A master-planned community near the Mercedes outlets is selling faster than expected. Here’s why

Just outside the city of Mercedes, about two miles north of Interstate 2, there are plans for 527 single-family homes in the new 94-acre master-planned community of Los Prados, which is a project of Rhodes Enterprises and under construction by Esperanza Homes. 

The $45 million project in Hidalgo County — roughly halfway between McAllen and Brownsville — sits near the longtime Rio Grande Valley Livestock Show grounds, the Simon Property Group-owned Rio Grande Valley Premium Outlets and the future Shops at Mercedes, a retail development under construction. 

The first phase of the Los Prados project, which sits near Baseline Road and Mile 9 Road, is estimated to have about 55 lots, about 15 of which have been pre-sold this summer, an attorney who represents the developer told the Hidalgo County Commissioners Court in early July. 

“The development has been going extremely well. The first phase of horizontal construction has been completed. Houses are being constructed as we speak. There’s been 15 homes pre-sold, and closings are scheduled by the end of this month for next month [August],” Jeffrey Earl, an attorney at Earl & Associates P.C., told commissioners.

The firm had an office in McAllen, and Earl represents the Los Prados developer. 

So far, Los Prados has “done better than anticipated with all the presales”, Earl said. “Due to the success, we wanted to have the ability to issue [public improvement district] bonds in the future — not today, obviously, but we want to restructure how we’re doing the assessments so that PID bonds can become available at a later time. Sometime next year would be the target date.” 

That means Rhodes Enterprises would issue municipal-style bonds — but they would not be guaranteed by Hidalgo County, the city of Mercedes, or its citizens. Those bonds come at lower rates than corporate bonds. For repayment, homeowners in the Los Prados subdivision will be levied an annual flat fee for those public amenities, and that fee does not increase over time. 

For example, in the first phase of the project, the outstanding principal bond would be $635,000 at an interest rate of 6%, Hidalgo County records show. When split among all 55 homeowners, the cost would be about $254 per unit. The interest on that would amount to $815, in addition to a $540 fee for the maintenance assessment, and an additional $430 for administrative expenses.

That means, in total, homeowners would be responsible for $2,040 in annual installment payments for their portion of the infrastructure costs for roads, water lines, the sewer system, drainage, sidewalks, and landscaping.

“It just gives us the ability to use those assessments for bonds rather than just reimbursement, so that will help accelerate the project and offer more of these types of projects in the future,” Earl said. 

The Rhodes development business model typically includes land outside city limits but within the extraterritorial jurisdiction of the community, and a tax increment reinvestment zone deal, or TIRZ. The way it works is that developers pay for infrastructure up front and are later reimbursed through higher property taxes paid on the higher land value. That’s the case for Los Prados, too. 

The developer’s request was approved by Hidalgo County commissioners on July 7, allowing the commissioners to issue future bonds to accelerate the Mercedes project. The city expects to annex the subdivision into its boundaries in the future. 

McAllen-based Rhodes Enterprises is a vertically integrated developer with more than 7,000 acres of master-planned developments across South Texas. It was co-founded by Mike and Lori Rhodes, but about a decade ago, their son, Nick Rhodes, took over daily operations and expansion efforts. 

Now Rhodes operates Esperanza Homes as its builder, Stonewood Home Lending and Valley Affordable Mortgage as the financing arms, a rental home division known as Rhodes Living, and Rhodes Property Management and Rhodes Home Service for management and maintenance of both the master-planned communities, for homeowners and renters alike. 

Years ago, Rhodes Enterprises even operated the internet provider for these properties. Mike, the founder, previously said the company was built because existing companies refused to invest in the infrastructure for communities in the Rio Grande Valley. So he ran the dark fiber from the tallest building in McAllen, Chase Tower, to use for internet service. The internet company, Solstar Network, has since been sold to Greenfield Communications. 

Each year, the Rhodes group of companies facilitates more than 800 single-family home sales, according to its website. The title company used by the Los Prados development is San Jacinto Title Services, an independent business with an office in McAllen. 

Most of the Rhodes-developed single-family homes are being sold on the market for more than $200,000 — that’s higher than what the median household income in the Rio Grande Valley can afford. 

The Los Prados development is considered a workforce housing development in terms of price point. 

It’s slightly more expensive than affordable housing projects for low- to moderate-income households, but still below the median. There is a preference given to first-time homebuyers, public sector employees, teachers, nurses, veterans, active-duty military members, and critical public service professionals. 

Los Prados also leverages the TIRZ reimbursement from Hidalgo County to provide a $15,000 first-time homebuyer down-payment assistance grant toward the purchase of homes starting at $173,000 —up from the previously estimated $159,000. The homes already constructed and listed on the developer’s website are currently priced closer to $179,900. 

The grant is offered as a zero-interest loan that is forgivable after three years, provided the homeowner uses the property as their primary residence. The homes are customizable, with three or four bedrooms, two bathrooms, and 1,000 to 1,400 square feet. The developer expects to build a park, basketball courts, and walking trails inside the community. 

The income cap for eligibility in the downpayment assistance program is 180% of the Hidalgo County area median income — or $115,200. That could mean two adults earning about $50,000 each, a stay-at-home spouse with children, and a working spouse earning about $80,000, or any similar breakdown. 

If the homes cost $173,000, a 30-year mortgage at a 6.5% interest rate would mean an average monthly payment between $1,100 and $1,300 before taxes and insurance, which is $150 to $450 more each month. The potential cost of the public improvement district fee could be about $170 a month.

In total, that’s roughly the cost of a new three-bedroom apartment or townhome rental in the McAllen-Edinburg-Mission metro area, but slightly lower than a single-family home rental, and it doesn’t include maintenance costs or public improvement district fees. 

Home affordability is a major concern across the Rio Grande Valley, and there are fewer homes in the $150,000 to $200,000 price range than there were in the past decade. 

In May 2026, 62 homes at that price point were sold across the McAllen-Edinburg-Mission metro — down 16% over the year with a median price of $175,500. There are about 505 homes listed in that range, with about 8 months of inventory, spanning about 1,300 square feet, built in 2001 as of May. 

In general, there are more homes for sale above $200,000 than below it in the local metro area, the data show. 

Officials say that’s the purpose of projects like Los Prados, which target the missing middle class.