Will back taxes need to be taken care of and paid off before we can look at a HELOC option?

When someone owes back taxes, they may need to be paid in full either through the HELOC immediately or before they apply. The danger in the lender’s eyes is that a lien may be placed on title and exceed the LTV between the loan(s) and the value of the property. If a house goes into foreclosure, taxes always get paid first.

If the person is on a payment plan with the IRS, it would likely be treated as any other debt.