Can I Still Get a Mortgage with an IRS Tax Lien in VA?

Yes, but it's difficult. Getting a mortgage with an active IRS tax lien in Virginia requires lien subordination, an approved IRS payment plan, and a lender willing to work with your situation. It's not automatic, and in Northern Virginia's competitive real estate market, preparation is critical.

A federal tax lien tells every lender that the IRS has a legal claim on your assets, including any property you buy. Most conventional lenders will decline your application outright. But there are paths forward.

How Lien Subordination Works

Lien subordination does not remove the IRS lien. Instead, the IRS agrees to let the mortgage lender's interest take priority. If you default on the mortgage, the lender gets paid first.

To request subordination, you file IRS Form 14134 (Application for Certificate of Subordination). The IRS evaluates whether:

• The subordination will make it easier for you to pay your tax debt
• You are current on an approved installment agreement
• The transaction benefits the government's ability to collect

This process typically takes 30 to 60 days. In a fast-moving market like Fairfax County, Arlington, or Loudoun County, that timeline matters. You need to start the subordination process well before you make an offer on a home.

Lender Requirements in Virginia

Different loan types have different rules:

• FHA loans: Allow borrowers with tax liens if you have an IRS payment plan, at least three consecutive on-time payments, and subordination approval. The lien payment must be included in your debt-to-income ratio.
• VA loans: Similar to FHA, requires an active payment plan and subordination. Virginia's large military population makes this path common in Hampton Roads and the D.C. metro area.
• Conventional loans: Most require the lien to be paid in full or formally subordinated. Stricter than government-backed options.

Your tax professional and mortgage broker need to coordinate. The subordination request, payment plan documentation, and loan application should move in parallel.

What This Means for Virginia Taxpayers

Northern Virginia home prices make this especially high-stakes. A median home in Fairfax County can exceed $600,000. Delays caused by unresolved tax liens can cost you a property in a multiple-offer situation.

If you owe less than $50,000 and can set up a streamlined installment agreement, the path to subordination is more straightforward. Larger debts may require an Offer in Compromise or a more complex payment arrangement.

Another option: if you can pay the full tax debt before closing, the IRS will release the lien entirely. The lien removal process takes 30 days after full payment.

Virginia tax lien removal expert in Vienna, VA works with Virginia homebuyers navigating tax liens and can handle the IRS subordination request on your behalf.

Related Questions

• What is the difference between a tax lien and a tax levy in VA?
• How long does an Offer in Compromise take in Virginia?
• Tax lien removal in Virginia: step-by-step expert guide

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This page is part of the Virginia Tax Relief guide on TaxReliefNearMe.org. For personalized help, contact IRS lien discharge specialist in Northern Virginia at Back Tax Expert Inc. in Vienna, VA.