Does Fnma Mae Require a Private Road Maintenance Agreements

When it comes to purchasing a home, there are many factors that potential buyers need to consider. One of these factors is the state of the roads within the neighborhood or property. Private roads, particularly those that are not maintained by the local municipality, can pose a potential problem for buyers as they may require extra costs and agreements to maintain. In this article, we take a closer look at private road maintenance agreements and whether Fannie Mae (FNMA) and Freddie Mac (FMAC) require them.

Private roads refer to roads located within a development or property that is not maintained by the local municipality or government. These roads can be the responsibility of the homeowners` association or the property owners themselves. When buying a property with a private road, buyers need to ensure that the road is in good condition and that there is an agreement in place for its maintenance. This is where private road maintenance agreements come in.

A private road maintenance agreement is a legally binding document that outlines the responsibilities of the parties involved in the maintenance and upkeep of a private road. It includes provisions for the payment of costs related to road maintenance, such as snow removal, pothole repairs, and landscaping. It also establishes the party responsible for overseeing the maintenance and enforcement of the agreement.

Now, back to the question at hand – does FNMA or FMAC require private road maintenance agreements? The short answer is yes. According to the Fannie Mae Selling Guide, properties with a private road must have a legally enforceable private road maintenance agreement. The agreement must require each property owner to pay their fair share of maintenance costs and provide for the ongoing maintenance of the private road.

Freddie Mac has similar requirements for private road maintenance agreements. According to the Freddie Mac Single-Family Seller/Servicer Guide, the private road must be maintained by a formal association or an agreement among the property owners. This agreement must include provisions for maintenance responsibilities and the allocation of costs.

In summary, if you are planning to purchase a property with a private road, it is essential to ensure that there is a legally binding private road maintenance agreement in place. This not only protects the value of your investment but also ensures that the road is maintained, safe, and accessible. Remember to check with your lender and review the FNMA and FMAC guidelines before closing on your property.