FHA, VA, USDA, and Conventional – What are the requirements when qualifying for a mortgage with a private road?
I received such a great response from last week’s post about how to qualify for a USDA loan on a private road, that I wanted to provide additional details for FHA, VA, and Conventional loans.
Remember now, it does not have to be a rural community to have a private road – so this video tip is a great resource for a variety of situations.
FHA, VA, USDA, & Conventional – What are the requirements when qualifying for a mortgage with a private road?
Here is a 1-2-3 formula for situations when the property is located on a private road:
#1. Call your local county roads & bridges department to confirm the exact type of road classification. Do not always assume that it is a private road just because it may be dirt or unpaved. Many counties have a variety of classifications for road types and it is always best to make the extra call and double check.
#2. Once you have confirmed it is a private road, make sure that the lender, bank, or broker handling the mortgage is experienced with private roads so they can properly determine what programs are available.
#3. Follow up with the closing attorney or title company handling the transaction to help determine the following:
A. Are there recorded easements such as one allowing right of way onto the property.
B. Is there a recorded private road maintenance agreement, which may be required depending on the type of mortgage.
Here is a tip on conventional loans, Fannie Mae will require a private road maintenance agreement, but Freddie Mac guidelines do not. Check with your lender if they are have ability to work with Freddie Mac programs.
* VA Loans will also require a recorded maintenance agreement
* FHA does not have this requirement
* USDA loans also do not have this requirement, but they have specific guidelines regarding the type of road which must be considered an all weather surface roadway.
Each and every transaction can be different, but this will provide you with a strong overview of the available programs and steps needed to close a successful transaction when the buyer is trying to buy a home located on a private road.
Keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert 2nd opinion.
Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the “Metroplex” difference!
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