If you think you’ll use government financing to buy a home, you should familiarize yourself with CAIVRS or Credit Alert Interactive Verification System.
This database lets future lenders know of any defaults you had on a government loan. It also lets them know about any liens that you have in your name, again pertaining to federal loans. If you have a listing in CAIVRS, it could make it very difficult for you to get a government loan, such as FHA, VA, or USDA loans.
Showing up in CAIVRS
All government-approved lenders will run CAIVRS before they process your loan application. If your name comes up, the lender will have a series of questions for you regarding the incident. The lender needs to know the reason you are in CAIVRS. They will also need to figure out if there is a way to get you out of it by satisfying the issue that resulted in your listing.
A listing in CAIVRS doesn’t mean only that you defaulted on a house. It could also mean that you defaulted on any other type of federal debt. This could be another type of federal loan, such as student loan debt. You must satisfy the debt in order for the lender to be able to move forward with the loan process.
There are special rules if you did default on a government-housing loan, though. Each program has their own waiting period that you must sit through before you can get another government loan. VA lenders require you to wait two years while FHA loans require you to wait three years.
What Actually Shows up in CAIVRS?
We mentioned a few of the types of loans that can show in CAIVRS above, but there are literally hundreds of loans that can show up in CAIVRS. The most common is the FHA loan. If you lost your home while you had FHA financing, it will show up in this system as a default. Even if you didn’t lose your home, but you defaulted on the loan by making late payments, it will show up in this system.
You’ll also be in the system if you’ve had a VA or USDA loan and defaulted on it in some shape or form. If you made your payments late, this will show up, but you can clear it up with your credit report, showing that you got current on your debt. If the VA or USDA had to bail the lender out, though, by them making a claim, you may have a tougher time getting a loan. This means that you foreclosed on the home and the USDA or VA had to pay the lender the amount they guaranteed.
If you’ve had any issues with the Department of Justice or the SBA, you will show up in the system for that as well. The only federal issue that won’t show up in CAIVRS is tax debt – that’s a separate lien that your lender will still know about, as it will be on your credit report.
Showing up in CAIVRS isn’t a good thing. You want to try to avoid any defaults or foreclosures as best you can. If you are in the system, you must clear up the issue in order to get another federal loan, such as the FHA, VA, or USDA loan.Click to See the Latest Mortgage Rates»