How child support delinquencies affect home loans

by | Oct 11, 2018 | Child Support |

Some California non-custodial parents might wonder whether they can get approved for a home loan if they have fallen behind in child support. While this depends on several factors, including the type of loan, it is possible in some circumstances. The first step for people should be to check their credit report since it may not even be on there.

A Fannie Mae mortgage looks only at debt-to-income ratio, down payment and credit score. Although there are several so-called “derogatory events” that can affect a person’s eligibility, being in arrears on child support is not one. People who owe child support may be unable get government-backed loans, which includes USDA, FHA and VA loans. Getting these loans in spite of being behind on child support depends upon whether state child support enforcement has placed the parent in a federal administrative offset program. This may happen if the parent is more than 30 days past due on an amount of $25 or more, but the parent will be notified when this happens.

CAIVRS is another program that tracks child support and other debt. By creating a written agreement with the court or custodial parent to pay the amount back, it may be possible to be removed from CAIVRS. Parents may also want to look into other ways to clear the debt.

In general, the legal system takes the position that a biological parent is financially responsible for a child. A parent can ask the court for a modification in child support if there is a valid reason the parent can no longer pay the agreed-upon amount, such as unemployment. However, the parent should not delay in asking for this since modifications are generally not retroactive.