Bond Payment

[Muncle]

A lot of folk who haven't bought yet have had questions about the bond and how it's assessed and paid. This is a copy of the letter all owners with outstanding bonds get each year with payout details. Thought it might be of interest (no pun).


http://i266.photobucket.com/albums/ii253/billfl/img017.jpg

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[Sidney Lanier]

We bought our house with the bond already paid off; the previous (original) owners of the house had paid it at the time they had bought the house. Does anyone know if there's any simple and unobtrusive way to find out what the bond originally was before it was paid off? Thanks!

[bestmickey]

Thanks for sharing, Muncle. Very informative.

[Lil Dancer]

The way they work the bond now, is that in a particular village, villas have a certain bond, ranches a bond, designers a diffrent bond and so on. This wouldn't be unobtrusive, but you could just ask a neighbor in your village who has a similiar home, what their bond is. Or, to be more unobtrusive, go to Properties of The Villages, look at used homes in your neighborhood, find one similiar, and call up real estate and pretend to be an interested buyer, and ask over the phone what the remaining bond is. It would give you some idea.

[784caroline]

Sidney
Using you Lot and Unit Number call Carol Thompson at 352-751-3905. She can answer any and all questions regarding your bond and even provide you (or who has a bond balance), the 30 year payment schedule of interest /principal by year.

For example, my $18,140 bond will cost me over 30 years $42,174. This includes $18140 Principal, $21503 interest, and $2503 administrative expenses.

Its an eye opener!!!!!!!

[Sidney Lanier]

Thanks, Caroline! I know that any kind of 30-year loan, whether a bond like this or a mortgage, is going to be top-heavy with interest over its life. It is indeed an eye-opener! It's one of the reasons we sought a house that had the bond paid, or if it didn't, we intended to negotiate with the sellers to pay it off at the closing. Can you tell me what village you're in and what style house you have that the bond is $18,140? Many thanks!

[tucson]

I'd like to know who receives all this money we're paying TV for the bond,the state? And does it pay for the streets,landscaping on roads,around facilities,buildings etc,etc.? If so, do all other housing developments in Fl. also charge buyers for a Bond besides Sale Price,Taxes and Amenity Fees?

[Sidney Lanier]

It's my understanding that the developer of TV pays up front to put in streets and sidewalks, water and sewer lines, underground utilities (electricity, cable), and then 'sells' the bond to a company who handles the payments. Homeowners then pay off the bond either over a 30-year period or up front or after several years or after acquiring a resale, however. Here in TV this is how the bond shows up. Other developers may built the bond cost into the cost of each individual new home, so buyers pay more for their houses instead of a separate bond which here in TV is paid once a year along with property taxes. I believe the bond does not cover landscaping; this I'm pretty sure is part of our monthly amenities fee. Someone correct me if this is not accurate, please--thanks!

[Muncle]

I'd like to know who receives all this money we're paying TV for the bond,the state? And does it pay for the streets,landscaping on roads,around facilities,buildings etc,etc.? If so, do all other housing developments in Fl. also charge buyers for a Bond besides Sale Price,Taxes and Amenity Fees?

See the 2nd and 3rd para of the "Bond Debt Assessment" paper above for more details on what the bond covers.

Firstly, your bond payment does not go to TV. It goes to the bond holders to repay their investment. As you know, TV is based on a Florida Statute 190 which allows creation of Community Developement Districts. Once formed, a CDD can/does issue tax-exempt bonds to pay for infrastructure, such as roads, water and sewer and storm-water management, parks and recreational facilities. The tax-free bonds carry an interest rate that is generally below non-tax-exempt market rates. To repay such bonds and its ongoing expenses, the CDD levies assessments, which are enforceable in the same manner as county taxes. I don't know who carries the bonds for TV but assume they are publicly traded.

As Sidney said, everybody developing similar projects have this infrastructure costs. On smaller developments, the builder generally just includes it in the initial price as part of overhead. The reason TV uses bonds rather than directly passing the costs along, I suspect, is one of scope. Take for example the development being done in CDD Region 8. There has already been a lot of money spent there (north of 466A, west of Bailey Trail) and there will be an awful lot more long before construction begins on the first home, likely many many millions of dollars. Without the ability to issue attractive bonds, the developer would have to front that money -- now he might be able to do that today, but there was no way he could provide the funding for earlier districts when this place was still embryonic. He had too have the bond capability or TV would never have been born. --- sorry, didn't mean to rattle on so.

One final note --- as it says on the bottom of the sheet, aside from the bond, there is also an annual maintenance assessment that all homeowners pay. This is not to be confused with your monthly assessment.

[mcelheny]

I'd like to know who receives all this money we're paying TV for the bond,the state? And does it pay for the streets,landscaping on roads,around facilities,buildings etc,etc.? If so, do all other housing developments in Fl. also charge buyers for a Bond besides Sale Price,Taxes and Amenity Fees?


No-Most other housing developments in Florida don't charge a bond on top of Sale Price,Taxes and Amenity fee.

[Frangyomory]

We paid our bond off immediately. It is like carrying a mortgage and you pay for it three times over the 30 years.

[zcaveman]

No-Most other housing developments in Florida don't charge a bond on top of Sale Price,Taxes and Amenity fee.


Please reread Muncle's note above. You either pay a bond separately or it is factored into the cost of your house. No developer is going to absorb the cost of the roads and sewers, etc out of their own pocket.

[Russ_Boston]

:agree: Z

The funny thing is that I've been on this web site for almost a year and we've discussed the bond ad nauseum. Not that it is a bad thing since many newbies such as me need the education but really...

The bonds themselves may be complex but the concept is relatively simple if I have read the posts correctly - TV management is not profiting from the bond - it is simply needed to cover infrastructure (roads, water, sewer lines etc.). Most developers hide the costs in the sales price of the home but in TV it is a separate add-on item. Just remember to inquire about the current bond on the home and go from there.

[Indy-Guy]

Here is a link to a previous post about paying off your bond.

https://www.talkofthevillages.com/smf/index.php/topic,1702.0.html

I play golf with two guys who were advised by their Villages realty rep not to pay their bond off for at least two years so they will know that this is the house they want to spend many years in. Both of them have purchased a new home in The Villages and sold their original Villages home. Both feel that they would not have recouped their bond if they had paid the bond off. One downsized and one went to a larger home. You never know if you purchased the right size home until you spend some time in it.

I will pay mine off next year after I am sure that I don't want to move to another house in The Villages as this is the only place I want to live.

Your interest quotes are correct if you live in your home for 30 years without paying your bond off. Remember you have the oppurtunity to pay your bond off one time each year. I for one hope I live in my home for 30 years. Let see I will be 93! Where do I sign up for that!

[bobfl]

It seems to me that taxes in Sumter County should be extremely low. Since the Villages is such a large proportion of it's tax base. The CDDs are maintaining the infrastructure and the Villages do not impact the school system due to over 55 rules. Is my reasoning correct?

Bob

[samhass]

Indy, I think you nailed it on this one. I paid my bond off in Mallory and sincerely doubt I'll recoup it on the sale. Ain't hindsight grand??








Here is a link to a previous post about paying off your bond.

https://www.talkofthevillages.com/smf/index.php/topic,1702.0.html

I play golf with two guys who were advised by their Villages realty rep not to pay their bond off for at least two years so they will know that this is the house they want to





spend many years in. Both of them have purchased a new home in The Villages and sold their original Villages home. Both feel that they would not have recouped their bond if they had paid the bond off. One downsized and one went to a larger home. You never know if you purchased the right size home until you spend some time in it.

I will pay mine off next year after I am sure that I don't want to move to another house in The Villages as this is the only place I want to live.

Your interest quotes are correct if you live in your home for 30 years without paying your bond off. Remember you have the oppurtunity to pay your bond off one time each year. I for one hope I live in my home for 30 years. Let see I will be 93! Where do I sign up for that!

[tucson]

Why aren't there Bonds In Lake Co. section of TV???

[JohnN]

tucson, same reason there aren't bonds in most of the country,

I see it as a ploy that instead of building it into the home price, they add it on as an "ala carte" but mandatory item. I think I read about 1/2 the counties in Florida now do this since it's a growing state and stress was being put on the infrastructure.

[Russ_Boston]

Very possible John. The initial price is the lure and once you have your heart set on a property it's tough to tell the spouse that you can't get it because of the 'total' price.

But since all of us TOTVers know the real deal we can talk about the bond upfront in any discussions about total price of the property.

[tekcormn]

are there any places in the villages that have no BONDS to pay ?

[champion6]

are there any places in the villages that have no BONDS to pay ?Yes, all houses in Lake County do not have a bond. Some resales in Marion and Sumter Counties might not have a bond because the homeowner paid it off.

[buggyone]

As you all know, the interest portion of your bond payment IS NOT tax deductible if you itemize your Federal Income Tax.

A lot of people have taken out a Home Equity Loan and paid off their bond with that money. The interest on a Home Equity Loan is less than on the bond and IS tax deductible.

Naturally, check with a tax advisor.

[OBXNana]

We settled in March 2014. As you get all excited about the dream of owning in The Villages, some things become a blur. Our sales person did say there was an annual maintenance fee and, quite honestly, went in one ear and out the other. When is this due and how is it determined? Is it like the bond and it's a sliding scale or are all the fees the same? Is this 100's or 1,000's of dollars each year? Broad question, but the reality hit when I read the sample the original poster shared. Thank you for sharing.

[dewilson58]

We settled in March 2014. As you get all excited about the dream of owning in The Villages, some things become a blur. Our sales person did say there was an annual maintenance fee and, quite honestly, went in one ear and out the other. When is this due and how is it determined? Is it like the bond and it's a sliding scale or are all the fees the same? Is this 100's or 1,000's of dollars each year? Broad question, but the reality hit when I read the sample the original poster shared. Thank you for sharing.

Sounds like he/she was talking about the annual bond payment.
Here is a link to determine you bond and related annual payment.
Village Community Development Districts (http://www.districtgov.org/departments/finance/bond_info.aspx)

[Bonanza]

No-Most other housing developments in Florida don't charge a bond on top of Sale Price,Taxes and Amenity fee.

Having been in real estate over 30 years,
I will tell you that this is the first development I've ever heard of that charges a bond.

In my mind, the developers cost for infrastructure is simply the cost of doing business.
Most developers will add various fees into the sales price so that buyers don't get P.O.'d.

[OBXNana]

Sounds like he/she was talking about the annual bond payment.
Here is a link to determine you bond and related annual payment.
Village Community Development Districts (http://www.districtgov.org/departments/finance/bond_info.aspx)

The OP example showed an annual maintenance assessment is due even if the bond is paid in full. We paid the bond at settlement. When I read this thread it jarred my memory and wish I had paid closer attention to the sales person.

I will check the Village Community Development District site again and may have missed the information. Thanks!

[OBXNana]

Having been in real estate over 30 years,
I will tell you that this is the first development I've ever heard of that charges a bond.

In my mind, the developers cost for infrastructure is simply the cost of doing business.
Most developers will add various fees into the sales price so that buyers don't get P.O.'d.



Normally with new construction the infrastructure is included in the price of the house. The developer doesn't eat the expense, they simply work it into the sale price.

I have no idea why it's done this way in The Villages, but we were fortunate to have a sales person that fully explained all the numbers.

[mickey100]

There is an annual maintenance assessment that is paid in addition to any bond payments. I'm not sure how it is computed. Ours runs around $500 a year.

[OBXNana]

There is an annual maintenance assessment that is paid in addition to any bond payments. I'm not sure how it is computed. Ours runs around $500 a year.

Thank you! I had concerns it mights be $1,000.00's that we had not budgeted for. Never in my wildest dreams did I ever think I'd be happy about spending another $500.00, but at this point, it is far better than I was imagining for the last couple hours.

[mickey100]

You're welcome!…enjoy….