Can I buy a house if I have an IRS tax lien?

Buying a house with an active IRS tax lien is extremely difficult but not always impossible. Most mortgage lenders will not approve a loan with an unresolved federal tax lien. However, there are paths forward. If you're in an IRS installment agreement with at least 3 consecutive on-time payments, some FHA and VA lenders will consider your application. You'll need a letter from the IRS confirming your payment plan and payment history. Alternatively, if you can request the IRS to subordinate the lien (Form 14134), the mortgage lender can take priority over the IRS claim on the new property. This is more commonly used for refinancing but can sometimes work for purchases. Private or portfolio lenders may also be willing to work with tax lien situations at higher interest rates. The best strategy is usually to resolve the tax debt first: entering a payment plan and making several months of on-time payments demonstrates responsibility and may allow the IRS to withdraw the lien, clearing the path for a standard mortgage.