A California real estate agent is explaining how Proposition 13 interacts with Mello-Roos taxes to a buyer. The buyer's property is in a Community Facilities District. Which statement is correct?
Correct Answer
D) Mello-Roos taxes are separate from the Prop 13 base tax and can change according to the terms of the CFD bond
Mello-Roos taxes are voter-approved special taxes levied by a Community Facilities District (CFD) and are entirely separate from the Prop 13 base tax. They can increase or decrease according to the terms of the CFD formation documents and are not subject to Prop 13's 2% cap.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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