Thinking about a new home in Folsom Ranch and keep seeing “Mello-Roos” pop up? You are not alone. Many buyers pause at this line on a tax bill because it is different from the regular property tax. The good news is that once you understand how Mello-Roos works here, you can budget with confidence and compare lots and builders the right way.
In this guide, you will learn what Mello-Roos is, how the tax is calculated for Folsom Ranch parcels, where to find the exact amount for a specific home, and how to estimate its effect on your monthly payment. Let’s dive in.
What Mello-Roos funds
Simple definition
Mello-Roos is a special tax created by a Community Facilities District, often called a CFD, under California law. In new communities, CFDs help fund public infrastructure and services such as roads, parks, schools, utilities, and public safety facilities. The local agency can issue bonds, and the special tax paid by properties inside the CFD repays those bonds over time.
Who pays and for how long
If a home sits inside a CFD, the owner of that parcel pays the special tax. The obligation stays with the property when it sells. The tax usually continues until bonds are paid or the district eliminates the charge. Many CFDs last for decades, so it is important to review the CFD’s documents to understand timing and any future changes.
How it relates to regular property tax
Mello-Roos is separate from the standard 1 percent base property tax and any local voter-approved charges. Think of it as an additional line on your bill. Tax deductibility can be complex. You should consult a tax professional for advice on your situation.
How Mello-Roos is calculated in Folsom Ranch
Rate and Method basics
Each CFD publishes a Rate and Method of Apportionment, often called the RMA. The RMA sets the parcel categories, the special tax formula, and any annual increase rules. Common approaches include:
- A fixed amount per parcel by land-use category.
- A tiered schedule based on lot size or home square footage.
Many RMAs allow annual increases, either a fixed percentage or a consumer price index up to a cap. Most districts also state a maximum tax and then levy the amount needed each year for debt service, which can be below the maximum in some years.
Why amounts vary by lot
Folsom Ranch is a large, master-planned area with multiple phases. It is normal to have more than one CFD operating at the same time, sometimes overlapping for different purposes. Your annual special tax depends on:
- Which CFD or CFDs your parcel is in.
- The parcel type assigned in the RMA.
- The current year levy versus the maximum.
- Any approved annual escalators applied since formation.
Because of these variables, two homes on the same street can have different Mello-Roos amounts.
Where to get the exact number
To confirm the amount for a specific Folsom Ranch home, gather the following:
- The Sacramento County property tax bill for the parcel using its APN or address. Look for the CFD special tax line item.
- The current year special tax schedule from the CFD tax administrator, which lists parcel categories and annual levies.
- The CFD formation documents and RMA from the City of Folsom’s public records.
- Builder or seller disclosures, the Preliminary Title Report, and recorded tract maps that identify applicable CFDs.
Always verify the current year levy for the exact APN you are considering.
Where it shows on tax and loan documents
On the Sacramento County tax bill
On the annual bill, Mello-Roos appears as its own line item. You may see labels such as “CFD [Number or Name] Special Tax,” “Community Facilities District Special Tax,” or sometimes “Special Tax” next to the district name. The bill lists the 1 percent base tax, other voter-approved charges, and then special taxes and parcel charges. The special tax amount shown is the total for the current tax year.
You can pay the bill in two installments each year. If your lender impounds taxes, the Mello-Roos amount is included in your monthly escrow.
On closing and lender paperwork
Your Closing Disclosure will include recurring taxes and may call out special taxes. The Preliminary Title Report often references the CFD formation documents and helps confirm the district name. Builders and sellers in California must disclose known special taxes, and lenders include the annual special tax amount when calculating your monthly escrow and qualifying ratios.
How collection works monthly
Most CFDs place the special tax on the county tax roll. If your mortgage has an impound account, your lender will collect one-twelfth of the total property taxes, including Mello-Roos, with each monthly payment.
Estimate your monthly payment impact
A quick 4-step method
Find the annual Mello-Roos amount for the parcel.
Add it to the rest of the annual property taxes.
Divide the total annual taxes by 12 to get the monthly escrow.
Add monthly P&I, homeowners insurance, HOA dues, and any mortgage insurance to see your total monthly housing cost.
Example: lower special tax (hypothetical)
- Purchase price: $700,000
- Estimated mortgage P&I: $3,600 per month
- Regular property tax at 1.1 percent: $7,700 per year, about $642 per month
- Mello-Roos: $2,400 per year, about $200 per month
- Homeowners insurance: $100 per month
- HOA: $200 per month
- Total estimated monthly housing cost: $4,742
Example: higher special tax (hypothetical)
- Same home, Mello-Roos: $5,000 per year, about $417 per month
- Adjusted total estimated monthly housing cost: $4,959
These side-by-side examples show how the special tax can change your monthly budget by a couple hundred dollars.
Qualification and DTI tips
Lenders count Mello-Roos as part of your property taxes for qualification. Ask your lender to use the actual current year amount for the parcel you want, not a rough estimate. This helps you avoid surprises during underwriting.
Using calculators effectively
Any standard mortgage calculator can work. Enter your loan information, add total annual property taxes that include Mello-Roos, then divide by 12 for the monthly amount. If the calculator has an “other monthly costs” line, you can place the Mello-Roos portion there.
Due diligence checklist for Folsom Ranch
Use this list to stay organized as you compare neighborhoods, builders, and lots:
- From the listing agent or builder:
- Names of applicable CFD or CFDs for the lot
- Current annual special tax for the parcel or parcel type
- The RMA and any annual adjustment rules
- The maximum authorized special tax and the current year levy
- From title and escrow:
- Preliminary Title Report referencing CFD documents
- Closing Disclosure that shows how taxes will be impounded
- From the county and city:
- Sacramento County tax bill for the parcel, current and prior years if available
- City of Folsom CFD formation documents, maps, and public notices
- From the CFD tax administrator:
- Current year special tax schedule or parcel roll
- From your lender:
- An underwriting estimate that includes the actual special tax in your monthly escrow and DTI
- Advisors:
- A tax professional for guidance on potential deductibility
- A real estate attorney for questions about bond terms and payoff provisions
Smart buyer tips for Folsom Ranch
- Compare parcels, not just floor plans. The same model on a different lot can carry a different Mello-Roos amount based on its RMA category.
- Look at escalation rules. Some RMAs allow increases each year, often tied to CPI or a fixed cap. Plan your budget with this in mind.
- Check current versus maximum. A district may levy below the maximum in early years. Understand the ceiling and how it could change.
- Confirm impounds with your lender. Make sure your monthly escrow includes the correct special tax amount.
Next steps
If Folsom Ranch is on your short list, get the exact figures for any lot you are considering. With the right documents, you can compare apples to apples and make a confident offer.
Have questions about a specific parcel or builder disclosure? Reach out to The Friedrich Team for local, one-on-one guidance on Folsom Ranch new construction and Mello-Roos details. We will help you pull the right documents, verify the current levy, and model the monthly payment so you can move forward with clarity.
FAQs
What is Mello-Roos in Folsom Ranch?
- It is a special tax charged by a Community Facilities District to fund infrastructure and services for the community, in addition to your regular property taxes.
How do I find my Folsom Ranch Mello-Roos amount?
- Check the Sacramento County property tax bill for the parcel, the CFD’s current tax schedule, and builder or title disclosures that list the applicable district and levy.
Why do two similar Folsom Ranch homes have different special taxes?
- Parcels can sit in different CFDs or fall into different RMA categories tied to lot size or home type, which changes the annual amount.
Will my Folsom Ranch Mello-Roos increase each year?
- Many RMAs allow annual increases, often a fixed percentage or CPI-based up to a cap. Review the specific RMA for your parcel.
Is Mello-Roos part of my monthly mortgage payment?
- Usually yes. If the special tax is on the county tax roll and you have an impound account, your lender collects it monthly with your property taxes.
Can a seller pay off Mello-Roos at closing in Folsom Ranch?
- Most CFDs are ongoing special taxes tied to bonds, not a balance that can simply be paid off. Some districts may have payoff provisions. Confirm with escrow and the CFD administrator.
How does Mello-Roos affect my loan qualification?
- Lenders include the annual special tax in your monthly property tax escrow for DTI. Using the exact current year amount helps avoid surprises.
Ready to talk through a specific home or lot in Folsom Ranch? Connect with The Friedrich Team for responsive, local guidance and a clear plan to your next home.
