Does anyone know what the IRS's standards are for releasing tax liens on properties that are underwater?

Not necessary unless your buyer makes this a condition of the original offer, or an amend/extend.

If you continue to make principal and interest installments on an asset that has a LTV close to FMV why would you want to release your lien for less than you are contractually owed.

I am VERY excited about this release!

Otherwise I would have jumped on this issue sooner.To specifically answer your question, one way to preserve cash flow is to extend the amortization period.

You would inspect the property as the work progresses and would release the rehab money.

I have sent the Authorization to Release to the bank, but nothing else yet.

There is a warranty deed that will be released to the buyer when the contract is paid off.

All these documents are held in escrow and WILL NOT be released from escrow until all the contingencies have been met.

In looking into this, I see that the lender will want to do inspections of the work and it's progress prior to releasing any funds. most of the work I can do my self and my Full time job is rotaional. 28/28 so I would defanatly have the time to do it. is there any requirments for a residential contractor?