Skip to Content

CAIVRS, Federal Debts & Landing a VA Home Loan


In a perfect world, when you're ready to purchase a home using your VA loan benefits, your financial slate is clean.

Our Lighthouse Program can coach you through credit problems and help you achieve your dream of homeownership. But debt and derogatory credit can be a different issue.

When it comes to having derogatory credit, lenders can live with a certain amount. They'll often have an in-house cap for the amount of derogatory credit (things like collections and judgments) for a loan file. Maybe it's $3,000 or $5,000 or more. Prospective borrowers who come in under that benchmark can move forward with the process.

But problems with one type of debt in particular -- federal debt -- can force you to put your VA loan plans on hold.

Veterans and active military members who are either delinquent or in default on a federally assisted loan cannot meet the VA's definition of a satisfactory credit risk. And that means VA lenders will be forced to turn you away.

CAIVRS Database

VA lenders will run your name through a specialized database called CAIVRS, which stands for Credit Alert Interactive Voice Response System. The U.S. Department of Housing and Urban Development maintains this system, which includes information from a host of governmental agencies, including:

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

Defaulting or being delinquent on federal student loans is perhaps the most common CAIVRS issue, and a big reason why staying current on them is so critical. Losing an FHA loan to foreclosure is another common reason for a CAIVRS hit. Veterans who have yet to settle overpayments on education or disability income may wind up in the database.

If you're looking for a government-backed home loan, be it VA, FHA or USDA, lenders are required to run your name through the CAIVRS database, along with the names of any co-borrowers. So what happens if your name turns up in this system?

Getting a Clear CAIVRS

When it comes to student loans, if you’re delinquent or in default, getting the debt repaid immediately is ideal. But that’s not always possible, especially when the average college senior graduates with about $35,000 in student loan debt. If you can get into a repayment plan with the debt holder, you may be able to pursue a government-backed home loan.

Guidelines and policies for how this might work in practice can vary by lender. Some lenders may require a 12-month history of on-time repayments, while others may allow for a shorter repayment history. In any case, you will also need a clear CAIVRS. Some repayment plans will remove your delinquent student loan debt from the CAIVRS system once you’ve made on-time payments for a set number of months.

A loan officer can go over your specific situation in detail.

Defaulting on a government-backed home loan can lead to a three-year wait from when the government pays the foreclosure claim. This can be especially frustrating for borrowers who've discharged a government-backed loan through bankruptcy only to see it foreclosed on months or even years later. Not all federal loan defaults will wind up getting reported to CAIVRS.

Consumers can't access the CAIVRS database directly. Talk with a loan officer in more detail about how to tackle a CAIVRS issue.

If you're struggling to stay on top of your credit score, consider talking with a credit expert in our Lighthouse Program at 888-392-7421. This special wing of Veterans United helps veterans, active duty service members and their families for free to get a handle on their credit situation and get on the path to loan prequalification.

Check Your$0 DownEligibility Today!

START HERE: $0 Down VA Home Loans
2,027 Veterans started their online quote today.