If you’re applying for a government-backed loan, your lender will run a CAIVRS check. The results might prevent you from getting the loan.

When you apply for a government-backed loan, like an FHA-insured mortgage, the lender will run a CAIVRS (pronounced "kay-vers") check before approving your application. CAIVRS is a database that keeps track of defaults, delinquencies, and foreclosures related to federal debts. If the CAIVRS search shows you're delinquent on a government debt, you won't be able to get a new loan until you're no longer delinquent on the federal debt or, in some cases, until a certain amount of time passes.

Role in the Mortgage Application Process

After you apply for an FHA-insured, VA-guaranteed, or another government-backed mortgage, the lender will run a search in a database called the "Credit Alert Interactive Voice Response System" (CAIVRS). This database shows whether you're currently in default or foreclosure on any federal debt, or have had a claim paid by the reporting agency. If you show up in CAIVRS as delinquent on a government debt, the lender probably won't approve you for the new loan.

Example. Say you default on an FHA-insured mortgage loan. You lose the home to foreclosure, but the property doesn't bring in enough money at the foreclosure sale to fully repay the lender. The lender makes a claim to the FHA, and the FHA compensates the lender for the loss. Your name then goes on CAIVRS for three years following the claim. If you apply for a new FHA loan during those three years, the lender will most likely reject your application for the new loan.

Who Reports to CAIVRS

A few of the government agencies that report to CAIVRS are the:

  • Department of Education
  • Department of Housing and Urban Development (HUD)
  • Department of Agriculture
  • Department of Justice (DOJ)
  • Department of Veterans Affairs (VA), and
  • Small Business Administration (SBA).

So, if you're in default on your federal student loans, owe money to the SBA for a loan you took out to start a business, or have an unpaid settlement to the DOJ, a CAIVRS search will reveal this information. But CAIVRS doesn't track all delinquent government debts. For example, delinquent tax payments to the IRS are usually reported to the credit reporting agencies (TransUnion, Equifax, or Experian), not CAIVRS.

How Can I Find Out If I'm on CAIVRS?

Unfortunately, unlike with credit reports, you can't just request a copy of your CAIVRS report on your own; a lender will have to pull it for you. If you're applying for a government-backed loan, the lender can—and will—run a search in the database on you. If the CAIVRS report shows you have delinquencies, you might be able to fix them and proceed with the new loan.

Fixing Mistakes

If CAIVRS shows you're delinquent on a federal debt, HUD (which manages the database) will provide:

  • the name of the agency that reported the delinquency
  • the type of delinquency (such as a student loan, a federal lien, judgment, or a government-backed loan that went into default and was foreclosed upon), and
  • a telephone number you can call for more information or assistance.

Review this information and make sure the CAIVRS entry isn't an error. Just like with regular credit reports, mistakes can happen. Incorrect reporting sometimes occurs after someone is the victim of identity theft when the thief takes out a new federal loan and then stops making payments. If you find that an agency is improperly reporting you on CAIVRS, send any relevant documentation showing the error to the reporting agency. Theoretically, the agency should then update your file in CAIVRS. (To learn about steps you can take to protect yourself from identity thieves, see Top Ten Ways to Prevent Identity Theft.)

Clearing Up Your CAIVRS Report

You might be able to clear up the matter even if the CAIVRS entry isn't a mistake, though you probably won't be able to get a new government loan in the meantime. For instance, if you're in default on a federal student loan, you can usually clean up your CAIVRS records by paying off the debt in full or establishing a repayment plan with the federal Department of Education and making timely payments.

As mentioned earlier, if you previously had an FHA-insured mortgage and lost your home to foreclosure, you'll typically have to wait three years before you can get another FHA-insured loan. In some cases, though, being on CAIVRS might not prevent you from getting a new FHA-insured loan, like if you got divorced and your spouse was supposed to make the mortgage payments but didn't. The lender won't make an exception, however, if FHA paid an insurance claim on a mortgage that was in default before the divorce.

Avoiding CAIVRS

If you're applying for a government-backed loan, you can't avoid CAIVRS. But if you apply for another kind of mortgage, the lender won't run a CAIVRS search. Keep in mind, though, that late mortgage payments, foreclosures, and student loan defaults are typically shown on your credit reports, which a conventional lender will use when deciding whether to loan you money. (Learn when you can get other types of mortgages, like conventional loans, after a foreclosure.)

Getting Help

If you need help clearing up a CAIVRS mistake because an identity thief used your personal information to get a new loan and then defaulted, consider talking to a consumer protection or identity theft attorney. If you have questions about foreclosure, consider talking to a foreclosure attorney.

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