True of False: You cannot buy a home if you owe the IRS.
Oddly enough, I get this question a lot.
FALSE.
Don’t let the IRS stop you.
You can buy a home if you owe the IRS and are on a payment plan.
I had a client who owed the IRS tax money back in 2009, and it was more than she could pay in one lump sum.
So she negotiated a payment plan, and has been paying on that debt.
Now she wants to buy a home, but thought she would have to pay them off. As long as a borrower is paying on time, we can approve the loan with that monthly payment calculated into the debt ratio and do not require that it be paid in full.
Just remember that if you don’t pay your debt to the IRS they now could put a lien on the house to secure repayment.