Home Buying in 95757>Question Details

Cindy, Home Buyer in Sacramento, CA

Mello Roos

Asked by Cindy, Sacramento, CA Fri Apr 18, 2008

I was wondering if mello roos dues were paid monthly. I am currently in the process of purchasing a home in Elk Grove, CA and the realtor mentioned mello roos. I've heard that the mello roos dues are included with your property taxes and if that is the case, we'll have the taxes included with our mortgage payment. I'm hearing that it's $150.00 extra a month. I thought it was a year?? Does anyone know the approximate mello roo dues for Elk Grove, 95757 area? I'm thinking that $150.00 a month is wrong that it should be a year. I have friends that live in EG and their mello roos are 177.00 a year.

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4
James Tan’s answer
Hi Cindy,
I am a broker based in Elk Grove. Your realtor gave you correct information. Elk Grove's mello roos is pretty high. For example, a property in the Stonelake (a very desirable area) which is valued at approx. $280k, the total property taxes (incl mello roos) is approx. $4k+ per year. In the area south of elk grove boulevard and between franklin and bruceville, the mello roos is even higher. In this area a property of around $220k, the total property taxes (incl mello roos) is also in the $4k+ range per year.

Normally in other areas without Mello Roos, property tax is approx. 1.1%+ per year of the assessed value.
Most if not all the newer areas in Elk Grove have mello roos. There may be certain pockets, or newer homes for which the Builder had paid off the mello roos. That is an exception and not the rule.

But, really because of the Mello Roos, Elk Grove has one of the finest school districts in the Greater Sacramento area, with STAR ratings of 8 or 9 out of 10, statewide.

Hope that helps.
1 vote Thank Flag Link Fri Jan 6, 2012
Hello Cindy. You can go to the Sacramento tax assessor's website and look up the itemized property tax information which will include how much the Mello Roos special assessment is. If you don't have the assessor's parcel number, you can look up the property by property address on the assessor's website and once you have found the property you can just click on the ePropTax link which will take you the property tax information. Click on the direct levy link to access the info for special assessments. Once you are in the direct levy section, you'll also see a link to a page that will explain Mello Roos. I hope this helps.
0 votes Thank Flag Link Sat Apr 19, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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I posted this in reply to a question by another consumer last year (link #1):

" The interest rates for financing Mello-Roos levies as general obligation bonds are comparatively low. Such bonds are exempt from both state and federal income taxes on the interest they earn, and therefore are sold to investors as "tax-free muni bonds", with interest rates well below the going rate for residential mortgage loans. If the lump sum amount of a Mello-Roos bond were, for example, $11,000, the annual interest as a general obligation bond might cost the homeowner $495 at 4.5% annual interest rate as a "muni bond". However, for the very same amount, could cost $770 at 7% interest financed at regular market rates for mortgages. "


"After all is said and done, the final and only issue that a buyer needs to consider when deciding between a home located in a Mello-Roos District (or any other special assessment district, for that matter), and one that isn't, is: how much down and how much per month for an essentially equal home offering the identical value. If the monthly payment is the same for either, then it's a wash. Whether the payment is skewed toward high principal and interest, with lower taxes on one, or the payment is skewed toward lower principal and interest, with higher taxes on the other, it's still the same monthly payment"



Reference: 2. http://www.jimgrattan.com/misc/special_topics.htm

Reference #3 Mello-Roos as quoted from the California Tax Data Website:

http://www.californiataxdata.com/A_Free_Resources/faq.asp#faq_04

See the link #4 for a detailed description http://mello-roos.com/pdf/mrpdf.pdf
0 votes Thank Flag Link Sat Apr 19, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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Mello Roos taxes are paid at the same time as regular property taxes, so the payment is actually due 2 times per year. In calculating your loan qualification, the property taxes, HOA dues, insurance, and mortgage payments are added together to come up with the maximum monthly payment that you can afford.

If the taxes on a property are described as $150/month, it probably means the total is about $1800/year.

The amount of Mello Roos tax is set up while the development is being built. It is a decision that a builder makes about paying certain development fees in advance, or creating a Mello Roos tax that pays for those fees over time. The builder has to decide if it's better to sell homes for $300,000 with no Mello-Roos (because they paid in advance) or sell them for $275,000 and the buyer pays the difference over the next 20 or 30 years. Each development can be different so read all the disclosures to be sure you understand them!

There is a more detailed explanation of Mello-Roos taxes at the link below.
0 votes Thank Flag Link Fri Apr 18, 2008
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