Picture this: you’ve found the perfect home and it’s located in a beautiful, secluded setting. You’re ready to make an offer but the property you want to buy is located on a private road. Now you’re wondering, what are the rules for buying a home with a VA loan when there’s a private road? Buying a home with a private road or shared driveway using a VA mortgage is possible, but there are some critical factors you should be aware of. Below, we’ve discussed the matter in detail.
Private Roads & VA Loans: What You Need to Know
Private roads and shared driveways are not uncommon, especially in rural settings. And it’s only natural that some veterans would want to settle down in the quiet countryside after a busy military career. Regardless, the VA has strict policies when it comes to these types of properties. This scrutiny is not only to ensure the current state of the property but also to address potential issues in the future, especially in case of borrower default.
During the purchase process, an independent VA appraiser scrutinizes the private road’s legal standing. The appraiser focuses on two key components:
- Legally Recorded Easement: The appraiser will want to verify that there is documentation regarding the right-of-way from the property to a public roadway. This legally recorded easement safeguards against future challenges related to access, preventing scenarios where the property could become inaccessible or “landlocked.”
- Private Road Agreement: The appraiser looks for a signed agreement among all residents using the private road. This agreement outlines responsibilities for ongoing maintenance, ensuring the road remains in good condition. It serves as a preventive measure to address concerns about safety, habitability, and property value over time.
Considerations & Property Requirements
Other factors can affect your eligibility for buying a home with a private road with a VA loan. This includes the nature of the private road and the VA’s guidelines at the time of your loan application. Here are some important aspects that borrowers should be aware of:
- Property Requirements: The property you want to purchase must meet the VA’s Minimum Property Requirements (MPRs). If the private road poses issues related to safety, accessibility, or the overall habitability of the property, it might not meet the MPRs.
- Access to the Property: The VA typically requires that the property be easily accessible. If the private road provides adequate access and meets the VA’s requirements, it may not be a problem. However, if the private road is in poor condition or not easily accessible, it could be a concern.
- Maintenance and Agreements: The VA may require that the private road be adequately maintained, and there may need to be agreements in place among the property owners regarding maintenance responsibilities.
- Title Issues: The title of the property should be clear, and there shouldn’t be any issues related to the private road affecting the property’s ownership.
It’s important to note that VA loan requirements and guidelines may change, so it’s advisable to contact a VA-approved lender for the most up-to-date information. Additionally, working with a real estate agent or mortgage professional experienced in VA loans can be beneficial, as they can guide you through the process and help you understand any specific requirements related to private roads in your situation.
Always consult directly with a VA-approved lender or the U.S. Department of Veterans Affairs for the most accurate and current information regarding VA loan eligibility and requirements.
Have Questions? We’re Here to Help!
Do you have questions about property requirements for buying a home with a VA loan? We’d be more than happy to assist you! Call today to speak to a VA mortgage expert!