FHA Loans: What You Need to Know in 2022
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Understanding the FHA CAIVRS Check

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If you’re applying for a mortgage backed by the government, your loan officer may mention running a CAIVRS report. Short for Credit Alert Interactive Verification Reporting System, this little-known government database checks for delinquent federal debt that could affect your loan approval.

What is CAIVRS?

CAIVRS (pronounced KAY-vers) is a database that tracks liens, defaults and any delinquent federal debt. Borrowers applying for loans backed by the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), or the U.S. Department of Agriculture (USDA) are screened through the system before their mortgage application is approved.

The U.S. Department of Housing and Urban Development (HUD) founded CAIVRS in 1987 as a way to make sure anyone applying for federal credit wasn’t in default on a federal debt already. Three years later, the federal government began using it to ensure applicants were creditworthy borrowers for other federal loans, including government-backed mortgages.

The HUD database serves several purposes:

  • It checks that people applying for federal loan programs don’t have outstanding debt or delinquencies on other federal loans.
  • It helps private lenders that issue government-backed loans avoid extending credit to people considered credit risks.
  • It shows the public the federal government is taking steps to collect unpaid debt.

Your credit report typically reflects delinquent federal debt that appears on a CAIVRS report, such as defaulted student loans or foreclosure of an FHA, VA or USDA home loan. Even if you qualify for a mortgage based on your credit scores, your loan may be denied if your CAIVRS report shows defaulted federal debt.

What information shows up in CAIVRS?

There are six types of defaulted federal debt that may show up on a CAIVRS report. This includes:

  • FHA loans. HUD reports any current FHA loan delinquencies, as well as insurance claims paid by HUD for homes foreclosed in the last three years.
  • VA loans. Military homeowners that default on their VA loans are reported to CAIVRS. The VA also reports information on Native American Direct Loans (NADL) and VA interest rate reduction refinance loans (VA IRRRLs).
  • USDA loans. Rural homeowners with delinquencies, defaults or insurance claims on federally guaranteed USDA loans are reported to CAIVRS.
  • Federal student loans. The Department of Education reports delinquent or defaulted student loans, as well as claims paid for federally backed education loans.
  • Small business loans. A Small Business Administration (SBA) loan might escape reporting on your personal mortgage credit report if it was taken out using your business tax identification number (TIN) instead of your Social Security number. However, borrowers that default on SBA loans are reported to CAIVRS.
  •  Department of Justice judgments or settlements. CAIVRS collects data on DOJ debtors or those who have unsatisfied judgments (which are court orders to pay debts).
Note about IRS liens: Delinquent taxes and liens aren’t reported to CAIVRS. They are handled separately by the Internal Revenue Service (IRS) and show up on the public records section of your credit reports.

How to find out if you are on CAIVRS

The only way you’ll know if you’re listed on the CAIVRS database is to apply for a federal loan. Only participating federal agencies and private lenders can access the system.

Here are the steps lenders typically take to check the CAIVRS database:

  1. The lender enters your name, Social Security number or tax ID into the system.
  2. HUD sends a clear CAIVRS number or confirmation code if the number is not in the database.
  3. HUD provides the name of the agency reporting any defaulted debt, the related case number, the type of delinquency being reported (for example, a default, lien or judgment) and a contact number to request for more information.

What happens if your CAIVRS report isn’t clear?

You won’t be able to get a government-backed mortgage if your CAIVRS report isn’t clear. However, here are some steps you can take in the meantime:

Make sure the information is correct. Errors in Social Security number reporting may trigger an incorrect CAIVRS report. If you recently paid off a delinquent federal debt, provide documentation to your lender to have the report corrected. Contact the FHA Homeownership Center in your area if you believe you’re mistakenly listed on CAIVRS.

Apply for a conventional mortgage. Conventional loans are not backed by any federal agency and don’t require a CAIVRS report. If you’re stuck trying to clear an old claim that’s still showing on CAIVRS, try applying for a conventional loan instead.

How long do delinquencies stay on CAIVRS?

CAIVRS reports delinquent federal debt for 36 months after a claim is paid. However, the time it takes for a federal agency to report bad debt to CAIVRS may vary, making it even more important to have a CAIVRS report run early in the lending application process if you have delinquent federal debt in your past.

For example, the VA allows you to apply for a new mortgage two years after a VA foreclosure, but CAIVRS might still report the debt for three years. Knowing this early in the loan process could help you avoid unexpected stress and delays right before a loan closing.

Are there exceptions to this rule?

You may still get an FHA-insured mortgage — even if you don’t have a clear CAIVRS — in the following scenarios:

  • Your FHA loan was assumed. If someone bought your home and took over your FHA loan with an assumption and later defaulted, you may still be eligible for a new FHA mortgage. 
  • Your bankruptcy was due to circumstances beyond your control. You may be eligible for an exception approval for federal debts written off through bankruptcies because the primary wage earner died or became ill.
  • You got a divorce. If your ex-spouse was responsible for a mortgage per your divorce decree or legal separation agreement, lenders may not count the debt against you if it happened after the agreement was enacted.
  • You were a disaster victim. You might be exempt from CAIVRs reporting if you couldn’t pay your mortgage because you were involved in a presidentially-declared disaster, so long as you were current on your mortgage before the disaster.
  • You’re selling your home. The CAIVRS report may create challenges if you’re selling a home to a buyer using FHA, VA or USDA financing. An exception may be made, though, if the home is your primary residence.

How to clear a CAIVRS default

You won’t be able to take out a new federal loan if your CAIVRS report reveals a delinquent federal debt, but you can take these steps to clear it:

  1. Pay the past-due balance in full. Pay the balance off (if you can) and provide proof of the paid debt to clear your CAIVRS report.
  2. Set up a payment schedule on the delinquent balance. You may be able to negotiate a payment plan for defaulted federal debt that is in a collection or judgment status. Once you’ve made timely payments, you may apply for a new federally backed loan.
  3. Prove you’re eligible for an FHA CAIVRS exception. If you meet and can document circumstances for the special exceptions mentioned earlier, you might be able to overcome negative CAIVRS feedback.

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