Reminder about unpaid taxes stopping loan approvals

Just a reminder for buyers as a few people have recently been held up from buying their dream home due to issues with unpaid federal taxes and getting FHA loans approved:


Borrowers with delinquent Federal Tax Debt are ineligible for FHA financing unless:
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     I.Borrower has entered a repayment agreement with the federal agency owed to make regular monthly payments on the debt and the Borrower has made timely payments for at least three months of scheduled payments. The Borrower cannot prepay scheduled payments to meet the required minimum of three months’ payments.
   
     II.Mortgagee must include the payment amounts in the agreement in the calculation of the borrower’s debt to income ratio.

     III. If the delinquent taxes owed are in lien status, the Mortgagee must ensure that the mortgaged property will be free and clear of all liens, except the insured Mortgage and any secondary liens permitted by FHA. The lienholder will need to subordinate to our FHA-insured mortgage. 

If you have any questions or concerns about this issue, any home financing issues, or any real estate questions, please feel welcome to get in contact with me via phone or email. 


*Delinquent Federal Tax Debt refers to tax liens or prior years taxes owed. Prior years taxes owed would be any year prior to the current tax year filing and is not yet a lien.
*This topic was prepared by our friends at Alterra Home Loans.