Question 1

What do Waco's impact fees add to a new single-family construction budget?

Accepted Answer

Budget up to $4,500 per unit in city impact fees on a standard 3/4 inch meter, on top of permit fees. That's $1,000 for water, $2,000 for wastewater, and up to $1,500 for roadway, all collected at the time of building permit under Ordinance 2020-793. The fees phased in fully as of June 2025, so a permit pulled today pays the full amount. A larger meter scales the water and wastewater pieces fast: a 2 inch meter runs $10,670 in water and $21,340 in wastewater before the roadway fee.

Question 2

Does the lot's location change what I pay in Waco roadway impact fees?

Accepted Answer

Yes, and the swing is real money: roadway service areas 5 and 8 charge $0.00 per single-family unit, while most of the city charges $1,500.00. Areas 4 and 6 sit in between at $828.80 and $755.20, and area 1 is $19.20. Water and wastewater impact fees apply even in the extraterritorial jurisdiction, but roadway fees apply only inside city limits. The service-area boundary maps are on the city's impact fee page; confirm which area your specific lot falls in before you budget the roadway line, since the map itself was not something we could verify street by street.

Question 3

Is there a lower-cost permit path for an ADU in Waco?

Accepted Answer

Yes: the city waives the building permit fee entirely for an accessory dwelling unit built to a City of Waco pre-approved plan. Outside that path, an ADU permits at $0.50 per square foot, higher than the $0.35 per square foot rate for a standard new residential structure. Trade permit fees (electrical, plumbing, mechanical) still apply either way. If you're adding a second door on an existing lot, ask Development Services whether your plan set qualifies for the pre-approved list before you price the build.

Question 4

Does building near Baylor trigger extra requirements in Waco?

Accepted Answer

It can, if the work counts as a "substantial renovation" under the College and University Neighborhoods overlay. The threshold is a ratio of renovation cost to appraised building value: 30% above $200,000 in appraised value, 40% between $100,000 and $200,000, and 50% below $100,000. Roof, HVAC, electrical, plumbing, foundation, and rotten-wood repair are excluded from that ratio. Cross the line and the project must add one parking space per bedroom, a ten-foot pedestrian way, landscape screening, and meet the overlay's height limits and architectural review. This applies to substantial renovation and new development inside the overlay; the exact street-by-street boundary of CU Zones 1, 2, and 3 is kept on file at the city and was not something we could confirm for a specific address.

Question 5

What tax rate should I underwrite for a new build inside Waco city limits?

Accepted Answer

Plan on about 2.2484 per $100 of assessed value with no homestead exemption available to an investor. That's the county rate of 0.334805, McLennan Community College at 0.131974, City of Waco at 0.755000, and Waco ISD at 1.026600, added together. McLennan County proposed a 6 cent increase to 0.394805 for tax year 2026, so don't underwrite a flat tax line on a multi-year hold. Confirm the ISD on your specific parcel's appraisal district account before finalizing carry costs, since city limits and school district boundaries aren't the same thing here.

Question 6

Do Waco's up-to-$4,500 impact fees sit inside the cost basis you lend against?

Accepted Answer

Yes, and plan on covering about 15% of that total cost yourself. We fund up to 85% of cost, capped at 70% of value. On a $500,000 all-in Waco build that is up to $425,000 from us and $75,000 from you (500,000 x 85% = 425,000), drawn against the build schedule rather than advanced up front. Put the city's impact fees inside that cost number before you run it: up to $4,500 per unit on a standard 3/4 inch meter, and far more on a larger meter. Loans go up to $5,000,000 on 12 to 24 month terms. Subject to underwriting.

Question 7

Do you check credit on a Waco construction loan?

Accepted Answer

We run credit, but there is no minimum score on this program. A ground-up loan is asset-based, so the land, the budget, and the draw schedule carry far more weight than a score would at a bank. Weaker credit is usually answered with lower leverage rather than a decline, and there is no hard credit pull to start. You will not be asked for W-2s or pay stubs either. Subject to underwriting.

Question 8

I have never built spec in Waco. Which local line does a first pro forma usually leave out?

Accepted Answer

The roadway impact fee, and yes, a first build still gets funded. Experienced builders can access higher leverage inside the up to 70% LTV and 85% of cost range, and a first build sizes more conservatively. Bring a real budget and a real schedule, and put the local lines in it. Roadway impact fees alone swing from $0.00 per single-family unit in service areas 5 and 8 to $1,500.00 in six of the city's eleven roadway service areas, which is exactly the line a first pro forma tends to leave out. Subject to underwriting.

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