[Bogie Shooter]

Originally Posted by Goldwingnut

The bond is collected by the county as allowed under Florida. There is a 4% discount given for early payment of the county tax bill, this decreases as you get closer to the actual tax due day. The county then charges the respective CDD a 2% service fee for collection of the funds and pays the balance to the issuing CDD, not the bond holders or the developer. The CDD then has a separate budget from its general fund/maintenance assessment budget for each bond series that has been issued. Form these separate budgets annual payments are made to the bond service companies to pay off the bonds and pay the bond holders, these payments include both that annual collections through the tax collector as well as any payments residents who have paid off their bonds early. Both the 4% and the 2% are calculated into the annual budgets of both the bonds and the maintenance assessments that are collected in this method.

The developer does not borrow the money to create the bonds. The developer presents the plans and proposed costs to the CDD board and once approved the CDD board works with one of several major financial institutions to issue the bonds for public sale. One the bonds are sold, and funds collected, the funds are transferred to the CDD issuing the bonds and held in a special construction account. As work progresses the developer invoices the CDD for work completed and is only then paid.

It is this bond process allowed under Florida law that has helped The Villages be so successful. Without the bonds the development costs would have to be carried by the developer and would be rolled into the cost of each home as is the case in almost every other development. They would not start seeing recovery of these funds until late into the development and sales process. In the case of CDD-13 phase 1 (Bradford, Chitty Chatty, and Hawkins) this bond is $90,120,000.

Because the developer does not have to carry these costs and the associated interest their money is freed to invest in other aspects of the development - the amenities such as pools, rec centers, golf courses, etc. Unlike other communities you won't hear during the sales pitch "over there will be the swimming pool and that will the green for the 4th hole next year when the golf course is built", instead you hear "THAT IS the neighborhood pool and THIS IS green for the 4th hole of the (fill in name) golf course..."

Some here like the bond, some dislike it, and most don't understand it. Bottom line is that you would pay the development costs no matter what, either separately in the bond or rolled into the cost of the home. Many communities advertise "No Bond" as a selling point but don't disclose the fact that these costs and their interest are included in the home cost, here in The Villages we have a bond with each new home and it obviously appears to be working quite well.

I don't know how that sticky thing works.....but this explanation definitely should be added.