Home Buying in Indio>Question Details

Stephanie, Other/Just Looking in Coachella Valley, CA

What are HOA's and Mello Roos? And what does that affect?

Asked by Stephanie, Coachella Valley, CA Fri Jun 27, 2008

I am a first time home buyer and wanted research some information. I see some homes have HOA's and/or Mello Roos. First of all, what are they? And how would they affect me if I bought a home with one or the other? I would like to know the pro and cons,

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Stephanie, HOA fees are considered Home Owner's Association fees and they are required based on community where you purchasing your home. HOA's support the community by creating by-laws that could encompass some of the following: Color of Homes, Yard Maintenance, Community Common Area Maintenance and the like. Since you will be paying HOA fees on a monthly or quartely basis depending on the community structure those fees will go towards maintaining the community in order to keep continuity between owners and maintain property values.

The Mello-Roos Community Facilities Act of 1982

The Act allows any county, city, special district, school district or joint powers authority to
establish a Mello-Roos Community Facilities District (a “CFD”) which allows for financing of
public improvements and services. The services and improvements that Mello-Roos CFDs
can finance include streets, sewer systems and other basic infrastructure, police protection,
fire protection, ambulance services, schools, parks, libraries, museums and other cultural
facilities. By law, the CFD is also entitled to recover expenses needed to form the CFD and
administer the annual special taxes and bonded debt.

Why is a Mello-Roos CFD Needed?

A CFD is created to finance public improvements and services when no other source of
money is available. CFDs are normally formed in undeveloped areas and are used to build
roads and install water and sewer systems so that new homes or commercial space can be
built. CFDs are also used in older areas to finance new schools or other additions to the
community.

Hope that helps...good luck...

Felix Gonzalez
Sandals Realty
1 vote Thank Flag Link Fri Jun 27, 2008
Hello Stephanie
Let me tell you the pros and cons of buying a house that has HOA's and Mello Roos. First of all not every community that has HOA's has Mello Roos. HOA's are Homeowners Associations, they are there to help take care of the community. Like getting the bad people out of the neighborhoods, fixing up the streets, common areas of the development. The taxes are usually less than if the community has Mello Roos.

With respect to Mello Roos fees they are in some developments not all. When one takes a hit on value, so do all the neighbors. It helps pay the funding for new schools, sidewalks, common areas. Some communities doesn't have Mello Roos because everything was paid up at the beginning from the builder.
Mello Roos is added into your taxes and this is because the builder and the city negotiate the plan. You only have to pay mello roos until the community is built out. Which could take approximately 10-20 years.

I hope this has been helpful if not call me and I would be glad to discuss this further with you.
Jackie Bone
Tarbell, Realtors
0 votes Thank Flag Link Sat Nov 15, 2008
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