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Mello Roos property tax California/real estate qualifying news mortgage loans investment real estate home making communities

 

California Mello-Roos Property Tax

 

Mello-Roos was signed into law in 1982 as a way to gain funding for new communities after Proposition 13 inhibited the raising of property taxes in California.  Though it isn’t technically a property tax, it is an additional tax that is applied to properties in newly developed areas.  The money is used to build the necessary facilities, utilities, roads, and the like for new towns.  This keeps the cost of development for the new town on the shoulders of the persons living there.

 

Because Mello-Roos is independent of the property tax that is protected by Prop 13, communities in need of new facilities like schools, public parks, and even roads can impose Mello-Roos to raise the tax income from that community to fund the construction and maintenance of those facilities.

 

The Mello-Roos “special tax” is administered as a bond.  This bond is connected to the properties in the affected area and are bought and sold with the individual houses.  So when buying a house, be sure to check to see how much the previous owner still owes on the bond.  Some of them don’t expire at all and are essentially just additional property taxes.

 

One of the most significant ways this can affect a buyer is when they try to get a loan for a house that has a Mello-Roos tax on it.  The monthly payment on the bond is taken into account the same way that an HOA due is.

 

Mello-Roos can have a meaningful impact on a mortgage application. Dan Parisi CEO of Coffee Real Estate has the knowledge to help you find the best mortgage loan possible. Find out what implications Mello-Roos has on your ability to get a loan for free.

Dan Parisi (DRE 01923081 NMLS 997987) is a licensed mortgage loan originator. Call of email him for mortgage information.

 

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