first time buyer (with a VA loan) looking for a wondering what a "Mello-Roos" is?

Asked by 4shawna, San Diego County, CA Fri May 10, 2013

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Mike Stone’s answer
Mike Stone, Agent, Carlsbad, CA
Thu Nov 28, 2013
Mello Roos is a California state assessment, that goes toward developing the infrastructure in the surrounding community where a home is bought. Mello-Roos funds provide principal and interest payments for services, which include maintenance for streets, water, sewage, electricity, infrastructure, schools and parks. Mello-Roos is commonly imposed on new community infrastructure, like schools and roads.
Many buyers draw a line in the sand, and say, that they don't want to look at homes that have Mello Roos tax. But, one should look at the bottom line. What will the payment be? Some times homes without Mello Roos are higher priced per square foot. And, some have HOA fees. The only way to compare apples to apples is to compare the monthly payment.
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Michael Ford, Agent,
Sat Aug 17, 2013
some additional info for you.

in the early years of mello-roos many issues were pre-payable even after the bond was issued. if the property ownere wanted to eliminate the fee they could with a single cash payment. many bond holders didn't like that feature as the issues were well paying to the bondholder. pre-payable issues are rare now

in any housing development the developer can elect to pay for the infrastructure (curbs, gutters, sidewalks, etc) or pass the costs on to the buyers of the properties by way of a bond issue. the lifetime cost of the bond issue is always far more than the cost if the developer simply paid the fees. they choose not to because the fees must be paid as cash...and developers are cheap. years back, in a small 10 home cardiff tract where i sold a home the developer could have paid about $3,400 per door and had no mello roos. he instead tagged the owners with a ten year $110 monthly fee. the math is as follows. $3,400 up front or $13,200 over the ten can see why the folks that bought the bonds wanted the non-pre-payable version.
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David Rudd /…, Agent, San Diego, CA
Sat Aug 17, 2013
The answers below answer pretty well what Mello Roos is. In short, it will add to your monthly housing expense (just like HOA). Typically, most newer (post 2000) developments in the San Marcos area will have Mello-Roos (named after the Senators that brought us it). Mello-Roos can very dramatically from community to community and is typically higher in the neighborhoods that offer the residents the most (all new schools, great parks, own fire department, etc).

I often get clients that want newer but refuse to pay for Mello-Roos. There answer is difficult, and like most home searches involves trade offs. You may find new and no Mello-Roos further out, closer to rural. Fallbrook, Valley Center and Ramona to name a few.

Best of luck in your search - you are asking great questions!

David Rudd
Kindred Real Estate
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Uriah Anders…, Agent, Palm Desert, CA
Sun Jun 16, 2013
Sometimes properties with Mella Roos are priced lower than ones without Mella Roos. It's good to compare the overall payment of both Mella Roos non Mella Roos properties to see which one works best for you. Feel free to give me a call with any questions.


CA Dept of Real Estate Broker's License #01303991
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Cindy Davis, Agent, San Diego, CA
Fri May 10, 2013
Mello Roos is an additional property tax placed on new home deveopments. It is paid for x number of years and used to pay for new infrastructure such as schools, parks, hospitals, fire stations, libraries, etc.

Do you need any assistance with your home search? If so, please give me a call!

Cindy Davis
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Steven Ornel…, Agent, Fremont, CA
Fri May 10, 2013
Hi 4shawna,

You now have your definition of Mello-Roos. As you search for properties you will likely want to know the amount of Mello-Roos, if any; and additionally, any other of the roughly 20 Direct/Special Assessments common in CA.

The process of investigation for determining the construction of your tax bill for an individual property, including whether there's any Mello-Roos, is covered below:

"Estimating Property Taxes in CA"

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, ,
Fri May 10, 2013
There are several factors that you should know when considering the purchase of any property. First what is the tax rate?. Next if there are any Mello Roos (bonds that the city or county is holding on the property because the Builder wanted to sell a cheaper home), special assessments (special bonds for schools, fire, police, infrastructure etc.) and of course HOA. All these are Public Record and should be researched before buying any home. Hope this help. Let me know if you have any questions regarding financing this or any other home.

Best of Luck!
Web Reference:
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Rashard Scott, Agent, San Diego, CA
Fri May 10, 2013
As Nathan pointed out earlier, these are other fees that the buyer would pay similar to HOA fees. I am in the military but also work as a Realtor and would love for the opportunity to assist you with your home purchase.

Most of my clients are military, so I also work closely with VA Lenders as well. Thank you for your time and I look forward to hearing from you soon!


Rashard Scott
Keller Williams Realty
CA DRE# 01703306
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Nathan Plount, Agent, Carlsbad, CA
Fri May 10, 2013
They are essentially community development funds. When community projects such as sewer systems, fire stations, etc. need to be built, the cost for building these things is transferred to the home owners in the community whom are identified as benefitting from these community projects. The term Mello-Roos comes from the last names of the law makers who inacted the bill. Mello-Roos function similar to bonds, and are paid back over a set period of time.
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