Government mortgage programs are all the rage these days–mainly because that’s where the money is. And unlike the crazy, water-tight underwriting of private mortgage programs, government mortgage lenders don’t require that you provide a saliva sample and turn over your first-born child.
However, there is one hard-and-fast test. You’ve got to get through a CAIVRS test. What is CAIVRS? Well, although it’s pronounced “cavers,” it has nothing to do with spelunking.
CAIVRS stands for Credit Alert Interactive Voice Response System. CAIVRS was developed by HUD and is a federal government database that tracks people who have defaulted on federal debts or obligations, have had claims paid on direct or guaranteed federal loans, have a federal lien, judgment or a federal loan that is currently in default or foreclosure, or has had a claim paid by a reporting agency.
CAIVRS contains delinquent borrower records from:
- the Department of Housing and Urban Development (HUD);
- the Department of Veterans Affairs (VA);
- the Department of Education (DOE);
- the Department of Agriculture (USDA);
- the Small Business Administration (SBA);
- the Federal Deposit Insurance Corporation (FDIC); and
- the Department of Justice (DOJ).
All federal agencies that extend credit pre-screen all applicants for delinquencies on federal obligations–it’s required by law. If you have applied for an FHA mortgage or USDA Rural Development Loan and are not delinquent on federal debt and/or do not have a federal tax lien outstanding, then no worries–the check is a mere formality.
However, if CAIVRS indicates that you are delinquent on federal debt or have had a claim paid in the last three years on any HUD loan, you are not eligible for financing. You will have to pay the debt in full or otherwise bring it current under a repayment plan. If approved you will have to obtain a written copy of the plan from the debt holder. (Federal IRS tax liens may remain unpaid provided the IRS subordinates the tax lien to the FHA mortgage.)
Exceptions to this may be granted under the following situations:
- Assumptions: If you sold the property, with or without a release of liability, to a mortgagor who subsequently defaulted and it can be established that the loan was not in default at the time of assumption, you are eligible.
- Divorce: You may be eligible if the divorce decree or legal separation agreement awarded the property and responsibility for payment is to the former spouse. However, if a claim was paid on a mortgage in default at the time of the divorce, you are not eligible.
- Bankruptcy: When the property was included in a bankruptcy that was caused by circumstances beyond your control (such as the death of the principal wage earner, loss of employment due to factory closing, reductions-in-force, etc., or serious long-term illness), you may be eligible
The federal government can be a tough creditor. While it might make you a loan when no one else will, it will also go to great lengths to collect. And it has more power to do so than anyone.
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(13 votes, average: 4.92 out of 5)
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So, if I filed bankruptcy a couple of years ago I could get an FHA loan, but if I blew off a $1,000 student loan I can’t?
That’s exactly right. The government is hard on student loan repayment because otherwise how could it ever get its money back? It’s not like the feds can repossess your education! So if it’s only $1,000 I suggest you pay it. Or perhaps you can get on an approved payment program.
Eek — do delinquent traffic tickets fall into this category as well?
Thanks for the great info.
Melissa,
No, traffic tickets aren’t federal debts. As a 6-time graduate of traffic school I can vouch for that!
Gina
Gina,
Thanks in advance. If one is in default, then has the loans pulled from default status with rehab or consolidation through the Department of Ed, will the caivrs then become acceptable without a 3-year waiting period?
Do you know of any good attorneys that deal with Student Loans that have been mishandled by the servicing State Agencies or Department of Ed?
Jerry, let me see if I get this straight. You WERE in default, but then consolidated your student loans and ARE NO LONGER in default? Was there a claim paid? In other words, did the government reimburse your lender? If there was a claim paid, then you have to wait the three years. If not, you don’t.
There are a couple of ways to cure a default by consolidation–one is to bring the accounts current, then consolidate, the other is to consolidate while in default. The second way gets you a default on your credit record; the first does not.
Hello, Gina
I completed a rehab in 1/06 on my defaulted student loans. They are completely paid in full. I was wondering should there still be a record of this in the CAIVRS system. And am I able to receive a FHA mortgage based on this information.
Hi Shaun,
You have two things going for you. First, the debt has been paid in full. Second, it’s been three years since you completed your rehab. I’d say you’re fine. If by some chance you’re still in the CAIVRS system erroneously, the agency you’ve set up the plan with can fix that. All they have to do is call the CAIVRS line and go through the TELEPHONE SCRIPT FOR GOVERNMENT EMPLOYEES USING CAIVRS.
Hello Gina,
My husband had applied for a UDSA Loan and was denied because he his FHA mortgage was reported by the lender to CAIVRS due to a short sale defiency of 33K. CAIVRS stated they paid the lender in 11/08. He let us know we are not eligible for a FHA or USDA Loan until this debt is paid off. I feel we are being punished because of a bad market and we had to do a short sale in order to sell and to move back to our home state.
Due his being on this CAIVRS can he get a purchase loan any where else and what if hedoes not pay the debt, when will he be eligible for a FHA or USDA Loan?
If so where can we find these loans?
Hi Lena,
If you sold the property (assumable loan) to someone else who THEN defaulted, you’re in the clear. If your husband divorced and the house went to an ex who was responsible for the payments (who THEN defaulted), you’re in the clear. However, it looks like this is the clause that applies to you:
If CAIVRS indicates that you are delinquent on federal debt or have had a claim paid in the last three years on any HUD loan, you are not eligible for financing. This appears to be the case. And from the USDA’s point of view, you have a record of walking away from debt where you had very little of your own money invested (even though these days you probably had a good reason).
Statistically, those who do that, and then get another loan with again almost nothing invested (like a 100% USDA loan) are very likely to do it again. You will have to pay the debt in full or otherwise bring it current under a repayment plan. Have you tried to do a repayment plan? If you get an approved repayment plan, bring a copy to yopur lender and maybe you can still get an USDA loan.
For extra help, go to my post Can I Get a Mortgage After Filing Bankruptcy? Because it has lots of advice for cleaning up your credit and writing a letter to lenders about how you got into trouble and what you have done to make sure it never happens again.
Lenders like that.
My wife and recently tried to refinance. Everything was approved and we were getting ready to sign paperwork on a FHA loan. They called and said my wife showed up on Caivrs. In 2006 her exhusband lost his job therefore she didnt get child support. She fell behind on payments but was able to sell the house before foreclosure for what she owed. She called the number on the Caivrs report and they said she was listed because it was a pre-foreclosure sale and it will go off in Aug 09. He also said in this case it was up to the lender to go ahead with loan. Our broker said they cant. Should she even be listed on cairvs the house was never foreclosed.?
Hi Gina,
I’m trying to purchase a house thru FHA Loan, and suddenly something came up in the CAIRS system an SBA default Loan. I went bankrupt chapter 7 4 years ago an included this loan under bankruptcy how can I remove that from te CAIVRS system.
Hi, Mike,
The lucky thing about SBA loans is that unlike most federal debt you can discharge them in bankruptcy like any other business loan. Further, an SBA loan included in a bankruptcy may be removed from CAIVRS if the bankruptcy was caused by circumstances beyond your control (such as the death of the principal wage earner, loss of employment due to factory closing, reductions-in-force, etc., or serious long-term illness), you may be eligible.
Your other option may be to call the SBA and get on a repayment plan if in exchange they will remove you from CAIVRS. I’d probably have my BK attorney on this. I don’t know what your amount discharged was–you may have to run some numbers and see what makes more sense–paying off the loan (in exchange for a clean CAIVRS) or cleaning everything else up and saving some cash until you can do a Fannie Mae loan. Your BK at least has some distance on it between you and it, but Fannie Mae does have some ugly add-ons for credit boogers. If you can work an affordable repayment planb for the SBA (I believe they remove you from CAIVRS after 6 -12 months of on-time payments) that may be your best bet. But call a HUD counselor or get a lawyer to make sure.
Good Luck!
Gina
Hi Jason,
If the home was sold for what was owed, then presumably there was no claim paid by HUD and I don’t see whay she would be listed on CAIVRS. If you are using a broker, it’s not likely your broker’s decision to allow the loan to go through but the decision of whatever lender your loan is being put through. So if that’s the case, why isn’t your broker doing his / her job and finding a different lender? The primary advantage of using a broker rather than a bank is that brokers should be able to find a home for your loan by shopping the file with a variety of lenders.
In addition, a good lender pulls a CAIVRS immediately, far in advance of doing anything else with your loan. HUD even states that that is the first thing a lender should do. I’d get the broker to release your case number if the job isn’t getting done and go elsewhere. Rates have been moving up–I wouldn’t want to wait until August.
Hi Gina,
Wonderful site. Very informative.
Is there way for a person to check themselves to see if they are listed on CAIVRS or do I have thru an agency?
Unfortunately, CAIVRS is guarded pretty closely. Or maybe fortunately, given the ease some people have in stealing identities ets. Anyway, according to HUD,
“CAIVRS allows authorized employees of participating Federal agencies to access a database of delinquent Federal borrowers for the purpose of pre-screening direct loan applicants for credit worthiness, and permits approved private lenders acting on the Government’s behalf to access the delinquent borrower database for the purpose of pre-screening the credit worthiness of applicants for Federally guaranteed loans.”
So your best bet is to have a HUD-approved lender do the checking for you. If there is any reason you think you might be on CAIVRS, you might also check with the agency that you think might have reported you (for example, the IRS) and ask them. And being on CAIVRS by mistake isn’t uncommon and can be fixed. You don’t have to walk into your lender’s office with a bag on your head or anything
Hi Gina,
My wife and I had a foreclosure on a FHA loan that was paid on June 23rd of 2006. It has been over 3 years now and we were approved for a VA loan, but cannot clear caivrs, even though it has been over the 3 year mark. The VA is sending me a letter saying that we meet their criteria for a mortgage. What can we do to pass caivrs or get our foreclosure cleared?
I had a small business that failed in 2005 and we lost our home of 30 years. Legally the foreclosure was in Jan. 2006 and in Aug. 2006 I accepted a IT position in a growing medicaid insurance company. We have been paying off old debts and saving to buy another home for 3 years now, and with the foreclosure 3 1/2 years behind us things were looking up. We were pre-approved, found a great house we could afford, locked in a good rate and started packing! Just when we thought nothing could go wrong..the CAIVRS bomb hit! According to them, I am not eligible until June 2010.. 4 1/2 years after we were clear of our foreclosure. Our house deal fell apart and I was out a few $$$ plus emotional stress. I am assuming our only option is wait out the next 11 months…
Tony
Warren, MI
I am in caivrs for back child support I have payed up but how do I get caivrs so I can stream lime my house loan. Who do I call please send me a phone number of who to contact. Thank you
I have in the last month paid off a debt to the VA for an overpayment they made to me in 1998. I am trying to get my new home closed on and even though the VA loan is off of the caivrs there is still an alert. The underwriter called the HOC and they were told that the alert won’t come off of my report for 45-60 days after the debt was paid. My underwriter will not do the loan until the caviers alert is removed. He told me I had nothing else on my report the just said I had to wait until it comes off. Just the alert is there. Well my home is complete and the builder is ready to close. Is this 60 day waiting period accurate? What can I do to get it removed now as I feel I am blacklisted for no good reason.
I stand to loose lots of money and already gave my notice to vacate my apartment. HELP…..
Hi Carol,
Sorry it took me a while to get to you. I try to respond right away and you got trapped in my 808 emails. I apologize because it looks like you need to move on this ASAP. Actually , the lender has the discretion to approve your loan in this circumstance. If it isn’t going to close your close, let your loan officer know that you are taking it elsewhere. Call around and find someone who will do it. Then collect your package from your current lender and switch.
For everyone who needs a caivrs update or mistake fixed:
So your best bet is to have a HUD-approved lender do the checking for you. There is no way for a “civilian” to get access. You might try a HUD-approved housing counselor if you don’t want to deal with a lender.
If there is any reason you think you might be on CAIVRS, you might also check with the agency that you think might have reported you (for example, the IRS) and ask them. And being on CAIVRS by mistake isn’t uncommon and can be fixed. You don’t have to walk into your lender’s office with a bag on your head or anything.