Are you looking for the requirements of the FTA road maintenance contract? You`re in luck! This credit program does not require a private road maintenance contract. In case of ownership interest, protection by a permanently registered easement or when an HOA owns and maintains the road, the agreement is not necessary. Normally, every street would have one. The credit rules of the FTA are again quite clear on this issue. « The lender must confirm that the property has safe access for pedestrians and appropriate access for vehicles from a public or private road. Roads must be either dedicated to public use and maintenance or preserved as private roads protected by permanently registered services. « Since an important part of the directive is whether the road is public or private, the type of surface is not always a determining factor. USDA accurately reflects FTA requirements. USDA Guaranteed Loans require that private roads be protected by a permanent registered easement or that the road be maintained by a HOA. This credit program does not require proof of a private road maintenance contract. Remember that you must meet the USDA eligibility requirements to finance your home with this type of loan. Well, as soon as you know it`s a private road, think about this: the example above isn`t that scary, but what if you find a home in a small community, on a rural circular road, or on a gravel/non-fortification road? Often there is no association and an agreement for road maintenance is rare.
Fannie Mae speaks in more detail on this topic. It requires a legally enforceable agreement for road maintenance. The agreement should contain the following provisions and it should be noted: a few time bombs are deep in the process of buying houses, which can explode unrepromed in the last hour. Such a dreaded request at the last second looks like: « Please send us the private maintenance contract for this road. » Too often, there is no street maintenance contract. Then the fear starts with the idea of putting 40 property owners on the street to sign an agreement within the next 24 hours. The closure on time is then in danger. If you are a real estate agent or mortgage lender, you have experienced it. However, what many do not know is that FHA, USDA and conventional credits under Freddie Mac do not require a road maintenance contract, but only proof of permanent registration of entry and exit services. The agreement on these must be more than a handshake In fact, FHA does not need a road maintenance contract.
HUD Manual 4000.1 states that « private roads, including common entrances, must be protected by permanently registered services, shares of ownership or be owned by and maintained by an association of owners (HOA). Common entrances do not require a common maintenance contract. Public housing agencies that offer accounting assistance or subsidies usually follow the first mortgage guidelines. If you are using a first FHA mortgage with DPA, priority should be given to FHA road maintenance policies. But there is a solution! Even if it`s not as good as if all property owners sign an agreement. Therefore, if not all owners sign, the buyer could sign an individual private road maintenance contract.