August 25, 2011
Any type of home loan includes a credit check, including FHA insured mortgages. But FHA loans include an extra requirement when it comes to credit–the borrower is not eligible for an FHA mortgage if he or she is delinquent on any type of federal debt.
An FHA approved lender is required to check to insure the borrower is not delinquent on any debt owed to the government; that check is done using a system called CAIVRS, which stands for Credit Alert Interactive Voice Response System.
This system provides a list of all people currently in default on an FHA insured mortgage, those who have had a government-backed home loan foreclosed on in the last 36 months, and those who are delinquent on a debt owed to the government.
According to the FHA official site, “Examples of Federal debts include previous FHA or Veterans Administration home loans, Federal student loans, Small Business Administration loans and similar types of debts.” That means an a FHA loan applicant could be in danger of having a loan denied if they are delinquent on a student loan–even if only for a small amount. Borrowers delinquent on paying Federal taxes may also be turned down for an FHA loan.
Borrowers listed in CAIVRS
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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