Chris is an award-winning former journalist with 15 years of experience in the mortgage industry. A national expert in VA lending and author of “The Book on VA Loans,” Chris has been featured in The New York Times, the Wall Street Journal and more.
Updated on December 12, 2022 Veterans: Check your $0 down eligibility today! Expert ReviewedThe VA issued updated policy guidance on private roads and shared driveways in late November 2022.
Private road access agreements have long proved challenging for some Veteran homebuyers. These agreements are sometimes already covered by state law. Veterans could also request a waiver from the VA in cases where a joint maintenance agreement didn't exist.
The VA ultimately recognized the way these agreements can put undue burdens on Veterans, from creating additional expense and lengthening closing times to disadvantaging buyers in the marketplace.
As of Nov. 25, 2022, the VA no longer requires an ongoing maintenance agreement from a homeowners' association or a joint maintenance agreement among homeowners on a private road or shared driveway.
Moving forward, all that's needed is a recorded permanent easement or right-of-way to be placed in the loan file.
Here's our original story on VA loans and private roads:
Falling head over heels for a house makes the whole VA mortgage process worthwhile. But there are some important things to bear in mind if the object of your affection happens to be on a private road or a shared driveway. These aren't everyday properties, but they're certainly out there and can create a major headache for homebuyers.
Should you set your sights on a home like this, make sure you've got a solid understanding of the rules of the road, so to speak. Veterans purchase homes with shared driveways or on private roads every month. But they're not always a slam-dunk loan file.
Here's what you need to know.
Homes in the country are often the go-to example here. But there are private roads and shared driveways in communities across the country, both rural and urban. These are basically properties you access using a road that isn't owned by the state or county. It's common for multiple people to live on a private road.
For the sake of example, let's say you want to purchase a beautiful older country house. Government-owned roads don't quite get you to the property, so there's a private road that leads not just to the house you hope to purchase but to a half-dozen others. There's no snow plowing or pothole patching on a private road, at least not on the taxpayer dime. It's up to the people who live on it to handle maintenance, snow removal, mowing and any other issue that arises.
The same concept generally holds true for two properties that share a common driveway.
So what's the big deal? At issue is the VA's concern about your long-term access to the property. That means once you're under contract on the home, an independent VA appraiser is going to take a closer look at the legal status of that private road. Lenders may also want to have a clear picture of the property's legal access in case the borrower ultimately defaults on the loan.
The appraiser will typically be looking for two big things:
The first part doesn't usually pose much of a problem. There's often something already on file with the county, or a state statute covers the access. It's the second part that can prove much more problematic for the loan process (unless you're purchasing in California, Connecticut, Oregon or Vermont, which don't require private road agreements).
Purchasing a property that's covered by a Homeowners Association (HOA) may also provide relief from the private road issue. Different lenders can have different requirements. Generally, if the HOA maintains "common elements," no additional private road agreement or documentation is necessary because “common elements” are always assumed to include the street/roadway.
Much as you might wish, you can't force existing property owners to sign a private road agreement. One holdout can hold up and even ultimately quash your VA home loan. But, in some cases, VA buyers may be able to work with their lender toward a satisfactory resolution.
For example, if you're buying a home close to the public road, you may be able to take responsibility for the portion of the private road from your property to the public right-of-way. But if there are homes between yours and the public road, then you might all of those homeowners to sign a private road agreement.
These scenarios are always a case-by-case basis, so talk with your loan officer and your lender in more detail about your particular situation and what might be possible.
Chris Birk is the author of “The Book on VA Loans: An Essential Guide to Maximizing Your Home Loan Benefits.” An award-winning former journalist, Chris writes about mortgages and homebuying for a host of sites and publications. His analysis and articles have appeared at The New York Times, the Wall Street Journal, USA Today, ABC News, CBS News, Military.com and more. More than 300,000 people follow VA Loans Insider, his interactive VA loan community on Facebook.
About Our Editorial Process
Veterans United is recognized as the leading VA lender in the nation, unmatched in our specialization and expertise in VA loans. Our strict adherence to accuracy and the highest editorial standards guarantees our information is based on thoroughly vetted, unbiased research. Committed to excellence, we offer guidance to our nation's Veterans, ensuring their homebuying experience is informed, seamless and secured with integrity.
The VA funding fee is a governmental fee required for many VA borrowers. However, some Veterans are exempt, and the fee varies by VA loan usage and other factors. Here we explore the ins and outs of the VA funding fee, current charts, who's exempt and a handful of unique scenarios.
Can Your Mortgage Be Denied After Preapproval? Updated on April 15, 2024It is possible for you to get denied for a home loan after being preapproved. Find out why this may happen and what you can do to prevent it.
