Mortgage  Question?
Can You Qualify for Mortgage With Student Loan Default?

Can you qualify for a mortgage with a student loan default?

Harry Jensen
, Trusted Mortgage Expert with 45+ Years of Experience

The answer to your question depends on the type of student loan, if and how the defaulted student loan appears on your credit report, the timing of the default, the steps you took to resolve (or cure) the issue and if your name is in the CAIVRS database due to the default.

If the defaulted student loan appears on your credit report and you are applying for a conventional mortgage, then lenders typically require you to provide a letter of explanation that addresses why the default occurred and any steps you took to resolve the issue.  For example, it is important to provide information on any settlement or payment plan you implemented to cure the default. Any letter that you provide to the lender should be factual, concise and focus on how you attempted to resolve the matter.

If the loan does not appear on your credit report, then you may not need to provide the letter and you should be able to qualify for a conventional mortgage, assuming your credit score and other qualification factors meet the lender’s requirements.

Review How to Qualify for a Mortgage With Student Loans

The timing of the student loan default is also important.  A default of any type can negatively affect your credit score which may make it more challenging to qualify for a mortgage or you may be required to pay a higher interest rate.  The more recent the default, the more likely it is to hurt your score and the more significant the potential impact.  You can use credit monitoring apps to review your score and to determine if the defaulted student loan appears on your credit report.

The type of student loan and the mortgage program you are applying for are other key considerations.  This is because if you defaulted on a federal student loan, depending on when the default occurred, you may appear in CAIVRS. Simply put, CAIVRS is a database run by the government that keeps track of borrowers who are delinquent on, defaulted on or had a claim paid on a government-backed loan, including student loans.

If you are in CAIVRS, you are typically not eligible for another government-backed loan such as an FHA, VA or USDA mortgage.  In most cases you are required to resolve the default by bringing the loan current or setting up a payment plan if you want to qualify for a government-backed mortgage program.  Please note that if you are listed in CAIVRS, the mortgage lender is required to confirm that the reason for your inclusion -- the student loan default or delinquency -- is valid before your application is declined. 

We should also emphasize that you only appear in CAIVRS if you defaulted on a federal student loan and lenders usually only check the CAIVRS database when you apply for a government-backed mortgage program.  So if you defaulted on a private student loan, you should not be in CAIVRS. 

Additionally, if you defaulted on a federal student loan and you apply for a conventional loan, appearing in CAIVRS should not directly affect your ability to get approved for the mortgage, as long as you satisfy the lender's minimum credit score guideline.  In fact, lenders usually do not check CAIVRS for conventional mortgage applicants.

You may still be required to provide a letter of explanation but the default may not be a disqualifying factor or delay when you apply.  In short, if you defaulted on a student loan, it is usually easier to qualify for a conventional mortgage than a government-backed program.

Additionally, it is important to highlight that if you resolved the default and are current on, or paid off, your loans, your name should be removed from the CAIVRS database but this does not always happen.  If you are no longer in default and you apply for a government-backed mortgage but the lender tells you that you are in CAIVRS, you can request that your student loan lender removes you from CAIVRS.

The student loan lender can also provide documentation to your mortgage lender that the default has been corrected.  Together, these actions should eliminate this issue and you should be able to qualify for a government-backed mortgage.

Because there are several financing options depending on your personal circumstances, type of loan and the status of your student loan default, your best course of action is to review your situation with multiple lenders to understand the program that is right for you. We recommend that you contact several lenders in the table below as qualification requirements for applicants with defaulted student loans may vary. Plus, shopping for your mortgage enables you to find the best loan terms.

Current Mortgage Rates in Ashburn, Virginia as of December 7, 2023
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Rate data provided by Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes or insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details. Data provided by Icanbuy. Payments do not include amounts for taxes and insurance premiums. Read through our lender table disclaimer for more information on rates and product details.


"Student Loan Solutions, Frequently Asked Questions."  Fannie Mae Single Family.  Fannie Mae, July 2018.  Web.

"II.A.1.b.ii.(A)(10). Borrower Ineligibility Due to Delinquent Federal Non-Tax Debt."  FHA Single Family Housing Policy Handbook 4000.1.  Federal Housing Administration, January 2 2020.  Web.

"CAIVRS - Credit Alert Verification Reporting System."  HUD.  U.S. Department of Housing and Urban Development, 2020.  Web.

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About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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