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How Does CAIVRS Affect USDA Loan Qualifying?

January 10th, 2014 by Sean Stephens

What is CAIVRS? 

CAIVRS stands for Credit Alert Interactive Voice Response System. This is a process that all homebuyers interested in qualifying for a federally backed loan, like the USDA, needs to pass to continue in the qualifying process. This week’s tip explains in detail the CAIVRS process and how it can impact USDA loan qualifying.

CAIVRS and the USDA Loan Qualifying Process

CAIVRS is a database created by the federal government to track people who are delinquent on federal debts or obligations.  These obligations include federal liens, judgments, or loans in default or foreclosure, as well as any claims paid by a reporting agency like USDA or FHA. CAIVRS has delinquent borrower records from the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA), the Department of Education (DOE), the Department of Agriculture (USDA), the Small Business Administration (SBA), and the Department of Justice (DOJ).

  • Any individual applying for a USDA, FHA, or VA loan will be required to pass a CAIVRS check: This check allows federal agencies to reduce the risk to federal loan and loan guarantee programs, by identifying applicants with risk factors recorded in their system.
  • Authorized users, such as lenders, have access to this system for the purpose of pre-screening the credit worthiness of applicants for federally guaranteed loans: If an applicant’s social security number is not in the database, the user will receive a clear confirmation code.  However, if there is a record of default, the user will be given the name of the agency reporting the default, the case number of the debt, the type of delinquency (default, claim, foreclosure, lien or judgment) and a telephone number to call for further information or assistance.

For USDA specific qualifying and Per Administrative Notice 4699, any delinquent federal debt identified by CAIVRS shall cause the applicant to be ineligible until the federal debt is paid in full or otherwise resolved such as an official release of liability has been issues.

For IRS Federal Tax judgments, evidence of a payment arrangement may be acceptable provided that the underwriter determines the payment arrangement and history are acceptable.

Rural Development loan proceeds may not be used to pay off and satisfy a debt.

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