In 2010 Fannie Mae And FHA began underwriting and approving loans for mixed use residential (condos) and commercial development. The problem was cities were having none of it. Now,
Understanding Mello Roos
When you begin the hunt for a home, as a buyer you expect to pay property taxes. That's a given. What you might not expect is, with the passing of Prop 13 in the 70s, the cap on property taxes has severely limited the funds available to local governments, thus calling for other forms of funding. In 1982 when builders were constructing many new communities in undeveloped areas, the Mello-Roos Community Facilities Act was established to provide additional tax money to finance the necessary public facilities to service these new communities.
These funds are typically determined based on the square footage of the property and are paid in excess of the 1 percent property tax allowed by Prop 13. These funds are determined before the house is built and are used exclusively to pay for public services such as police, public schools, fire departments, libraries, parks, and roads.
The public agency involved will issue tax-exempt bonds to pay for these services over a period of 20-40 years. The amount of the tax may only increase a maximum of 2 percent per year and it may decrease if more funds become readily available to reduce bond indebtedness.
If you purchase a home in a community with Mello-Roos, you may have the option to pay the additional tax in full at the time of purchase. This doesn't just apply to residential homeowners. Commercial and industrial property owners may also be subject to Mello-Roos. Non-payment of the Mello-Roos tax subjects you to the same penalties as non-payment of property taxes. For further questions regarding Mello-Roos tax, contact your local County Assessor's office for more information.
An Orange County native and Team Manager of The Kurt Real Estate Group with a heavy background in both Marketing and Transaction Coordinating, Liz has handled it all - from listings to buyers, from t....