Seen an extra line on a Folsom property tax bill labeled “Mello‑Roos” and wondered what it means? You are not alone. Many Folsom neighborhoods use this special tax to fund local infrastructure and services, and it can impact your monthly payment and resale plans. This guide explains, in plain English, what Mello‑Roos is, how it works in Folsom, and how to confirm the amount and timeline for any home. Let’s dive in.
What Mello‑Roos means in Folsom
Mello‑Roos refers to a special tax levied within a Community Facilities District (CFD) formed under California’s Community Facilities Act of 1982. Cities form CFDs to finance public facilities and certain services that support growth and development.
In Folsom, CFDs have commonly funded new‑development needs like roads, sewer and storm drainage, water facilities, parks and recreation amenities, public safety facility contributions, and in some cases ongoing services such as parks maintenance. Each CFD’s allowable uses are set in its formation documents.
How the tax works
- A CFD issues bonds or collects a pay‑as‑you‑go special tax to fund projects. The CFD then levies an ongoing special tax on properties in the district to repay the obligation or fund services.
- The special tax is a lien on the property. It appears as a separate line on your Sacramento County property tax bill, apart from the 1 percent base property tax under Proposition 13.
- The amount is not a standard ad valorem property tax tied only to assessed value. Each CFD sets a formula in its Rate and Method of Apportionment. That formula may be a fixed amount, unit‑based, have an assessed‑value component, or a combination.
- The CFD’s legal documents also define any annual escalators, like a fixed percentage or CPI adjustment, and the duration of the obligation. Taxes generally continue until the bonds or obligations are paid or an end date specified in the CFD documents is reached.
Buyer impacts to plan for
Buying a home with Mello‑Roos can be a smart move if the overall value fits your goals, but you should plan for the added cost and timeline.
Budget and mortgage qualification
Lenders usually treat Mello‑Roos like other recurring property‑tax‑type obligations. The annual amount is included when they calculate your housing expense, escrow requirements, and debt‑to‑income ratio. Expect your monthly escrow to include the Mello‑Roos amount listed on the tax bill.
Predictability and term
Some CFDs allow the special tax to increase each year by a set percentage or CPI. The tax may last for years or decades depending on bond maturity or the CFD’s statutory term. Reviewing the CFD’s Rate and Method and bond documents helps you estimate both the long‑term cost and the end date.
Resale considerations
Special taxes vary by neighborhood and parcel. Higher annual amounts can influence marketability and a buyer’s willingness to pay a premium. Understanding the dollar figure, escalation, and remaining term helps you price and negotiate with confidence when it is time to sell.
Smart buyer moves
- Ask for the most recent tax bill and confirm the current Mello‑Roos amount.
- Request the CFD name/number and Rate and Method of Apportionment.
- Have your lender confirm how the tax will be treated in underwriting and escrow.
What sellers should know
Selling a home in a Folsom CFD is straightforward when you prepare.
Disclosures and compliance
Sellers must disclose any special assessments and CFD membership. Expect to reference Mello‑Roos in your Transfer Disclosure Statement and other required forms. Your MLS listing and preliminary title report should align with those disclosures. Clear, early disclosure helps you avoid legal risk and keeps buyers confident.
Pricing and negotiation
In price‑sensitive markets, significant special taxes can influence what buyers will pay. Some sellers address this by setting pricing expectations accordingly or offering credits toward closing costs. Discuss strategy early so you can position your listing thoughtfully.
Prepayment questions
Some CFDs allow prepayment or redemption of the special tax for a parcel, but not all do. When it is allowed, it often requires meeting specific conditions and paying a premium. The only way to know is to review the CFD’s legal and bond documents.
Potential tax deductibility
Whether Mello‑Roos payments are deductible depends on the nature of the charge and current tax rules. Because deductibility varies, consider speaking with a tax professional for your specific situation.
How to check a Folsom home for Mello‑Roos
You can confirm the presence and cost of Mello‑Roos quickly by following these steps:
- Request the most recent property tax bill. Look for a separate special tax line item associated with a Community Facilities District.
- Review the preliminary title report. Title reports often list CFD liens or assessments under exceptions.
- Ask for the CFD details. Request the district name/number and the current levy schedule from the seller or listing agent.
- Obtain the Rate and Method of Apportionment. This document shows how the special tax is calculated, any annual escalator, and the maximum tax.
- Check the county’s tax records. The Sacramento County Tax Collector’s property tax search can show current and historical charges.
- Review bond documents on the MSRB’s EMMA site. Official statements outline maximum tax amounts, escalation rules, and bond maturity dates. You can search by district name using the MSRB EMMA portal.
- Contact the City of Folsom. The City’s finance or public works team can provide maps, levy schedules, and contacts for the CFD administrator.
What to look for in CFD documents
- Rate and Method of Apportionment. How the tax is computed for each parcel and whether it can increase annually.
- Maximum vs. current levy. The tax levied today may be below the maximum allowed.
- Escalation language. Whether the tax can rise by a fixed percent, CPI, or other method.
- Term or maturity. When the tax is scheduled to end, often tied to bond payoff.
- Prepayment clauses. Whether and how a parcel can prepay, including any required premium.
Practical checklists
Buyer checklist
- Obtain the most recent property tax bill showing the CFD line item.
- Review the preliminary title report and note any CFD references.
- Ask the seller or listing agent for the CFD name/number and current levy schedule.
- Request the CFD’s Rate and Method of Apportionment and formation documents.
- Look up bond official statements and continuing disclosures via the MSRB EMMA portal.
- Confirm with your lender how the CFD will be included in underwriting and escrow.
- If long‑term cost is a concern, review escalation language and the expected end date.
Seller checklist
- Disclose CFD membership and the current annual levy in required forms.
- Provide recent tax bills and any homeowner information about the CFD.
- Coordinate with your title company to confirm any recorded liens and ensure disclosures match the title report.
- Gather the CFD Rate and Method and any bond summaries you have for buyer review.
Local context in Folsom
Folsom includes a mix of established neighborhoods and newer, master‑planned areas. CFDs are commonly used in newer growth areas to fund infrastructure and amenities tied to development. Not every neighborhood has Mello‑Roos. Amounts and terms differ by subdivision, by phase of development, and by the CFD’s formation date. Because details vary, the most reliable picture for any specific property comes from the tax bill, title report, CFD documents, and official City and County resources.
A calm path forward
Mello‑Roos does not have to be confusing or stressful. With the right documents in hand, you can see the current annual amount, understand any escalator, and estimate the expected end date. That clarity helps you budget confidently, structure your mortgage correctly, and negotiate with facts.
If you want a local, white‑glove approach to navigating Mello‑Roos in Folsom, reach out to Mercedeh Sheik for a private consultation. You will get practical guidance on the documents to request, how lenders treat the tax, and how to price or write offers with confidence.
FAQs
What is Mello‑Roos on a Folsom tax bill?
- It is a special tax levied by a Community Facilities District to fund public facilities and specified services, listed as a separate line item on your county property tax bill.
How do I find the Mello‑Roos amount for a Folsom home?
- Check the current Sacramento County property tax bill, review the preliminary title report, and ask for the CFD’s Rate and Method; these show the present‑year charge and how it is calculated.
Does Mello‑Roos affect my mortgage payment and approval?
- Lenders typically include the annual CFD amount when calculating your monthly escrow and debt‑to‑income ratio, which can affect qualification and monthly payments.
How long will I pay Mello‑Roos in Folsom?
- The term depends on the CFD’s legal documents; special taxes usually continue until bonds are repaid or until an end date specified at formation.
Can I prepay or buy out a Mello‑Roos tax?
- Some CFDs allow parcel prepayment or redemption under set conditions and a potential premium; check the CFD’s bond and Rate and Method documents to confirm.
Is Mello‑Roos the same as HOA dues or base property tax?
- No. It is a separate special tax in addition to the 1 percent base property tax and is distinct from any homeowners association dues.