What are Special Assessments and Mello Roos?
Filed under: Temecula Real Estate
A common theme among home buyers is that they don’t want to pay any Mello Roos, and when I hear someone talk about this topic I often wonder if they really understand what Mello Roos are. It is important to understand these terms, and how they might impact the home buying process.
What is Mello Roos?
Mello Roos is in place because of the Community Facilities Act that was passed in 1982 by the California State Legislature, and they are essentially bonds or loans that were taken out by a developer. For example, a developer might express interest in building some homes in a specific city, and the city might have specific requirements that need to be met for the homes to be built in that area. These requirements might include things such as street lights, roads, gutters, water, utilities, and other things that are required for the neighborhood.
The city often requires a developer to pay for these costs, which means that the builders will take out a loan to pay for these items. Then, the cost is handed down to the home owners who will be buying the homes in the area. Special assessments or Mello Roos are just loans that were taken out by the builder, and then passed to the home owners. Most newer communities, and some of the older communities might have Mello Roos taxes.
What to Expect
Typically, these loans are paid off within 25 – 30 years, although you will need to talk with the tax collector for full details about the payoff term. In Temecula, many of the homes in this area either had Mello Roos or special assessments at one time, or they currently have these loans. So, it is important to consider these factors when you are going through the process to buy a home.
By working with a trusted real estate agent in Temecula, you can easily navigate all aspects of purchasing a home. Do you have additional questions about Mello Roos or any other aspect related to real estate purchases? Watch the video above for more answers and give me a call! I will gladly answer your questions. Contact me by calling: (951) 473-0390