The CAIVRS database is a tool used by government agencies to report debts or obligations owed to the Federal government. It provides an up-to-date summary of any outstanding debt obligations, such as delinquent loans or foreclosure activity associated with a consumer’s Social Security number. Not only does it help lenders determine creditworthiness for potential borrowers, but it also serves to warn consumers about their past debts that have gone unpaid to protect them from continued financial difficulty. In this blog post, we will explore the ins and outs of the CAIVRS report so you can become equipped with everything you need to know!
What is CAIVRS?
CAIVRS stands for the Credit Alert Verification Reporting System. It’s a database maintained by the Department of Housing and Urban Development (HUD) that keeps track of people who have defaulted on federally-backed loans or other obligations to the Federal government. If you’ve defaulted on a loan or have an outstanding debt to the Federal government, you’ll be flagged, and that can make it difficult to qualify for another federal loan.
The database can only be accessed by reporting agencies and mortgage lenders approved to use the database. Borrowers or others cannot get access.
How is CAIVRS used?
When a consumer applies for a government-backed mortgage loan such as FHA loan, VA loan, or USDA loan, lenders must use the database to search for any outstanding federal debts. The report provides lenders with an up-to-date summary of any outstanding debts associated with the applicant’s Social Security number. This helps lenders determine if the consumer is a good candidate for a loan and if they have any outstanding payments that need to be addressed before the loan can be approved. Additionally, the CAIVRS report serves as an important tool to warn consumers about their past debts that have gone unpaid to protect them from continued financial difficulty.
Who Is CAIVRS Used By?
The CAIVRS database is used by a variety of federal agencies to track delinquent loans and related debt obligations. All federal loan programs that are backed or insured by the government, including FHA, VA, USDA, and certain other loan types, report these debts. Additionally, payments made on behalf of the applicant that is defaulted on may also be reported. This includes debts owed to other government agencies, as well as unpaid student loans or defaulted mortgage payments. In short, any defaulted loan or debt associated with a federal program is reported to CAIVRS.
CAIVRS is used by these agencies and more:
- Department of Housing and Urban Development (HUD)
- Department of Veterans Affairs (VA)
- Small Business Administration (SBA)
- Department of Education (ED)
- Department of Agriculture (USDA)
- Department of Justice (DOJ)
What does each status mean?
A CAIVRS report returns a status when a borrower’s Social Security number is searched in the database. A CAIVRS report is returned to one of the statuses below.
A – Approved (no outstanding debts)
B – Multiple cases from one or more Federal agencies
C – Claim filed
D – Default on a loan
F – Foreclosure of loan
J – Judgment filed
At this time, I am not aware of any lender that will allow for anything other than a clear CAIVRS report when applying for an FHA, VA, or USDA mortgage loan.
How to clear CAIVRS
If your report shows anything other than an “A” for approved status, there’s only one way to clear it: by repaying the loan or debt you defaulted on. Once you’ve paid in full, your name will be removed from the database. If you believe there’s an error on your report, you can file a dispute with HUD or contact the creditor reporting the information.
Borrowers should expect it to take from several days to weeks to clear their report. The delays are attributed to agency reporting schedules. However, I have had clients receive expedited reporting within a few days.
If you have an outstanding debt to the Federal government, you will be flagged in CAIVRS. This can make it difficult to qualify for another federal loan. If you want to clear your name from the database, you must repay the loan or debt you defaulted on.