Mortgage Lender Serving McKinney, TX

Not every McKinney address is inside the McKinney city limits. The city's annexation FAQ says a resident outside the city limits pays county tax, school district taxes and, in some cases, an emergency services district tax, and that a city property tax would be added on annexation.

The McKinney area also includes special financing districts. The city's website names three common types: municipal management districts, municipal utility districts and public improvement districts, and notes that residents repay the cost of improvements through additional assessments or taxes on top of the taxes levied by the city, county and school district. It lists the Honey Creek Municipal Management District, approved on September 17, 2024.

McKinney MUD 1 is a concrete example. The district's own site says it is an approximately 876-acre residential community in Collin County within McKinney's extraterritorial jurisdiction, that it levies a property tax on all property in the district based on appraised value to repay its bonds, and that it exists until the city annexes the area. A MUD tax is on top of the other taxes on the bill.

Under Fannie Mae's Selling Guide, which many conventional loans follow, monthly housing expense includes real estate taxes, special assessments and owners' association dues. A district tax or assessment raises that number, which can lower the loan amount you qualify for at a given income.

Texas law also puts a disclosure duty on the seller. For a property in a water district such as a MUD, the seller must give written notice before a binding contract is signed, and the buyer may terminate if the notice is not timely. For a PID, Section 5.014 of the Texas Property Code requires a separate written notice to the purchaser. Ask for the notice early and send us a copy.

McKinney's Historic Overlay District was established in the 1980s and is governed by the city's Unified Development Code. The city requires a Certificate of Appropriateness before work on a property in the district that is visible from the public right-of-way, including alteration, change of materials, expansion and demolition. The city also has a Historic Neighborhood Improvement Zone program, and properties in the zone may be eligible for certain exemptions on City of McKinney taxes.

If you are buying in or near the district and plan exterior changes, confirm the approval requirement and timeline before you finalize a renovation budget. It affects how much cash you keep in reserve and whether a repair belongs in the purchase price negotiation.

The City of McKinney names McKinney ISD, Allen ISD, Frisco ISD, Melissa ISD and Prosper ISD as districts it works with on school safety, and it publishes a public school districts document and map. Because the boundaries cross city lines, confirm the district for a specific address with the district itself. Each one is a separate taxing unit, so the district is one input to the tax estimate.