FHA, VA & USDA: Delinquent Federal Debt

Created by Mariela Aparicio, Modified on Thu, 16 Jan at 4:36 PM by Mariela Aparicio

Borrower Ineligibility Due to Delinquent Federal Non-Tax Debt

Please see below on how to verify and resolve delinquent federal debt.

(b) Verification

If a delinquent Federal Debt is reflected in a public record, credit report or equivalent, or CAIVRS or an Equivalent System, the Mortgagee must verify the validity and delinquency status of the debt by contacting the creditor agency to whom the debt is owed. If the debt was identified through CAIVRS, the Mortgagee must contact the creditor agency using the contact phone number and debt reference number reflected in the Borrower’s CAIVRS report. If the creditor agency confirms that the debt is valid and in delinquent status, then the Borrower is ineligible for an FHA-insured Mortgage until the Borrower resolves the debt with the creditor agency.

(c) Resolution

In order for a Borrower with verified delinquent Federal Debt to become eligible, the Borrower must resolve their federal non-tax debt. The creditor agency that is owed the debt can verify that the debt has been resolved this can be repayment, consolidation or a payment plan.

(d) Required Documentation

LSI MUST include documentation from the creditor agency to support the verification and resolution of the debt. For debt reported through CAIVRS, the Mortgagee may obtain evidence of resolution by obtaining a clear CAIVRS report.