What Is a MUD?
A MUD is a special-purpose district that issues bonds to fund infrastructure (roads, water, sewer, drainage) for new developments. You pay those bonds back through an additional tax levy - typically 0.75% to 1.5% of your assessed value.
- ✓Common in: Celina, Prosper, Forney, Midlothian, Anna, Melissa - anywhere with rapid new construction
- ✓Less common in: established cities like Plano, Richardson, Garland (already have city infrastructure)
7 Red Flags in the MUD Disclosure
Look for these in the mandatory Texas MUD notice:
- ✓Total outstanding bond debt per lot (over $30K is high)
- ✓Current MUD tax rate above 1.0% of assessed value
- ✓Multiple overlapping districts (some areas are in a MUD + a PID + a SID)
- ✓No estimated date for bond payoff (some run 30+ years)
- ✓Developer still controls the MUD board (hasn't transitioned to homeowner control)
- ✓"Subject to change" language on the tax rate with no cap
- ✓Adjacent undeveloped land that could trigger additional bond issuances
Full Guide Contents
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Full guide includes: annotated sample MUD disclosure with callouts, a list of every active MUD in Collin/Denton/Ellis counties, and a calculator comparing total cost of ownership inside vs. outside a MUD.
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