A borrower seeking to obtain an FHA-insured mortgage must be rejected if

• the borrower is suspended, debarred, or otherwise excluded from participation in HUD's programs and appears on either the
• HUD Limited Denial of Participation (LDP) list, or
• General Services Administration's (GSA's) " List of Parties Excluded from Federal Procurement or Nonprocurement Programs," or
• the borrower is presently delinquent on any Federal debt or has a lien placed against his/her property for a debt owed to the United States Government.

Notes:

• A borrower who is delinquent on a Federal debt may become eligible once he/she brings the account current or enters into a satisfactory repayment plan with the Federal agency.
• A mortgage loan is not eligible for insurance if any party to the transaction is on either of the above lists. An exception exists for a seller on the list who is selling his/her principal residence.

Reference: For more information on

• loan transactions that are ineligible for insurance due to any party being on either of the above lists, see HUD 4155.1 4.A.7.c., and
• exceptions to the requirement that a party on one of the above lists must be considered ineligible, see HUD 4155.1 4.A.8.e.

FHA has a three-year waiting period to regain eligibility for another FHA-insured mortgage when the borrower has had past delinquencies or has defaulted on an FHA-insured loan.

The three-year waiting period begins when FHA pays the initial claim to the lender. This includes deed-in-lieu of foreclosure, as well as judicial and other forms of foreclosures.

Lenders should contact the HOC having jurisdiction over the area where the property subject to default is located for information such as the

• date the claim was paid, and
• date of the initial default.

Lenders are responsible for screening all borrower's using HUD's Credit Alert Interactive Voice Response System (CAIVRS). A borrower is not eligible for an FHA-insured mortgage if CAIVRS indicates that the borrower

• is presently delinquent, or
• has had a claim paid within the previous three years on a loan made or insured by FHA.

Reference: For additional information on lender responsibility for using CAIVRS to screen borrowers, see HUD 4155.1 4.A.8.