#1 Student Loan Lawyer
Updated on October 3, 2022
CAIVRS, or the Credit Alert Verification Reporting System*, is a database created by the U.S. Department of Housing and Urban Development to track defaults, delinquencies, federal liens, and foreclosures related to other federal loan programs.
Information is sent to CAIVRS by several federal agencies, including:
the Department of Education (DOE)
the Small Business Administration (SBA)
the Department of Veterans Affairs (V.A.)
the Department of Agriculture (USDA)
the Department of Justice (DOJ)
If your name is in CAIVRS for a federal debt like defaulted student loans, you’ll need to pay it off or get back in good standing before a lender can approve you for an FHA, USDA, or VA loan. Until then, borrowing a federally-backed mortgage is off the table.
A bank can approve you for a conventional home loan even if your name pops up in a CAIVRS report. They’ll first need to determine if you are a credit risk, which means you’ll need a good credit score (680+), down payment, and a letter that shows how you’re addressing the defaulted student loan (loan rehabilitation, settlement, repayment plan, and so on).
Ahead, learn when lenders pull your CAIVRS report and how to clear it if you’re in the database for defaulted federal loans.
Closing soon and just learned your name is in CAIVRS for old student loans? I share everything I know about the process in this premium guide. Or, if you’d like to hire me to get you off of CAIVRS ASAP, schedule a call with me so I can review your loans, figure out your options, and give you a realistic timeline to clear CAIVRS.
* Before the database moved online, CAIVRS was known as the Credit Alert Interactive Voice Response System.
How to clear CAIVRS of federal debt
There are four ways to get off of the CAIVRS report for delinquent federal debts:
Pay the balance in full. This is the fastest way to get your name off the CAIVRS report. Contact the agency to find out the payoff amount and then send payment. Once received, the agency will access the CAIVRS database and remove your name.
Negotiate a settlement. The agency may be willing to waive the collection fees and interest as part of a settlement. Once the settlement amount is paid in full, the agency will remove your name from the report and give you a confirmation code.
Set up a payment plan. Contact the agency that reported the delinquent debt and ask for a repayment plan. After you’ve made timely payments, you can apply for a new FHA-backed mortgage.
Request an exception. Although there’s no exception for student loan debt in default, there are exceptions to getting an FHA mortgage if you’re in CAIVRS due to bankruptcy, a debt your ex-spouse was responsible for, or you’re a disaster victim.
How to clear CAIVRS with student loans
To clear old student debt from your CAIVRS report, you will first need get out of default and then contact the Education Department to have them remove you from the database.
The first step – getting out of default – can take a couple of days or several months, depending on which option you choose: settlement, consolidation, or loan rehabilitation.
The second step – being removed from CAIVRS – can take up to 10 business days after you get out of default.
Defaulted student loan forgiveness is another option if you’re permanently disabled or your school defrauded you. Read more about borrower defense.
I give step-by-step instructions on all three ways to get out of CAIVRS in my premium guide, Clear CAIVRS Before Closing.
A student loan settlement will get you out of default in about 1-2 weeks. But depending on your student loan balance, a settlement can be expensive, and the full settlement amount will need to be paid in 90 days. Read more about negotiating federal student loan compromises.
Consolidating the defaulted loans into a Direct Consolidation Loan is the most common method that many new home buyers use to return to good standing. You can submit a consolidation application at studentaid.gov. Read more about how to consolidate defaulted student loans.
The process of consolidating and clearing CAIVRS typically takes about 2 to 3 months to complete. But working with a student loan lawyer like me can help cut that time in half. Most of my clients are off of CAIVRS within a month.
3. Loan rehabilitation
Loan rehabilitation won’t help you if your closing date is near. You have to make nine monthly on-time payments to complete the rehabilitation program, return to good standing, and get off of CAIVRS.
You can’t regain eligibility for an FHA mortgage loan until you make your ninth monthly payment. Most borrowers who choose this option do it because they can’t afford a settlement and are barred from consolidating.
Can I get an FHA mortgage with defaulted student loans?
First-time homebuyers can qualify for an FHA mortgage with defaulted private student loans. But if they’re in default with federal student loans, they have to first get out of default and clear the CAIVRS database before their mortgage lender can approve their FHA Loan application.
Can I get a conventional loan with defaulted student loans?
You can get a conventional loan with defaulted student loans. Conventional loans are not backed by a federal agency, so they don’t require a CAIVRS report.
When do lenders check CAIVRS?
Many lenders don’t do CAIVRS checks during the preapproval process. If your student loans don’t show up on your credit report – maybe because they fell off after being in default for so long – the lender will wait until your account is sent to underwriting before they run your name through the database.
This delay puts many future homeowners in an impossible situation: take care of a debt they just learned about immediately or lose the property, down payment, and any earnest money that’s been paid.
Can I check my own CAIVRS report?
You can’t check your own CAIVRS report. Only an FHA-approved lender or authorized user can check a homebuyer’s CAIVRS report. The Department of Housing and Urban Development limits authorization to federal agencies and financial institutions.
How do I get a CAIVRS report?
To get a CAIVRS report, you’ll need to ask your lender to verify your credit status in the database. Your lender won’t get a written report. Instead, once registered, they can access the prescreening CAIVRS Report database.
What if the defaulted student loan isn’t on my credit report?
Some student loan defaults no longer appear on your Equifax, Experian, or TransUnion credit reports. That’s because it’s been more than seven years since you defaulted on the loan.
Even if your defaulted loans aren’t on your credit report, they can still stop your approval when your mortgage is backed by the federal government. These loans appear in CAIVRS no matter how much time has elapsed.
Private student loans that are in default won’t appear in CAIVRS. As long as they aren’t on your credit report, they won’t block your mortgage approval.
CAIVRS Report Codes
Each time your lender checks CAIVRS, the database will generate a 10-digit character code. The first letter lets you know why your name is in the database.
A – Approved by CAIVRS (no credit issue exists).
B – Multiple cases from one or more Federal agencies found in CAIVRS.
C – Claim filed.
D – Default on loan.
F – Foreclosure of loan.
J – Judgment filed.
The database also lists a case number and type. The case type refers to the credit issue with the corresponding federal agency.
Claim: Borrower has a claim filed on a loan from the federal agency listed.
Default: Borrower defaulted on a loan from the federal agency listed.
Foreclosure: Borrower’s loan from the Federal agency listed was foreclosed due to nonpayment.
Judgment: U.S. Department of Justice has filed a judgment against the borrower.
How to request an FHA CAIVRS exception
If you or your lender believe the CAIVRS message is erroneous, contact the appropriate FHA Homeownership Center (HOC) for instructions or documentation to support your eligibility. The HOC can provide information on when the three-year waiting period will elapse or if the Social Security Number in CAIVRS is erroneous.
Be aware that removal from CAIVRS does not guarantee eligibility for an FHA-insured mortgage. You’re not eligible for an FHA-insured mortgage if you have an outstanding debt in delinquent or defaulted status with any federal agency.
So, for example, if you have a federal student loan in default that you don’t believe you owe, you’ll need to work with the Education Department to prove the debt isn’t yours.
CAIVRS frequently asked questions
Can I get a CAIVRS waiver for student loans?
You can apply for a CAIVRS waiver for student loans from the government agency you’re applying to get a loan from. If you apply for a home loan from the Federal Housing Administration but are in CAIVRS for a loan owed to the U.S. Department of Education, you’ll have to request a waiver from the FHA, not the Department of Education. Note: I’ve never seen any home buyer successfully get a CAIVRS waiver.
How long do student loans stay on CAIVRS?
Defaulted student loans will stay on CAIVRS until you get out of default. Agreeing to make monthly payments on your defaulted federal student debt won’t remove you from the databaseCAIVRS. You have to get out of default using settlement, loan consolidation, or the loan rehabilitation program. Veterans who have applied for loan forgiveness due to disability will clear CAIVRS after the loan forgiveness application is granted.
How long does it take to update CAIVRS?
After getting out of default, it can take up to 10 business days for the reporting agency to update the CAIVRS database.
How do I suppress a CAIVRS report?
You can ask for a CAIVRS suppression after you’ve resolved the delinquent federal debt with the agency, either by fixing the disputed information or by entering into a satisfactory loan repayment agreement. Each reporting agency has access to request the CAIVRS database and can request the suppression themselves.
Have more questions? I’ve walked hundreds of people through the process. Get my guide to Clear CAIVRS Before Closing for comprehensive answers and step-by-step instructions to get out of CAIVRS and into homeownership.
Closing soon and need to clear CAIVRS?
In most cases, your best options to clear CAIVRS before closing are student loan settlement and loan consolidation. You can try to do either of those things yourself, but you could lose your home if you don’t fully understand the process.
If you want to clear CAIVRS immediately to refinance a VA Home Loan or qualify for an FHA mortgage, get my guide: Clear CAIVRS Before Closing.
As a student loan lawyer, I’ve helped dozens of people in this exact situation. Or, if you’d like to hire me to get you off of CAIVRS ASAP, schedule a call with me so I can review your loans, figure out your options, and give you a realistic timeline of how long it should take to get things cleared.