The USDA Home Loan Program in NC adopted the HUD Handbook for Property Evaluations in 2009. With that adoption of the FHA minimum Property standards – the USDA Appraisers no longer need to calculate the additional insulation requirements USDA Loans traditionally required. The USDA Loan Private Road Agreement now needs to meet the FHA standards, so this is a bit of a change.
USDA Loan Private Road Agreement in North Carolina
USDA Loans are for properties that are traditionally considered “out in the country.” As such, it is not uncommon to find a property that has Well and Septic Systems, and dirt roads leading to the home.
To qualify for a USDA Loan, the roads leading to the property must be deeded in such a way that the home owner can access the property without trespassing on any another person’s land. That is to say that if there’s a private road that runs across another person’s property – you must gain permanent access to your property. This is typically done with a Private Road agreement, giving you access from a public street all the way through to your property.
The streets must meet a minimum standard of having an all-weather service construction. The USDA Loan Private Road Agreement must state exactly how the road is going to be maintained, how the cost of maintenance is going to be calculated and how the decision that the road needs to be “upgraded” is going to be determined. Typically, this means that everybody who is accessing the road is charged an annual fee, which is held in escrow until the road needs to be resurfaced.
An Attorney should be able to help you establish this – it will work in a similar fashion to a Homeowner’s Association. When you go to sell your home, the new owners must agree to the USDA Loan Private Road Agreement and the private maintenance agreement, it’s not optional. For the Bank to be able to make you a USDA Loan with a Private Road Agreement, the agreement must contain the language that the agreement transfers to the next owner, kind of like an easement from the Utility Company on your property.
Driveways must be “contiguous to” and have direct access from a street, road, or driveway. They must be constructed of a hard-surfaced or all-weather surface, which would mean road base and gravel at a minimum. This means that a “dirt” driveway into the home from the Private street would not be acceptable for USDA Loans.
If you are looking for a home in the country – here in NC, we think the USDA Loan program is probably the best. WHY? Because USDA Loans have no down payment requirements, and they have the lowest monthly PMI rates we can offer (unless you are a Veteran).
Call Steve and Eleanor Thorne, 919 649 5058 and we will love helping you with a USDA Home Loan! We do dozens of these across NC every month. You can get the latest information about Mortgage Rates in NC, connect with us on Facebook or Google Plus! Have more questions about your particular situation and USDA Loans Private Road Agreement in NC? Leave us a comment below!