TIP OF THE DAY- FEDERAL TAX INSTALLMENTS
TIP OF THE DAY- Federal Tax Installments
Fannie/Freddie: We are updating the Selling Guide to allow the monthly payment due under an IRS income tax installment agreement to be included in the DTI ratio (in lieu of payment in full), provided the following requirements are met:
· There is no indication that a Notice of Federal Tax Lien has been filed against the borrower in the county in which the subject property is located.
· The lender must obtain the following documentation:
o an approved IRS installment agreement with the terms of repayment, including the monthly payment amount and total amount due; and
o evidence the borrower is current on the payments associated with the tax installment plan. Acceptable evidence includes the most recent payment reminder from the IRS, reflecting the last payment amount and date and the next payment amount owed and due date. At least one payment must have been made prior to closing.
FHA: Tax liens may remain unpaid if the Borrower has entered into a valid repayment agreement with the lien holder to make regular 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 in order to meet the required minimum of three months of payments. The lien holder must subordinate the tax lien to the FHA-insured Mortgage
We in underwriting, continue to invite you to utilize the UWSupport@genevafi.com mailbox. This email is monitored and responses are sent out numerus times during the day by the underwriting department. Please send all scenario or guideline questions to this address and not directly to the underwriters. Thank you to those who have been utilizing this service.