CAIVRS waiting period after an FHA foreclosure

CAIVRS Waiting Period After FHA Foreclosure

The Question

The CAIVRS waiting period is important if you had a FHA mortgage on a home that was lost to foreclosure, deed in lieu of foreclosure or short sale.

That is the subject of a great question I received this week from Jennifer in Tennessee.

Could you please tell me when the 3-year CAIVRS countdown starts? 

Is it when the Sheriff’s Deed is recorded after the Sheriff’s sale, or is it when the bank re-sells the home.  I ask because our bankruptcy was in 2011, foreclosure ended and sheriff’s deed was recorded 4/16/14. 

However, the home wasn’t re-sold for another 2 years (August 2016).  We are in the middle of a contract and don’t want to lose this home.  I’m really hoping that the 3-year period starts after the Sheriff’s Deed is recorded.  Thank you!  Jennifer in Tennessee

The Answer

CAIVRS is a Government database that tracks credit delinquencies and default on Government debt.  If you experienced a foreclosure, short sale or deed in lieu of foreclosure on a FHA mortgage, your waiting period before being eligible for another FHA mortgage is determined by CAIVRS, and not the foreclosure or resale date.

FHA normally requires a 3 year waiting period from a foreclosure.

When the foreclosed mortgage was a Government insured FHA loan, the waiting period begins from the date that the mortgage insurance claim is paid to out to the lender who held the FHA loan that defaulted.

The mortgage insurance claim is paid out after the foreclosing lenders submits the claim to the Department of Housing and Urban Development (HUD).  This is where it can get tricky.

Since the waiting period begins from the date that the insurance claim is paid, the 3 year clock does not start until after the foreclosing lender submits the claim.  If the lender delays submitting a claim, this could delay your FHA waiting period

CAIVRS is not directly accessible to consumers so you may need the help of a FHA approved lender to determine when you will be eligible for a new FHA mortgage.

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Avoid the CAIVRS Waiting Period

You can avoid the CAIVRS waiting period by not using a FHA mortgage to buy a new home.

If using a Conventional mortgage, the waiting period begins from the date of the Sheriff’s sale or the date that your name is removed from title as the owner of the home.  You do not ever have to wait until the bank sells the home to a new owner.

In Jennifer’s scenario above, the mortgage was included in a bankruptcy and she could be eligible for Conventional financing after 4 years from the bankruptcy discharge date.  Here is the Fannie Mae underwriting guideline that would allow you to avoid CAIVRS completely after a bankruptcy.


Foreclosure and Bankruptcy on the Same Mortgage

If a mortgage debt was discharged through a bankruptcy, the bankruptcy waiting periods may be applied if the lender obtains the appropriate documentation to verify that the mortgage obligation was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting periods must be applied.


Frequently Asked Questions About the CAIVRS Waiting Period After FHA Foreclosure:

What is the FHA foreclosure waiting period?

The FHA requires a 3-year waiting period after a foreclosure before you can get an FHA loan, one year if you have extenuating circumstances.

What is the VA waiting period after foreclosure?

The VA waiting period after a foreclosure is two years if you can prove that you have reestablished good credit, and one year if you have extenuating circumstances. However, if the loan you defaulted on was a VA loan, you may not have any VA entitlement credit left until you repay your original VA loan in full.

What is the USDA foreclosure waiting period?

The USDA waiting period after a foreclosure is 3 years, one year if you have extenuating circumstances.

What is the FNMA Conventional loan foreclosure waiting period?

The waiting period after a loan foreclosure for either a Fannie Mae or a Freddie Mac conventional conforming loan is seven years, three years if you have extenuating circumstances. However, if you qualify due to extenuating circumstances, you will have to pay a 10% down payment to be eligible for a new mortgage.

Also, if you are putting less than 20% down on the new mortgage after qualifying due to extenuating circumstances, you will have to pay PMI insurance on your loan. PMI has its own requirements after foreclosure, so you will want to have your lender check those requirements to see if you qualify.

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What are the waiting periods after short sales and deed-in-lieu foreclosures?

The waiting periods are different for short sales and deed-in-lieu foreclosures than normal foreclosures for some types of loans.

Type of loan Waiting Period With Extenuating Circumstances

  • Conventional (Fannie Mae) 4 years 2 years
  • Conventional (Freddie Mac) 2 years 2 years
  • FHA 3 years 1 year
  • VA 2 years 1 year
  • USDA 3 years 3 years

What Is CAIVRS and how does it apply if I have defaulted on a loan?

CAIVRS (the Credit Alert Verification Reporting System is a database that tracks every person who has defaulted on a federal government-backed financial obligation, like an FHA, VA, or USDA mortgage, or a federally-backed student loan.

Lenders are not allowed to approve loans to anyone on the CAIVRS database until the prior default has either been resolved or removed from the list due to 3 years having passed since they were added to the list, unless there were extenuating circumstances.

How can I access CAIVRS to see if I’m on the list?

You can’t. Only lenders have access to the CAIVRS database. However, you can ask a lender to check for you before applying for a loan.

How long does it take CAIVRS to clear?

Once you’re on the CAIVRS database it takes three years to clear if you were placed on it due to a foreclosure of a government-backed loan. If you were placed on it due to a default of student debt, you will stay on the database until that debt issue is resolved in full.

Have Questions About Qualifying for a Mortgage?

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About the Author

Scott Schang

A 20+ year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues and making sense of complicated real estate and mortgage topics on this website since 2007

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  • Kimberly says:

    Hello Scott,

    My discharge was January 2016. I found that I have a CAIVRS on my report for a FHA loan that was apart of my bankruptcy. My name was removed from the home in Aug. 2018 and sold back to the bank. The PMI was paid I believe in March of 2019. I was told that I will not be able to apply for another FHA loan until March 2022. Is this correct?

    • Scott Schang says:

      Hi Kimberly, you should be able to get the CAIVRS Alert suppressed as long as it’s been 36 months from the foreclosure date. If your name was removed from title in August 2018, you would be eligible to use FHA financing in August 2021.

      Also, under Fannie Mae guidelines, you could be eligible for a conventional mortgage loan 4 years from the discharge of the bankrutpcy, and the subsequent foreclosure can be ignored.

      I encourage you to reach out to an expert in our network by finding someone in your State on our Expert Directory HERE.

      Hope this helps?

  • Steph says:

    Hi, We filed for bankruptcy in 2019 after our home flooded and was a total loss. The mortgage on the home was a USDA rural development loan. This debt was discharged in the bankruptcy. We are hoping to apply for a FHA mortgage soon (the two year waiting period is up in April). Will FHA look at the two year waiting period for the bankruptcy or the 3 year waiting period for the foreclosure that was included in the bankruptcy.

    • Scott Schang says:

      Hi Steph, FHA actually looks at both, but they run concurrently so the only timeline that matters is 3 years from the date of the foreclosure. Now, that said, USDA will allow you to ignore the foreclosure date, but the BK waiting period is 3 years. So, USDA is probably going to be the “soonest” you could buy. FHA would be next.

      Hope this helps?

  • Karen says:

    Hi. I just learned after we signed a contract and paid for the inspection we are 50 days short of the 3 yr fha waiting period for foreclosure. I was told underwriting will give an exception as my husband had a cancer relapse prior to the foreclosure. I can’t get the explanation of benefits for another 10 to 14 business days due to the age. Is there anything else that would give underwriting proof of the treatment causing a financial hardship. We aren’t thrilled with sending medical records either. Any suggestions? Contract has a close date of the 23rd. We’ve held off ordering the appraisal to avoid spending money for a house we may not be able to buy. Thank you for your response

    • Scott Schang says:

      Hi Karen, FHA is actually quite strict when it comes to extenuating circumstances exceptions. Exceptions are typically limited to death or permanent disability of a primary wage earner. That said, what was the actual date of the foreclosure? The CAIVRS alert will stay in effect for 3 years from the date that the mortgage insurance claim from the foreclosing lender is paid, however, you can get the CAIVRS alert suppressed if 3 years have passed since the date your name was removed from the title to the property.

      It makes me a little nervous that your lender said you could get an exception and didn’t bring up the actual waiting period. I would like to suggest that you get a second opinion and consider working with a lender that has experience with these guidelines but at the very least. You should be able to get the foreclosure deed from public records and check the actual foreclosure date.

      If you would like an introduction to a loan officer that has experience with these guidelines, or if you have any other questions, feel free to email me directly at scott@findmywayhome.com

      Hope this helps?