A borrower can often qualify with an IRS installment agreement; tax liens are treated more strictly, and rules differ by agency. Fannie Mae and Freddie Mac accept an approved or pending agreement, generally counting its payment in DTI, if there is no indication of a filed Notice of Federal Tax Lien; Fannie Mae requires other delinquent taxes and tax liens to be paid off by closing. FHA treats delinquent federal tax debt as disqualifying but lets tax liens stay unpaid under a valid repayment agreement with at least three months of timely payments. VA has no IRS-specific rule; a borrower delinquent on a federal debt is not a satisfactory credit risk until it is brought current or a satisfactory arrangement is made.
Fannie Mae (conventional)
- An approved or pending IRS installment agreement for delinquent federal income taxes can stay in place when there is no indication that a Notice of Federal Tax Lien has been filed in the county of the subject property. Fannie Mae B3-6-05
- The lender needs the approved agreement showing the monthly payment and total due plus evidence the borrower is current, or, for a pending agreement, the application showing the proposed terms. Fannie Mae B3-6-05
- Unless the amount owed is paid in full, the monthly payment must be included in DTI; if any condition is not met, the balance due under the agreement must be paid off. Fannie Mae B3-6-05
- An approved agreement's payment can be excluded if it meets the guide's Debts Paid by Others or Installment Debt terms. Fannie Mae B3-6-05
- Other delinquent taxes, judgments and tax liens must be paid off at or before closing, and an approved IRS agreement must be paid in full if there is any indication of a recorded Notice of Federal Tax Lien in the subject property's county. Fannie Mae B3-6-07
Freddie Mac (conventional)
- For an IRS-approved agreement, the file must contain the agreement and show the borrower is not past due; the monthly payment is included in DTI if more than 10 months of payments remain. Freddie Mac 5401.2
- For an agreement pending IRS approval, the greater of the requested monthly payment or the taxes owed divided by 72 must be included in DTI. Freddie Mac 5401.2
- There must be no indication, and the seller must have no knowledge, that the IRS has filed a Notice of Federal Tax Lien for the taxes owed. Freddie Mac 5401.2
- In manual underwriting, several public-record occurrences of derogatory credit, including judgments and tax liens, must always be considered significant. Freddie Mac 5202.1
FHA
- Borrowers with delinquent federal tax debt are ineligible. Tax liens may remain unpaid if the borrower has a valid repayment agreement with the federal agency and has made timely payments for at least three months, which cannot be prepaid to meet the minimum. FHA 4000.1 II.A.1.b.ii
- The agreement's payment must be included in DTI, and the file must include IRS documentation of the repayment agreement and verification of payments made. FHA 4000.1 II.A.1.b.ii
- Under the valid first lien rules, a non-federal tax lien left unpaid under such an agreement must be subordinated to the FHA-insured mortgage. FHA 4000.1 II.A.1.b.ii
VA
- A borrower presently delinquent or in default on any debt to the federal government is not a satisfactory credit risk until the account is brought current or a satisfactory arrangement is made with the federal agency. VA Pamphlet 26-7, Ch. 4 Topic 6
- In the handbook's example of taxes unpaid for several years, a payment plan set up after the CAIVRS finding has been addressed may not show a satisfactory arrangement. VA Pamphlet 26-7, Ch. 4 Topic 6
- A borrower with a judgment lien against the property for a debt owed to the Government is not a satisfactory credit risk until the judgment is paid or otherwise satisfied. VA Pamphlet 26-7, Ch. 4 Topic 6
The VA Lender's Handbook has no section specific to IRS agreements or tax liens; the VA rules above cover federal debts.
Sources
- Fannie Mae Selling Guide, September 2, 2026 version: B3-6-05, Monthly Debt Obligations (Federal Income Tax Installment Agreements) (p. 518); B3-6-07, Debts Paid Off At or Prior to Closing (Collections, Charge-Offs of Non-Mortgage Accounts, Judgments, and Liens) (p. 524)
- Freddie Mac Single-Family Seller/Servicer Guide, September 16, 2026 version: 5401.2(b), Liabilities included in the monthly DTI ratio: (ii) Internal Revenue Service (IRS) installment agreements (p. 5401-8, 5401-9); 5202.1(d), Adverse or derogatory credit information (p. 5202-12)
- FHA Single Family Housing Policy Handbook 4000.1, August 12, 2026 version: II.A.1.b.ii, Borrower Eligibility: (12) Delinquent Federal Tax Debt (p. 155); II.A.1.b.ii, Borrower Eligibility: (13) Valid First Liens, (b) Tax Liens (p. 156)
- VA Lender's Handbook (VA Pamphlet 26-7), August 12, 2026 version: Chapter 4, Topic 6: Debts Owed to the Federal Government, e. Treatment of Federal Debts (PDF p. 102)
Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.
