Have you spotted a “Mello‑Roos” or “CFD special tax” line on a Folsom home’s tax bill and wondered what it means for your budget? You are not alone. Many great neighborhoods in Folsom use this financing tool, and it can change your monthly payment more than you think. In this guide, you will learn what Mello‑Roos is, how to find it on Sacramento County tax bills, and a simple way to estimate the monthly impact so you can compare homes with confidence. Let’s dive in.
What Mello‑Roos means for buyers
Mello‑Roos is the common name for special taxes authorized by the Mello‑Roos Community Facilities Act of 1982. Cities, counties, or special districts can form a Community Facilities District, also called a CFD, to fund public improvements and some services. These can include roads, parks, water and sewer facilities, school and fire protection facilities, and certain ongoing services.
Here is the key point. The CFD usually issues bonds to pay for the improvements. The debt service is repaid through a special tax on properties inside the district. That special tax is a lien on the property. It is separate from the basic 1% Proposition 13 property tax.
Each CFD sets its own formula. Some charge a flat amount by parcel type. Others use square footage, lot size, or an index such as CPI. The charge typically continues until the bonds are paid off or until the district’s authorization ends. Some districts have a set expiration. Others run until the bonds are retired.
Mello‑Roos is different from other local charges you might see. It is not an HOA due, a Landscape and Lighting assessment, or a voter‑approved parcel tax. It is its own special tax category. If you buy a home in a CFD, you take on that tax obligation. Prepayment options exist in some districts but are specific to the district and are not common in a typical sale.
How it shows on Sacramento County tax bills
Where to find the charge
On Sacramento County’s secured property tax bill, CFD or Mello‑Roos taxes show as separate line items. You may see names like “Community Facilities District,” “CFD,” “Special Tax,” or the district’s formal name. The standard 1% ad valorem tax and any voter‑approved items will appear on other lines. The CFD is additive.
If a CFD has more than one component, such as a bond repayment plus a services levy, you may see more than one line or a single combined amount depending on county billing practices. The bill will show the annual dollar amount charged to your parcel for that year.
Timing and payment flow
CFD taxes follow the county’s standard secured tax timeline with two installments each year. If you escrow taxes with your lender, the lender typically includes the CFD amount in your monthly escrow payment. That means the special tax affects your total monthly housing cost.
How to verify for a property
You can confirm whether a specific parcel is in a CFD and the current charge through several sources. Check the seller’s most recent secured tax bill. Review MLS remarks and fields that note “Mello‑Roos” or “CFD.” Look at the preliminary title report for recorded CFD liens. You can also contact the Sacramento County Assessor or Treasurer‑Tax Collector, and the City of Folsom finance department for the district name, rate schedule, and calculation method.
Where Mello‑Roos appears in Folsom
Folsom has seen steady planned development over the past few decades. Many newer subdivisions and master‑planned areas use CFDs to fund front‑end infrastructure such as roads, utilities, and parks. That said, not every newer home is in a CFD. Some neighborhoods rely on other funding tools.
The takeaway is simple. Always verify the status for each property. Use the MLS, the seller’s Transfer Disclosure Statement, the tax bill, the preliminary title report, and city or county records to confirm.
Estimate your monthly payment impact
Use this quick method to see how Mello‑Roos can change your monthly cost.
- Find the annual CFD amount for the parcel. Sources include the tax bill, MLS listing, seller disclosures, preliminary title report, or county offices.
- Add the annual CFD to the home’s regular ad valorem property taxes.
- Divide that total by 12 to estimate the monthly tax escrow.
- Add that number to your principal and interest, HOA dues, mortgage insurance, and utilities to see the full picture.
Hypothetical examples
- Example A. Ad valorem taxes: $4,000. Mello‑Roos: $600. Combined annual taxes: $4,600. Estimated monthly tax portion: $383.
- Example B. Ad valorem taxes: $6,000. Mello‑Roos: $2,400. Combined annual taxes: $8,400. Estimated monthly tax portion: $700.
- Example C. Ad valorem taxes: $7,000. Mello‑Roos: $4,800. Combined annual taxes: $11,800. Estimated monthly tax portion: $983.
Actual amounts vary by property and by CFD. Some districts adjust annually using an index. Others step down or remain stable. Review the district’s rate schedule so you know what to expect over time.
What to check before you write an offer
- Ask the listing agent and seller if the property is in a CFD and request the current annual special tax amount in writing. A copy of the most recent tax bill is best.
- Review the MLS fields and agent remarks for “Mello‑Roos,” “CFD,” or a noted dollar amount.
- Read the seller’s Transfer Disclosure Statement. Special assessments should be disclosed.
Due diligence during escrow
- Obtain the most recent secured property tax bill. It will show the actual CFD charge for the last year.
- Review the preliminary title report. Recorded CFD liens and bond information are disclosed on title.
- Contact the Sacramento County Assessor or Treasurer‑Tax Collector, or the City of Folsom finance department, to confirm the district name, parcel status, and the formula used to calculate the tax.
- Read the CFD public documents if you want deeper clarity. Formation documents and rate schedules explain how the tax works and whether it increases with an index.
Mortgage and closing implications
- Lenders include special taxes in debt‑to‑income calculations and escrow estimates. A higher annual CFD can reduce how much you qualify for compared with a similar home without the tax.
- Provide your lender with the CFD amount early. Ask for a tax escrow estimate that includes the special tax so you can see your real monthly payment.
Negotiation considerations
- Treat Mello‑Roos as a recurring cost in your affordability plan. You can negotiate purchase price or ask for a seller credit to offset a high special tax.
- Some districts allow prepayment or redemption of the special tax obligation. This is specific to the district and often requires significant funds. It is not a typical negotiation item and should be handled through title and escrow if pursued.
After you buy
- Expect a separate CFD line item on your annual tax bill. If you escrow taxes, you will also see the effect in your monthly escrow account.
- Keep the CFD documents with your closing papers. They outline schedules, index rules, and any expiration dates.
Quick comparison tips
- If you are weighing two similar homes, include each home’s annual CFD amount in your monthly payment estimate. A slightly higher list price with a lower or no CFD can have a similar monthly cost to a lower‑priced home with a higher CFD.
- Look at the trend. If the CFD is indexed, plan for gradual changes year to year.
- Confirm whether the district has a scheduled expiration or a step‑down. That can change long‑term costs.
When you understand how Mello‑Roos works in Folsom, you can make cleaner comparisons and more confident offers. If you want a local, disciplined process to verify the numbers and align your budget, get in touch with Ryan Grob for buyer representation and clear guidance.
FAQs
What is Mello‑Roos in California real estate?
- It is a special tax authorized by the Mello‑Roos Community Facilities Act of 1982, collected within a Community Facilities District to fund public improvements and certain services.
How do I find Mello‑Roos on a Sacramento County tax bill?
- Look for a separate line labeled “Community Facilities District,” “CFD,” “Special Tax,” or a district name. It appears in addition to your basic 1% property tax.
Do all new Folsom homes have Mello‑Roos?
- No. Many newer master‑planned areas use CFDs, but not all developments do. Verify for each property using the tax bill, MLS, title report, and city or county records.
How does Mello‑Roos affect my mortgage qualification?
- Lenders include special taxes in debt‑to‑income and escrow calculations. A higher CFD can reduce how much you qualify for compared with a similar home without the tax.
Can a seller pay off Mello‑Roos at closing so I avoid it?
- The special tax is tied to the property. Permanent removal requires a district‑specific prepayment or redemption, which is uncommon. Seller credits can offset cost but do not erase the tax going forward.
Is a CFD tax deductible on my income taxes?
- Deductibility depends on the nature of the charge and current tax law. Consult a qualified tax professional for advice.
How long do Mello‑Roos taxes last?
- They typically continue until the district’s bonds are paid off or until an authorized expiration date. Some districts index or adjust amounts over time.
