Does a tax lien affect my ability to get a mortgage?

A federal tax lien significantly impacts your ability to get a mortgage, even though credit bureaus no longer include liens on credit reports. Mortgage lenders perform a separate public records search and will find any filed tax liens. Most conventional mortgage programs require all federal tax liens to be resolved before closing. FHA loans may allow you to qualify with a tax lien if you've been in an IRS payment plan for at least 3 months, have made all payments on time, and the lien holder (IRS) agrees to subordinate the lien to the mortgage. VA loans have similar provisions. If you're actively resolving your tax debt, you can request the IRS subordinate the lien (Form 14134), which allows the mortgage lender to take priority. This is easier than full lien removal and is specifically designed for refinancing or purchasing situations. Working with a mortgage broker experienced in tax lien situations and a tax professional simultaneously can help coordinate the process.