If I’m purchasing a property on a road that is private and therefore not maintained by the local municipality, do I need a Private Road Maintenance Agreement with my neighbors in order to qualify for a mortgage?

This questions comes up most often when the property in question is located in a rural setting. And believe it or not, it’s not rare for the lack of a Private Road Maintenance Agreement to halt or hinder a borrower getting approved for a mortgage loan.

Some mortgage lenders are far more stringent on their requirements than others. In some cases, the lack of a Private Road Maintenance Agreement has forced some borrowers to switch mortgage products and therefore have to pay more money in closing costs. This is why it’s important to understand the requirements of each mortgage product before moving forward. See below:

• Fannie Mae (Conventional): A Private Road Maintenance Agreement is required.
• Freddie Mac (Conventional): A Private Road Maintenance Agreement is not required.
• FHA: A Private Road Maintenance Agreement is not required, however you will be asked to provide a recorded road easement.
• USDA: Requirements are determined on a case-by-case basis.
• VA: A Private Road Maintenance Agreement is required.

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Blue Water Mortgage is licensed in New Hampshire, Maine, Massachusetts, Connecticut, Florida, and North Carolina.

To learn more about specific mortgage requirements, or to get help drafting a Private Road Maintenance Agreement, be sure to speak with an experience mortgage broker.