Are you seeing “Mello-Roos” in Folsom listings and wondering how it affects your monthly payment? You are not alone. Buyers often ask how this special tax is calculated, where to find the exact number, and whether it ends. In this guide, you will learn what Mello-Roos is, where to see it in your paperwork, how to confirm the amount and term for a specific Folsom home, and how to budget with confidence. Let’s dive in.
Mello-Roos basics
Mello-Roos is a special tax collected by a Community Facilities District, also called a CFD, under the Mello-Roos Community Facilities Act of 1982. CFDs raise funds for public improvements and services by taxing parcels inside the district. In Folsom, this can apply to newer neighborhoods and certain planned communities.
The money can fund things like roads, water and sewer lines, parks, community centers, police or fire services, flood control, and sometimes school facilities or ongoing services. The specific uses are spelled out in the CFD’s formation documents and the engineer’s report.
CFDs are formed through a formal public process with voter or landowner approval. Many CFDs issue bonds to finance improvements. The bond debt is paid back through the special tax. Your parcel’s tax may be set as a flat amount, tied to lot size or square footage, or calculated by another formula in the district documents.
Duration varies. Some special taxes end when bonds are fully repaid. Others can continue for services. Many districts include annual increases, such as inflation indexing or a scheduled escalation. You will find the timing and any increase rules in the bond and CFD documents.
Where you will see it
On the MLS, you may see fields or checkboxes for “Special Assessment,” “Mello-Roos,” or “CFD.” Sometimes agents show a combined monthly figure with HOA dues and Mello-Roos together. Read the financial fields and agent remarks carefully so you know what the number includes.
On the property tax bill, Mello-Roos usually appears as a separate line item on the secured tax roll. You will see the CFD name or number and the dollar amount for that tax year. If unpaid, penalties and liens generally follow normal property tax rules.
In escrow, the preliminary title report often references recorded special tax liens or bond liens. The title and escrow team can pull the parcel’s tax bill history. Seller disclosures may or may not call out a CFD, so do not rely only on the disclosures. Confirm with documents from title and the county.
HOA dues are usually separate from Mello-Roos. If an HOA has a relationship to a CFD, that should be explained in the HOA documents, but this is less common.
How to find your exact amount and term
Start with the property’s APN, which is the Assessor’s Parcel Number. Use the APN to look up the parcel on Sacramento County tax portals. You can view the current secured tax bill and see the CFD line item and annual levy for that year.
Key local sources to check:
- Sacramento County Assessor or Tax Collector for parcel lookups, tax bill line items, and payment history
- Sacramento County Recorder for recorded CFD formation documents, the engineer’s report, and bond documents
- City of Folsom Finance or Development Services for lists or maps of CFDs that serve subdivisions in city limits
- Title or escrow for the preliminary title report, recorded notices of special tax liens, and any bond maturity details
- HOA management or the seller’s packet for tax bill copies and references to any CFD
The documents that contain the details you need include the engineer’s report attached to the formation resolution, the bond official statement that shows debt service and maturity, and the annual tax roll entries that show the current levy. These tell you exactly how the tax is calculated, whether it can increase, and how long it is expected to last.
Confirm the following for the specific parcel:
- Exact annual dollar amount or formula used
- Whether the amount can increase, such as CPI indexing or set escalation
- Whether a bond funds the CFD and the bond maturity date
- Billing method, usually on the secured property tax bill
- Whether the amount varies by lot type, size, or use
- Any pending changes or proposed additional bonds
A quick monthly estimate is simple. Take the annual levy from the tax bill and divide by 12. For example, if the current levy is $2,400 per year, the monthly cost is $200. Include that number in your monthly housing budget.
Budgeting, lending, taxes, and resale
Treat Mello-Roos as an additional housing cost. Add the annual special tax to your other costs and divide by 12 to see a monthly estimate. When you compare homes, look at HOA dues and Mello-Roos separately and verify whether a listing has combined them into one figure.
Lenders include special taxes when they calculate your qualifying ratios. Your lender may require the Mello-Roos to be escrowed each month, just like regular property taxes. Ask your lender how they will handle it and how it affects your monthly payment and reserves.
Tax deductibility depends on the nature of the assessment and current tax rules. Do not assume that a Mello-Roos charge is deductible. Speak with a qualified tax professional about your situation.
Resale and appraisals can be affected. Higher recurring assessments reduce affordability for some buyers, which can narrow the buyer pool when compared with similar homes that do not have a CFD. Appraisers and buyers commonly account for recurring special taxes when looking at value and comparables.
Amounts vary in Folsom. There is no single “typical” number. The size of the bond, the scope of improvements, whether services are funded, your parcel size or type, and the age of the development all influence the levy. Older CFDs may be closer to bond payoff, which can change the long-term outlook, but always verify the actual maturity date in the documents.
Buyer checklist
At listing or first contact:
- Ask if the property is inside a CFD or subject to Mello-Roos. Get the CFD name and number.
- Ask for the current annual amount and whether the listing shows it monthly or annually.
- Request a breakdown if HOA dues and Mello-Roos are combined.
During offer and escrow:
- Request the seller’s most recent property tax bill showing the Mello-Roos line item.
- Ask for the preliminary title report and recorded CFD documents, including the engineer’s report, formation resolution, and any official bond statements.
- Confirm whether the tax is billed on the secured property tax bill or invoiced directly, and who pays when.
- Ask title if there are any additional special tax liens or pending assessments.
With your lender and tax advisor:
- Ask your lender if they will escrow the Mello-Roos, and how it impacts qualifying ratios and reserves.
- Ask your tax professional how the assessment may be treated for your federal and state returns.
Negotiation ideas:
- If the levy is high or set to increase, consider requesting concessions, a price adjustment, or time to model future levies.
- Consider how known sunset dates or expected payoff could affect long-term costs and resale.
Before closing:
- Verify the final payable amount for the closing year and confirm the buyer and seller proration per the contract and escrow instructions.
Folsom and Sacramento resources
Who to contact locally:
- Listing agent or seller for the current tax bill
- Title or escrow for recorded liens, CFD names and bond maturity dates
- Lender for underwriting and escrow treatment
- Tax professional for deductibility questions
- Sacramento County Assessor or Tax Collector for parcel bill details and APN lookups
- Sacramento County Recorder and City of Folsom Finance for official CFD documents
Useful documents to request:
- Most recent secured property tax bill
- The district’s engineer’s report and any bond official statements
- HOA resale certificate or disclosures if applicable
Smart decision-making tips
- Verify at the parcel level. Two homes next door can have different levy amounts or terms. Do not rely on neighborhood averages.
- Compare total monthly costs. Weigh similar homes in and out of CFDs by modeling principal and interest, the 1 percent ad valorem property tax, insurance, HOA, and Mello-Roos.
- Consider the timeline. A bond that pays off in a known year can change your long-term cost of ownership. Confirm the bond maturity in writing.
- Keep documents handy. Save the tax bill, title report, and CFD documents in your file. These help with budgeting, insurance escrow, and future resale.
If you want help reviewing a Folsom property’s tax bill, title report, and CFD documents, our team is here to guide you through the details and model the monthly impact with you. Reach out to Brian Perry & Brian Perry Real Estate Group to get started.
FAQs
What is Mello-Roos in Folsom real estate?
- It is a special tax levied by a Community Facilities District to fund public improvements and services, often shown as a separate line item on the secured property tax bill.
How do I find Mello-Roos on a Sacramento County tax bill?
- Look for a separate line with the CFD name or number on the secured property tax bill for the parcel’s current tax year.
Will my Mello-Roos ever end in Folsom?
- It may, if tied to bond repayment that has a maturity date, but some CFDs continue for services. Check the bond documents and engineer’s report.
Does Mello-Roos affect my mortgage approval?
- Yes. Lenders include recurring special taxes in your housing cost and may require monthly escrow of the amount.
Is Mello-Roos tax deductible in California?
- It depends on the nature of the assessment and current tax rules. Ask a qualified tax professional about your specific situation.
Who can help verify a Folsom property’s CFD details?
- Your title or escrow officer, the Sacramento County Assessor and Recorder, City of Folsom Finance, and your real estate agent can help you obtain and review the documents.
