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CAIVRS measures waiting period from foreclosure, short sale, deed in lieu

FHA Waives CAIVRS Waiting Period After Foreclosure, Short Sale or Deed in Lieu?

CAIVRS is an automated monitoring system that tracks defaults on Government debt.

If you have  been a victim of foreclosure, short sale, or deed in lieu of foreclosure on a FHA or USDA mortgage, you will have a CAIVRS alert associated with your social security number.

Default on student loan debt will also trigger a CAIVRS alert, and can prevent you from using a FHA or USD Government insured mortgage.

  • Waiting Periods after Losing Your Home
  • How CAIVRS Can Stop You From Buying a Home
  • Did HUD waive the CAIVRS Waiting Period?
  • Working with a Mortgage Expert
  • Setting Yourself up for Success

Waiting Periods After Losing Your Home

Since 2008, there have ben many families across the Country that fell victim to bankruptcy, foreclosure, short sale or a deed in lieu of foreclosure as a result of the real estate collapse.

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The path forward, if you experienced one of these financial set backs, is typically just a waiting period.  The waiting period to be eligible to buy again will depend on the type of financing you are using.

Conventional Waiting Period

You can buy using conventional financing in:

  • 4 Years after the discharge of a Chapter 7 Bankruptcy
  • 2 Years after the discharge of a Chapter 13 Bankruptcy
  • 4 Years after a Short Sale or Deed in Lieu of Foreclosure*
  • 7 Years after a Foreclosure*

* If your mortgage was included in bankruptcy, and a foreclosure, short sale, or deed in lieu occurs after the discharge, an underwriter may use the bankruptcy waiting period and ignore the subsequent default of the mortgage.

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VA Waiting Period

You can buy using VA financing in:

  • 2 Years after the discharge of a Chapter 7 Bankruptcy.
  • 1 Year after Filing a Chapter 13 Bankruptcy if you have satisfactorily made at least 12 months worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit.
  • 2 Years after a foreclosure or deed in lieu of foreclosure.
  • Short Sale – VA does not recognize a short sale as a derogatory event.  If you are able to credit qualify for a VA loan, a short sale would not prevent you from being eligible for VA financing. Updated 4/2016

USDA Waiting Period

You can buy using USDA financing in:

  • 3 Years after the discharge of a Chapter 7  or 13 Bankruptcy
  • 3 Years after a Short Sale or Deed in Lieu of Foreclosure*

* If your mortgage was included in bankruptcy, and a foreclosure, short sale, or deed in lieu occurs after the discharge, an underwriter may use the bankruptcy waiting period and ignore the subsequent default of the mortgage.

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FHA Waiting Period

You can buy using FHA financing in:

  • 2 Years after the discharge of a Chapter 7 or 13 Bankruptcy.
  • 1 Year after the discharge of a Chapter 13 Bankruptcy (manual underwriting only).
  • 3 Years after a foreclosure, short sale or deed in lieu of foreclosure.

How CAIVRS Can Stop You From Buying a Home

If your foreclosure, short sale, or deed in lieu happened with a FHA or USDA mortgage, a CAIVRS alert is in effect for 3 years from the date that the mortgage insurance claim is paid to the original lender.

While all other waiting periods are measured from the date that the deed of trust is transferred out of your name, the waiting period for a new Government mortgage begins from the date the mortgage insurance claim is paid.

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CAIVRS claims are causing considerable challenges for home buyers that were shocked to find out that the mortgage insurance claim was not issued until months, or even years after the home was transferred out of your name.

This biggest challenge with having a CAIVRS land mine explode under your feet is that inexperienced loan officers do not even know to look for this surprise, until it’s often too late.

If not caught early, the CAIVRS alert will not be caught until you are well into the process to buy your new home.  More often than not, this challenge rears it’s ugly head weeks before the closing date.

Did HUD waive the CAIVRS Waiting Period?

I am now seeing a pattern of HUD volunteering to suppress the CAIVRS alert if you provide them with a scanned copy of the transfer deed removing your name from title.

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I have seen this done several times in the past 30 days, and it was undeniably confirmed when I got this email from a client:

Please email a copy of the Trustee’s Deed Upon Sale to answers@hud.gov. If the sale occurred over 3 years ago we can process an early CAIVRS suppression.

You may also speak directly to a customer service representative by calling 1-800-CALL-FHA (1-800-225-5342) from 8am to 8pm EST or visit our online knowledge base at www.hud.gov/answers, 24 hours/7 days a week.

This is not an isolated incident.  Because we specialize in qualifying for a mortgage after a financial hardship, I see patterns and emerging trends.

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I’ve taken at least four phone calls and emails in the last few weeks about CAIVRS suppressing the alert so that you can go by the foreclosure, short sale, or deed in lieu date, and not when the mortgage insurance claim was paid.

I have also confirmed that mortgage experts from our Expert Network have confirmed that they are seeing these same results.

Working with a Mortgage Expert

Choosing the best mortgage based on your qualifications requires that you work with a professional loan officer that has experience with all of the options that are available to you.

All mortgage companies are NOT created equal.  Big box lenders that advertise on TV, radio and the internet, often only target a very narrow qualifying criteria.

These popular lenders spend millions of dollars on marketing and advertising, only to dump you into a call center and put you in the hands of an inexperienced customer service telemarketer.

Big box lenders try to convince unsuspecting consumers that it’s the lender that matters, and never mention the fact that your loan officer is the gateway to you getting the best mortgage.

You should avoid these types of lenders at all costs if possible.  They do not offer lower rates or better service, but they do have more money to convince you that they do.

Set Yourself Up for Success

The absolute first step to buying a home is to get your financing ducks in a row before you start looking for home.  This means working with a mortgage professional.

Once you find an expert loan officer that you trust, ask them for an introduction to a local real estate agent that they trust.  Even if the loan officer is not from the community that you’re buying in, they will still be able find an agent that rises to the level of professionalism you deserve.

Not sure where to find a professional loan officer that you can trust?  You’re in the right place!

If you have any questions or comments about this topic, feel free to leave a comment below, or you can shoot me an email at questions@findmywayhome.com.

Now sure how to identify a professional loan officer?  Watch these expert interviews I’ve done with professional loan officer friends of mine.

I firmly believe that once you hear how a professional loan officer communicates, it will help you to avoid silly mistakes and errors that are common with inexperienced or uneducated loan officers.

About Your Expert

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

Leave a Question or Comment About this Topic

  • Aaron says:

    Hello, I was foreclosed on (house went up for sheriff sale) in I believe December of 2017. It was an F.H.A. loan. My credit score has since been going up (530 to around 580/600) and my Wife and I are looking to purchase a house that’s only 29,000 in Michigan. What are my options, if any for guaranteed (if their is such a thing lol) loan? My Wife could apply for an F.H.A. loan but her credit is worse than mine so any ideas or a direction for help would be greatly appreciated! Thank you very much for your time. God bless.

    • Scott Schang says:

      Hi Aaron, thank you for your question. The shortest waiting period before buying another home using traditional financing would be FHA. You could be eligible for an FHA loan 36 months from the date that title transferred out of your name. That pushes you out until December of this year.

      If your Wife was NOT on the foreclosure, it’s possible for her to apply for an FHA loan on her own as long as she can meet the income/employment requirements. FHA is kind of an interesting loan in that it requires the debts of the non-borrowing spouse to be counted in the debt to income calculation. FHA will accept credit scores down to 560 (and lower in some cases) as well.

      What might be an option is to try to get a short term personal loan for the $29,000 and refinance into FHA once you’ve met the waiting period in December?

      Hope this helps?

  • Ted Rood says:

    Hi Scott, Appreciate the info you posted here. I’m an LO in Missouri, working for a builder. Have an FHA client with prior FHA foreclosure in Sept 2016. We got a CAIVRS hit as claim wasn’t paid until Sept 2018. FHA mentioned possible suppression in their email to me. I just sent them the sheriff’s deed showing property was transferred 9/8/2016. Is there anything else I can/should do at this point, other than wait? Been an LO for 20 years, haven’t run into this before, sadly. New construction home scheduled to close 11/27, so have a little time, but not too long!

    • Scott Schang says:

      Hey Ted, we’ve been seeing suppressions pretty consistently for the past couple of years. I honestly think you’ll be ok. FHA definitely made a conscious decision to specifically address this situation.

      • Ted Rood says:

        Thanks. Any suggestion other than what I’ve done (send in sheriff’s deed)? I have some time now, but trying to be proactive.

        • Scott Schang says:

          Not unless you can get on the phone with someone and confirm they received it. As long as 3 years have passed from the date of the sheriff’s deed, you should be fine.

          • Ted Rood says:

            Thanks. Guess the biggest question is the time frame to get that confirmed!

          • Scott Schang says:

            My experience has been very quickly after receiving the deed

          • Ted Rood says:

            How’s 4 hours!!!!! Just cleared it. Thanks for your help!

          • Scott Schang says:

            That’s the right answer 🙂

          • Joe M. says:

            Hi Scott, great write up. My situation is a little tricky. I was foreclosed on and discharged with Chapter 7 in July 2017, however the lender never took my name off of the deed. I am now trying to get my CAIVRS claim suppressed with the discharger document plus the bankruptcy papers. Would I have a chance to get it suppressed?
            thanks for your expertise.

          • Scott Schang says:

            Hi Joe, yes, this is a little tricky. If you were foreclosed on, I assuming your mortgage is not current. I’m a little confused on how they could foreclose if your name is still on the deed? Foreclosure is the legal action required for the bank to remove your name off the deed and take possession of the property.

            Also, the CAIVRS claim is on there because the mortgage insurance claim was paid to the lender. I don’t see how your name could still be on the deed.

            One more thing that’s kind of sticking out here is that if you need to remove CAIVRS, it sounds like you are applying for a FHA mortgage 2 years from the discharge of your bankruptcy? FHA also requires a 3 year wait from the date of the foreclosure.

            I think there are some missing pieces here. If you would like, you can shoot me an email directly to scott@findmywayhome.com and let’s dig in a little deeper so I can give you an accurate path to buying your next home.

            Hope this helps?

  • Leann J says:

    Good morning. Please help me make some sense of this.
    My parents purchased my home during a nasty divorce. I’ve lived in it and made payments for everything home related. Mortgage still in moms name as her 2 Nd vacation home. I filed chapter 7 after I moved out of home, waited till cleared as advised 2/13 and then filed divorce. He lived in property and left it go to foreclosure.mortgage was listed as part of bankruptcy. House foreclosed in later ‘13, and divorce in ‘14. Listed in divorce is that ex is responsible for all financial etc on the marital property. I’m trying to get the home in my name using a Fannie Mae conventional, but I’d like to do a quit claim deed and refinance. I’ve been told there is waiting period after quit claim anywhere from 6-12 months. Is that true? I’m trying to see if I can avoid paying double closing costs and yet another city inspection. There should be at least 20% equity bought $146 owe $100k. Any ideas or options much appreciated. Thanks so much.

    • Scott Schang says:

      Good morning, Leann. I’m a little confused. You said that the home was foreclosed in later ’13? Shoot me an email at scott@findmywayhome.com and we’ll get this figured out. You make it sounds like you’re living in the home now, the home that is in your Mom’s name, that your ex lived in and stopped making payments and it was foreclosed. That’s what’s throwing me off.

      If we are talking about your eligibility to use Fannie Mae financing after the BK, it’s only a 4 year waiting period from the discharge, and you can ignore the foreclosure date. You’re in the clear there.

      As far as refinancing the home into your name, you would have to get added to the title to do that. You most likely would need to do an appraisal to refinance, there may not be a way around that.

      shoot me an email, and help me understand which home we’re talking about here.

      Finally, and this might be the answer you were looking for, if you’re only putting the loan in your name (refinance), you can add your name to title through quit claim and refinance right away into your name.

      If you are taking cash out from the refinance, you have to be on title 6 months to do so.

      Hope this helps?

  • Lori says:

    Hello Scott, I’ve been dinged by CAIVRS on my credit report for a foreclosure legally filed in motion January of 2014 (it was added to my ch.13 bankruptcy filed 8/16/12) It did not “clear” or whatever your deed transfer term is, allegedly until August of 2017!! And even then it was to a completely different mortgage holder than when I originally filed. To say I am miffed that I’m left holding the bag on the ineptness of these mortgage companies to finish the transfer is an understatement. What can I do? I am in jeopardy of losing my dream career because I have to assume my region where I was hoping to buy a home by a certain date. Renting is not a viable option. 2 lenders I’ve talked to seem clueless! HELP

    • Scott Schang says:

      Hi Lori, I’m not sure I completely understand your situation. It is quite normal for a Chapter 13 to be discharged after 5 years of making payments. The question here is, what happened to the home? Do you still live in it? Did you stop making payments? Are you still on title? I can definitely introduce you to a lender that has extensive experience with these guidelines and can give you a 100% accurate assessment of your options.

      I saw that you also sent me an email, I’m going to go into further detail as to what the next steps are to get to the bottom of this.

      Hope this helps?

  • Andres Jaramillo says:

    Hi Scott, Need help. I was told I qualified for a FHA Loan in Charlotte. I moved my family from South Florida to close on the home August 22, 2019. We are 5 days away and the CAIVRS report has pulled up a SBA loan that i defaulted on December 2016. I filed for bankruptcy officially 2016 however the loan officer is stating that FHA under-righter will not allow a FHA anymore. Too short notice for Arm loan that hey are offering to gather 45k dollars or the private loan with 10% down and a 6.25 rate. Is there anything that can be done?

    • Scott Schang says:

      Hi Andres, I think you’re stuck on the SBA loan, and I’m not an attorney, but I would check to see if an SBA loan can be discharged in bankruptcy, I’m thinking it might not. Like student loans.

      The 10% loan at 6.25% is not a bad solution. You only need to be 4 years from the BK discharge to refinance out of that loan into a Conventional loan. Yes, you’ll pay a little more, but only for a short period of time. The benefits of homeownership far outweigh that very small cost.

      I do have a few friends in NC if you want a second opinion. If you would like an introduction, shoot me an email to scott@findmywayhome.com and I can make that connection.

      Hope this helps?

    • Shameca says:

      I have a friend going thru the exact same thing and suppose to close soon. What was the resolution method you used to still buy your home?