Private Road Maintenance Agreement: Understanding Mortgage Qualifying Requirements
Private Road Maintenance Agreement: Understanding Mortgage Qualifying Requirements for FHA, VA, USDA & Conventional Loans.
When is a Private Road Maintenance Agreement required for FHA, VA, USDA, and Conventional loans? Is a Private Road Maintenance Agreement required for mortgage loans in Florida, Texas, Tennessee, or Alabama?
If you are purchasing a home on a private road, understanding mortgage requirements is crucial. Private roads are common in rural areas, and mortgage programs can have specific guidelines regarding their maintenance and accessibility. Today, we’ll break down the Private Road Maintenance Agreement requirements for FHA, VA, USDA & Conventional Loans, separating fact from fiction.
Now, if you need help or have a question, take advantage of our Second Opinion Service “SOS” which is designed to help Realtors and Buyers get access to an expert second opinion and is great for both new pre-qualifications and loans that are already in progress.
Is a Private Road Maintenance Agreement required on FHA, VA, USDA, and Conventional loans?
Before determining whether an private road maintenance agreement is needed, it’s always a good idea to check with your local county roads & bridges department to confirm how the road is classified. A dirt road doesn’t automatically mean it’s private, as counties have different classifications.
When is a Private Road Maintenance Agreement Required?
Here’s what you need to know for each loan program:
- Fannie Mae conventional guidelines require a “legally enforceable agreement or covenant for maintenance of the street”; and
- VA loans require evidence of a joint maintenance agreement, permanent easements, and that all streets must have an all-weather surface. However, VA may approve a waiver of the private road maintenance agreement requirement based on the specific facts involved.
Generally speaking, a private road maintenance agreement is one that provides for the continued maintenance of the road and other terms agreed upon by the property owners who benefit from the road and as many of us know, this can be an extremely difficult document to locate due to a variety of factors which can lead to much frustration.
Understanding Easements and Private Road Agreements
However, what many do not realize is that FHA, USDA, and Conventional loans under Freddie Mac do not require a road maintenance agreement, but instead just need to show evidence of permanently recorded easements for ingress and egress.
Remember that an easement is a nonpossessory interest in land which allows the holder the right to use a tract of land for a special purpose. While this sounds complicated, don’t get overwhelmed with the details because your our title company or closing attorney can help verify the necessary documentation.
Final Thoughts
While private roads can present unique challenges, not all loan programs require a Private Road Maintenance Agreement. Understanding the requirements ahead of time can prevent roadblocks in the mortgage process.
If you have questions or need a second opinion on your mortgage scenario, take advantage of the Metroplex Second Opinion Service (SOS). We provide expert guidance for new pre-qualifications and loans already in progress.
Just simply call, text, or email to discuss your scenario and let us show you the “Metroplex” difference.
(800) 806-9836 Ext. 280
Call/Text: 863-593-2001
SeanS@MPLX.org
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I want everyone to make it a great day and look forward to seeing you right here, for the next tip of the week.
