FHA Loan With Tax Lien And Outstanding Judgments On Home Purchase

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This BLOG On FHA Loan With Tax Lien And Outstanding Judgments On Home Purchase Was UPDATED And PUBLISHED On August 27th, 2019

FHA Loan With Tax Lien
Gustan Cho Associates

FHA Loans are by far the most popular residential mortgage loans today.

  • FHA Loans are not just for borrowers with bad credit or low credit scores
  • The Federal Housing Administration, FHA, is a subsidiary of the United States Department of Housing and Urban Development, known by many as HUD
  • FHA’s function and role is to promote homeownership for homebuyers with less than perfect credit and low down payment
  • FHA does not to originate or fund residential loans
  • FHA’s function is to insure residential mortgage loans to approved private lenders such as banks and mortgage companies

In this article, we will cover and discuss FHA Loan With Tax Lien And Outstanding Judgments On Home Purchase.

HUD Mortgage Guidelines

what are HUD Mortgage Guidelines

In order for FHA to insure mortgage loans to lenders, lenders needs to follow strict HUD guidelines

  • If the loan package does not or did not meet FHA mortgage guidelines when it was originated and funded and the Loan goes into default, HUD will not insure the mortgage loan
  • This is why lenders are very strict in requesting proper documents
  • Lenders need to verify borrowers meets all agency mortgage lending guidelines
  • FHA has extremely generous mortgage guidelines
  • More so than conventional loans, VA Loans, and USDA Loans
  • Borrowers can qualify for FHA Loans with 3.5% down payment on a home purchase with a 580 Credit Score
  • FHA does not count medical collections and charge offs
  • Borrowers can have medical collection accounts and charged off accounts with balances and still qualify for FHA Loans

Can you qualify for FHA Loan With Tax Lien? The answer to this question is yes.

Qualifying For FHA Loan With Tax Lien

How Qualifying For FHA Loan With Tax Lien

Tax liens and judgments are probably the two worst derogatory items consumers can have on your credit report.

  • The great news is borrowers can qualify for FHA Loan With Tax Lien as long as they have a written payment agreement with the Internal Revenue Service

Borrowers with the tax lien also need to have made at least three monthly payments to the Internal Revenue Service:

  • Three months canceled checks and/or bank statements needs to be provided to the mortgage underwriter
  • Borrowers cannot prepay the full three months of tax lien payments all at once and consider that being in compliance

HUD requires that borrowers make at least three months worth of payments and need to wait three months.

Qualifying For FHA Mortgage With Outstanding Judgments

How Qualifying For FHA Mortgage With Outstanding Judgments

Same with judgment. Borrowers with judgments can qualify for a mortgage and can have the judgment paid off at or before closing.

  • Underwriters need to see seasoned funds that borrowers will use to pay the outstanding judgment at closing

Borrowers can also qualify for FHA Loans with outstanding judgments but needs to have a written payment agreement and three months of seasoned payments:

Outstanding Collections And Charged Off Accounts Do Not Have To Be Paid To Qualify For FHA Loans

What are Outstanding Collections And Charged Off Accounts Do Not Have To Be Paid To Qualify For FHA Loans

Borrowers do not have to pay off the unpaid judgment in full to qualify for an FHA Loan:

  • Borrowers can qualify for an FHA loan as long as they have a written payment agreement with the judgment creditor
  • They need to have made at least three months of payments to the judgment creditor
  • Three months of canceled checks and/or bank statements need to be provided to the mortgage underwriter
  • Cannot just enter into a written payment agreement and pay the three months worth of monthly payments all at once and qualify with judgment
  • FHA requires that borrowers have made at least three months worth of payments and three months of seasoning is required in order to qualify

Homebuyers interested in qualify for FHA Loan With Tax Lien, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Borrowers can also email us at gcho@gustancho.com. I will be able to help you. My staff and I are available 7 days a week, weekends and holidays included.

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