How a Private Road Maintenance Agreement Could Save Your Mortgage
In the picturesque landscapes of New England, privacy is a premium commodity. Winding driveways that disappear into the woods or unpaved lanes leading to secluded lakeside retreats are often the stuff of real estate dreams.
However, for many homeowners in Massachusetts, these private roads hide a financial liability that can surface at the worst possible moment: the closing table.
We reviewed our experiences with clients and researched this topic to get a better idea of what’s at stake. Here’s what you need to know.
“Someone Should Really Do Something About That Pothole”
Many homeowners operate under the assumption that if a road is open to travel, either by neighbors or others, then someone is responsible for fixing it. In most cases, this is true, and it’s usually the town or municipality that bears responsibility.
However, this is a dangerous misconception. Thousands of Massachusetts residents live on “private ways” where the municipality has no obligation to plow snow, fill potholes, or repair collapsed drainage.
It is actually the owners’ responsibility to maintain private ways. If the road is only used by a single property, then the responsibility falls to the owner of that property. However, when it’s used by multiple properties, things get more complicated.
For buyers and current owners alike, the absence of a formal Private Road Maintenance Agreement (PRMA) can turn a routine mortgage application into a conundrum. Worse, it can leave you financially exposed to catastrophic infrastructure failures that you didn’t anticipate.
The “Cliff” Conundrum: A Real-World Nightmare
To understand the severity of this issue, consider a scenario we once encountered at GoldCoast Mortgage. We think it illustrates a “perfect storm” of liability and leverage.
Imagine a private roadway in a hilly town, winding its way up a steep elevation. Running alongside a portion of this road is a destabilized cliff.
Over decades of New England freeze-and-thaw cycles, the cliff face has begun to erode. This has undermined the structural integrity of the road itself. If the road collapses, the cost to engineer and repair the slope could easily run into the hundreds of thousands of dollars.
Now, consider the two neighbors involved:
- The “Upstream” Owner: They live at the beginning of the road, safely before the cliff. They have perfect access to their home and are in no physical danger from erosion. Currently, they pay $0 toward the cliff’s stability.
- The “Downstream” Neighbor: They live past the cliff. To access their home, the road must remain stable. They need to refinance their mortgage or perhaps even sell the property just to fix the cliff road.
Here is where the trap snaps shut. To approve a loan for the Downstream Neighbor, most lenders require a recorded Private Road Maintenance Agreement signed by all parties sharing the road. This document forces neighbors to share the costs of repairs.
The Upstream Owner refuses to sign. Why? Because these agreements are not merely handshake deals, and signing would make them liable for repairs to part of a road that they don’t even use.
Robust maintenance agreements often grant the road association the power to place a lien on a homeowner’s property for unpaid assessments. That was the case in one HOA Declaration of Trust agreement we reviewed from Nantucket.
If the Upstream Owner signs, they aren’t just volunteering to pay; they are potentially giving their neighbor the legal power to foreclose on them if they refuse to fund 50% of a massive cliff stabilization project.
The Downstream Neighbor is stuck. Without the agreement, their property is effectively unfinanceable for most buyers. They cannot sell, and they cannot refinance.
Massachusetts vs. Maine: A Tale of Two Statutes
Part of the reason this standoff exists is due to the lack of a specific legal framework for PRMAs in Massachusetts.
According to the Massachusetts Municipal Association (MMA), private ways are entirely outside the scope of municipal responsibility. While towns can vote to do temporary minor repairs for public safety, they are prohibited from using public funds for significant capital improvements on private land (PDF).
Furthermore, Massachusetts has no “default” statutory mechanism that automatically forces neighbors to contribute to road maintenance in the absence of a written contract.
There are some exceptions. According to Massachusetts General Law Chapter 40, Section 6C, towns can vote to appropriate snow and ice removal funds for “private ways open to the public.” However, this is not mandatory.
Maine Requires Owners to Share Costs Equally by Default
Contrast this with our neighbors to the north. Maine has recognized that private roads are a critical part of the housing infrastructure and has legislated a solution.
Maine Revised Statutes, Title 23, Section 3121 outlines a clear process for “Private Ways.” It explicitly states that in the absence of a written agreement, road association, or covenant, residential property owners “shall share equally in the cost of reasonable and necessary repairs and maintenance” when the road is their primary access.
If our “Cliff Scenario” were taking place in Maine, the Downstream Neighbor could rely on this statute. The law effectively becomes the maintenance agreement, mandating that the Upstream Owner contribute their equal share regardless of whether they want to sign a contract.
The statute even provides a mechanism for neighbors to bring a legal claim for payment. In Massachusetts, no such statutory safety net exists.
The Scale of the Private Road Maintenance Problem
This is not a niche issue affecting a handful of rural cabins. The problem is systemic.
Many Massachusetts Towns Are Affected
One report by GBH found that in Worcester, there are some 80 miles of private roads that residents are required to maintain. Most residents say doing so is just too expensive.
You may wonder, “Why did they buy these homes without intending to maintain the roads?”
Residents often buy homes assuming the city maintains the street, only to find out after a harsh winter that they are on the hook for plowing and repaving. Worcester officials said many of the roads were built over a century ago, “when landowners could divide their properties into new lots and streets,” and there were no requirements that the roads meet certain standards.
Private Road Maintenance Agreements Must Be Legally Binding
Real-world agreements can also become bureaucratic nightmares. For example, a simple subdivision of a property can trigger the need for complex legal amendments.
One agreement we reviewed, out of Ipswich, required a formal amendment just to adjust the cost-sharing math from one-fourth to one-fifth after a lot was split. These layers of legal complexity can be navigated, but they may scare off potential buyers and even lenders.
The Financing “Switch”: Fannie Mae vs. Freddie Mac
For borrowers caught in this dilemma, the difference between getting a loan and being rejected often comes down to which set of guidelines the lender uses.
Fannie Mae is strict. It generally requires a legally enforceable Private Road Maintenance Agreement signed by the neighbors. If you are the Downstream Neighbor in our cliff scenario and your lender is trying to sell your loan to Fannie Mae, the deal is dead.
Freddie Mac, however, offers a lifeline. Per Guide Sections 5605.4 and 4702.4(e), Freddie Mac does not typically require a signed maintenance agreement, provided that:
- There is a statutory obligation for maintenance (which MA lacks), OR
- There is a permanently recorded easement granting ingress and egress to the property.
In many cases, an experienced mortgage broker can “switch” the loan application from a Fannie Mae product to a Freddie Mac product. As long as the deed shows a permanent right of way (easement), Freddie Mac will often accept the loan without the neighbor’s signature on a maintenance agreement.
This “Freddie Fix” works for Conventional Conforming loan amounts. For 2026, the FHFA set the limits at:
- $832,750 for most of Massachusetts, New Hampshire, and Maine. (You can see if your county is an exception through this interactive map.)
- $962,550 for high-cost areas, including Eastern Massachusetts and Southern New Hampshire counties (excluding Barnstable).
The Jumbo Trap: When You Can’t “Switch”
The strategy hits a hard wall once you enter “Jumbo” territory (loans exceeding the limits above).
Jumbo loans are funded by risk-averse private investors. They are likely to look at the Cliff Scenario and see a high level of collateral risk. Unlike Freddie Mac, almost every Jumbo investor will demand a signed, recorded PRMA.
This creates a “Jumbo Trap.” If the Downstream Neighbor’s home is worth $1.5 million, the Freddie Mac strategy is likely off the table. They are locked out of the mortgage market, able to sell only to a cash buyer willing to inherit the risk.
Navigating the Road Ahead
The complexity of private roads—from simple shared driveways to elaborate Homeowner Associations with lien powers—requires diligence.
- For Buyers: Check for a recorded agreement immediately. Understand that “sharing costs equally” is standard in written agreements, but without one in MA, you have zero leverage to make your neighbor pay.
- For Sellers: Address this before you list. Establish an agreement when tensions are low.
- For Homeowners: Don’t wait for the cliff to crumble. If you share a driveway, you share a financial destiny. Creating a formal agreement now can prevent the “incalculable costs” that destroy property values later.
We’re constantly exploring how different scenarios affect mortgages, because we believe our clients should have as much information as possible. If you have a question or a story to tell, don’t hesitate to contact us today.