April 17, 2015
In our last post, we answered a reader question about trouble with an FHA home loan associated with information found in the CAIVRS system. One of the important aspects of that reader question is the definition of what CAIVRS is and how data found in that system could affect an FHA mortgage loan application.
The FHA official site has a Frequently Asked Questions section that addresses CAIVRS, which stands for Credit Alert Verification Reporting System. This is a system maintained by the federal government that, as the FHA official site explains, “lists persons who have defaulted or had a loan foreclosed within the last three years on a debt owed to the Federal government or are currently delinquent on a debt owed to the Federal government.”
Examples of what the FHA and HUD term “federal debts” include, but may not be limited to, the following:
–Previous FHA or Veterans Administration home loans
–Federal student loans
–Small Business Administration loans
According to FHA.gov, “A borrower is not eligible for an FHA mortgage if he is presently delinquent on any type of Federal debt, unless the delinquent debt is paid in full or otherwise brought current under a repayment plan approved by the Federal agency that is the holder of the debt.”
With regard to the payment plan, the FHA says if and when a borrower enters into an approved payment plan, in order to be considered for a new FHA loan, “the borrower will have to obtain a written copy of it from the debt holder. (Federal IRS tax liens may remain unpaid provided the IRS subordinates the tax lien to the FHA mortgage.)”
However, in cases where the FHA loan applicant has a previous FHA home loan that was foreclosed upon, “that borrower is not eligible to apply for another FHA mortgage until three years after the date that HUD paid the insurance claim to the lender. Removal from CAIVRS, however, does not guarantee eligibility for an FHA mortgage. A borrower is not eligible for an FHA mortgage if he or she has an outstanding debt with any Federal agency that is in delinquent status.”
So not all borrowers may have issues with CAIVRS, but for those who do (or expect to), knowing these guidelines can save a great deal of time. If you are not currently eligible for an FHA home loan based on how the information provided above applies in your circumstances, you may wish to contact the FHA/HUD at 1-800 CALL FHA to ask for a referral to a HUD-approved housing counselor who may be able to assist with information that can help get a future borrower ready for a new FHA loan application when the time is right to fill out the paperwork.
Do you have questions about FHA loans or FHA refinance loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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