Why do so many new communities have CDD fees

If you are shopping for a new home in the Central Florida area, you have probably come across the term CDD or Community Development District. 

What is a CDD?

CDDs are a local, special-purpose government framework authorized by Chapter 190 of the Florida Statutes, and are an alternative to municipal incorporation for managing and financing infrastructure required to support development of a community.

What does that mean? 

It means the developer has essentially taken a loan to develop the community, including roadways, infrastructure, and any amenities the community may have, and they are paid back over a period of typically 30 years, and are divided among the homeowners in the particular community the CDD covers and is based on lot size. 

Why do so many new communities have CDD fees?

The reason so many new communities have CDD fees is because the developers have the option to borrow the money to develop the community instead of paying out of pocket the hundreds of thousands if not millions of dollars it costs to build a new neighborhood.

How are CDD fees paid?

CDD fee's are billed yearly with your property taxes, but unlike property taxes that are paid in arrears your CDD fee is paid in advance. If you financed your property your mortgage company has broken down the CDD fee and Taxes and that is added to your monthly payment, is escrowed, and paid on your behalf. If your home is paid off you are responsible for your property tax and CDD bill. 

Is the CDD the same as the HOA?

No, The CDD and the HOA are separate and have different functions. The HOA covers things like what color you can paint your home, what type of fencing you can install, and polices properties that are not keeping their landscaping up or have broken down cars etc.  The CDD is for the infrastructure and amenities. Typically communities that have a CDD also have a HOA, but many HOA communities do not have a CDD. 

Is a CDD bad?

CDD's aren't for everyone, but they are not bad. Check out this video:

 

CDD communities typically have more and better amenities than a non CDD community, and you get what you pay for. If you want things like community pools, clubhouses, tennis or pickle ball courts, then a CDD community is probably right for you. If you do not want any of that, you may want to look elsewhere to save yourself the CDD fees. 

If you do not want to buy a new home in a CDD community we have the search set up for you!

Lakeland New Construction with No CDD