Can you buy a house if you are making payments to the IRS?
Ava Robinson
Published Mar 31, 2026
Yes, you may be able to get an FHA loan even if you owe tax debt. But you’ll need to go through a manual underwriting process to make this happen. During this process, the lender looks for proof that you have a valid agreement to repay the IRS.
Will the IRS let you make monthly payments?
You can apply for an installment agreement online, over the phone, or via various IRS forms. To some degree, you get to choose how much you want to pay every month. The IRS will ask you what you can afford to pay per month, encouraging you to pay as much as possible to reduce your interest and penalties.
Can you get a loan if you haven’t filed your taxes?
Missing Tax Returns You need to bring two years’ worth of tax returns to your loan officer. If you don’t have them, you will be unlikely to get a loan. An easy way to derail the loan process is to explain that you haven’t filed your taxes for the previous year yet.
Can you buy a house if you owe the IRS?
Although you can technically buy a home if you owe money to the IRS, you may have trouble selling the home you already have.
Do you have to pay the IRS when you get a mortgage?
The IRS liens your home, and to lenders it appears that the only reason you are making installment payments now is that the IRS forced you to. Your lender won’t completely ignore your IRS obligation, however. Your monthly payment will be included in your debt-to-income ratio (DTI), which could reduce what you’re allowed to borrow.
Can you buy a house while paying back taxes?
Practical matters. If you plan to buy or refinance a house while repaying back taxes, it might help to negotiate a lower monthly payment and longer repayment period with the IRS. That way, you’ll qualify for more financing if you need it.
What kind of tax form do you get when you buy a house?
As a new homebuyer, you will want to be on the lookout for Form 1098, “Mortgage Interest Statement” which is used to report mortgage interest, including points. This form can help you claim these deductions on your Form 1040.
