Veteran Scenario: The veteran has a tax lien on his or her credit.
VA’s Guidelines: “An applicant cannot be considered a satisfactory credit risk if he or she is presently delinquent or in default on any debt to the Federal Government until the delinquent account has been brought current or satisfactory arrangements have been made between the applicant and the Federal agency. The refinancing of a delinquent VA loan with an IRRRL satisfies this requirement.
An applicant cannot be considered a satisfactory credit risk if he or she has a judgment lien against his or her property for a debt owed to the Government until the judgment is paid or otherwise satisfied.”
What this Means: The tax lien will need to be paid or payment arrangements set up. Most lenders will want to see anywhere from 3-12 months of on time payments towards the lien before they consider doing the loan.
Special Note: The federal or sate agency holding the lien may need to give you permission before you can buy a home.
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