheMortgageMan]

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@StartingOver10 wrote:

I am pretty sure the lender is going to want you to show actual payments made on the IRS installment agreement for X months (not sure of the minimum number acceptable) before you can get either a VA or FHA loan. Make sure your LO contacts the u/w at time of application to ask this question.  

Let me see if one of the others on here to address this question for you.

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This is correct.  Any owing taxes, whether it's a tax lien or not, will need to be on a repayment plan with all payments made on time in order for an underwriter to be OK with it.  While technically just 1 payment needs to be made, we are seeing more and more lenders require at least 3 months of payments are made before approval.

[Anonymous]

Shane, do you think the USDA would have the same requirements for a direct loan?

[ShanetheMortgageMan]

Yes I think they would.