Newbie Bond Questions

[tom_sjc]

My understanding is that each home pays a bond which is for infrastructure. The cost of the bond varies by district. Total of infrastructure is divided by the number of acres and eventually this comes out to a number that the homeowner is charged and is payable with their tax bill.

Does the bond payment have anything to do with the purchase price of the home or is it just based on square footage of lot, something else?

In addition to the bond, there is also a fee for maintenance of the infrastructure, correct? Also payable with prop taxes? How is this calculated, lot size, something else?

I found the spreadsheet on-line for what it costs to live in TV. It suggests $300/month for prop taxes and then has $300 for CDD. Is the CDD the bond plus the maintenance?

Thanks for any clarifications.

Tom (Looking at August Retirement)

[bagboy]

Residential Bond Assessment Information (http://www.districtgov.org/departments/finance/bond_info.aspx) this link will help answer many of your questions.

[tom_sjc]

Residential Bond Assessment Information (http://www.districtgov.org/departments/finance/bond_info.aspx) this link will help answer many of your questions.

Looking at this I don't see any mention of a maintenance expense. I thought I read in other posts a maintenance expense. How is maintenance of the infrastructure paid?

[bagboy]

Looking at this I don't see any mention of a maintenance expense. I thought I read in other posts a maintenance expense. How is maintenance of the infrastructure paid?

Our bond is paid, the yearly maintenance on the bond is $595.00. We pay that amount in November when we pay our property tax at the county office on 466A and Powell Rd. The maintenance on the bond never goes away, even with the bond paid off. I suggest writing down all if your questions and contacting the district office. That number and a wealth of information can be found on
Village Community Development Districts (http://www.districtgov.org)

[Marathon Man]

You generally have it correct. The bond payments cover the original construction. The amount is based on the type of home (not price) and the district that it is in (larger homes pay a larger share of the bond because they occupy a larger space). We also pay maintenance fees, amenity fees, county taxes, etc. to cover care and feeding of the rec centers. pools, sewers, roads, and everything else. Some of it is owned by the county. Some of it is district owned (aka The Villages). Lots of details behind this simple explanation.

[kstew43]

every village has a different Bond amount and Maintenance amount. It does not go by the price of your home, or the lot size, it goes by the neighborhood in which you live.

that being said patio homes have the cheapest bonds, while premier homes have the highest bonds.

[tom_sjc]

Thanks all.

[8notes]

And obviously older neighborhoods have lower bonds or even paid off bonds. Many people pay off the bonds in installments, over a long period of time. Depending on your interest rate you could end up paying much more for that bond in interest. You will find many "discussions" on this forum about whether or not to pay off the bond.

[Goldwingnut]

I’ve posted the below information previously on this web site and have updated it as time goes on. This tries to explain the bond and other fees here in The Villages.

When buying a home in The Villages perhaps one of the most misunderstood items and not well explained during the sales process in The Villages are the fees that are involved. All of these are part of the sales contract and/or deed restrictions you sign at closing. There are 3 Fees that are paid that are often confused, in a nutshell it looks like this:

The Amenity Fee - paid monthly with your water bill, about $150 + or - a month and will depend on when you purchased the home as there are annual CPI adjustments. This is paid perpetually. This pays for the pools, recreation centers, executive golf, etc. - this is the money for the fun stuff here in The Villages.
The Annual Maintenance Fee - paid annually in your county tax bill and will vary depending on type of home and district (see below) and the CDD annual budget - This is paid perpetually. This pays for the pretty and functional stuff like side walk maintenance, landscaping, cart paths, and building maintenance. A significant portion of this money is turned over to manage project wide things like irrigation of the common areas and general maintenance of the common areas of The Villages.

The Bond Fee - paid annually in your county tax bill and will also vary depending on type of home and district - This is a 30-year bond and once paid for a home is gone. This money paid for the infrastructure of the CDD during construction - roads, water and electrical distribution systems, retention ponds, etc. In the case of CDD-10 there are two bonds, one for Phase 1 and one for Phase 2 but home owners only pay on the bond for the phase they are located in. The bond can be paid off early if desired (see the Residential Bond Assessment Information (http://www.districtgov.org/departments/finance/bond_info.aspx) web site). The older areas of The Villages are coming to the end of their bonds, I believe that District 1’s bonds are now paid. For some of the older homes you may sometimes see “low bond” when they are up for sale meaning they only have a few years left to pay and have a low remaining balance.

The Villages development company uses this method for development costs for a variety of reasons while most developers simply roll the cost into the price of the home, either way you are still paying for it. This is also probably one of the keys to the success of The Villages. By using the municipal bond issued by the CDD the developer does not have to sit on the costs of infrastructure development and construction and have to recover it slowly as all the properties are sold. Instead they invest their money in amenities, which unlike most developments, are generally built before the homes in an are sold; you won’t hear during the salesman’s pitch “this will be the fairway for the 3rd hole and over there will be a pool and a recreation center” instead you will get “this IS the fairway for the 3rd hole, that IS the village recreation center with the family pool, and that IS the neighborhood recreation center with the adults only pool”. Roads and infrastructure have to be built to support the community, the amenities are optional luxuries, in most development but not in The Villages.
The basic method for calculating the Maintenance or Bond amount is as follows:

The amount of the bond or the annual maintenance fee

Divided by

The number of assessable acres in the CDD (home site acres?)

Multiply by

Number of acres of a subdivision/unit

Divided by

The number of homes in the subdivision/unit

This yields a dollar amount that each home is assessed in each subdivision/unit. Using this formula Premier home communities have larger bond amounts and annual maintenance fees because of the larger average lot sizes and Villa communities have much smaller bonds and maintenance fees. Everyone in a subdivision/unit pays the same fees, it doesn’t matter if you have a huge corner lot or a smaller inside lot, the fees are the same in that subdivision/unit.

Examples:

Unit 967 – a Courtyard Villa subdivision in CDD-10 Phase 1 2012 Bonding
Bond Amount = $77,040,000 Total Assessable Acres = 788.39
Unit 967 Acreage = 8.47 Number of Homes = 59

$77,040,000 / 788.39 = $97,718.13 bond amount per acre
$97,718.13 X 8.47 = $827,672.60 bond amount for Unit 967
$827,672.60 / 59 = $14,028.35 bond per home in Unit 967

Unit 217 – a Designer Home subdivision in CDD-10 Phase 1 2012 Bonding
Bond Amount = $77,040,000 Total Assessable Acres = 788.39
Unit 217 Acreage = 38.79 Number of Homes = 177

$77,040,000 / 788.39 = $97,718.13 bond amount per acre
$97,718.13 X 38.79 = $3,790,486.43 bond amount for Unit 217
$827,672.60 / 177 = $21,415.18 bond per home in Unit 217

Unit 235H – a Primer Home subdivision in CDD-10 Phase 1 2012 Bonding
Bond Amount = $77,040,000 Total Assessable Acres = 788.39
Unit 235H Acreage = 35.46 Number of Homes = 75

$77,040,000 / 788.39 = $97,718.13 bond amount per acre
$97,718.13 X 35.46 = $3,465,085.05 bond amount for Unit 235H
$827,672.60 / 75 = $46,201.13 bond per home in Unit 235H

In all three examples the bond amount per acre is the same as the bond amount is the same, the bond assessment differences occur due to the size of lot in each subdivision. In this case the CYV lot is about 1/7 of an acre, the Designer lot is about 1/4 of an acre, and the Primer home sits on about 1/2 acre lot.

It has been argued may times that the differences are unfair as all the homes use the same infrastructures equally so the bond amount should be equal. There may or may not be some validity to this argument but that is relevant to the Maintenance assessment and not the construction bonds.

If one observes the construction process that is ongoing you will see that one of the first steps performed is the removal of the top 10 feet of soil, this isn’t just under where the home sits but the entire subdivision including the roadways. This is a very labor and equipment intensive process and is therefore very expensive work. In a Primer community you have bigger lots and more acreage covered by roadways than in a CYV community, therefore more costs to bear.

This extensive site work is done to a) lay in the underground utilities and b) provide a stable ground base for the home foundations. In Florida this is especially important due to the high sand content, not doing this work aggressively as they do here results in lots of settling and foundation cracking. Having ripped out the carpet and put in tile floors in two similar aged homes here in Florida I can tell you the differences were significant in the amount of settling and foundation cracking that this level of site preparation work makes. Our 2-year-old home outside the villages had settling and deep cracks up to a half inch wide in every room that required extensive fill work before putting down the tile. Our 2-year-old CYV here in The Villages had two shallow hairline cracks about 10 feet long that were corrected with the water barrier material that was put down before the tile.

Also to be considered is the utilities cost in preparing the subdivision. The main lines and feeders for water, sewer, and electric are substantially longer (4X) in the Premier community compared to the CYV for a similar number of lots.

This applies to the residential districts CDD-1 through CDD-12. The other 3 CDDs are business districts and have a different structure not relevant to this discussion.

Another argument that is commonly made is that the bonds are so much higher in the newer areas than in the longer established areas. The realities of this that the new bonds increase because the cost to do the work and materials increase every year, the actual inflation adjusted amounts are very close from bond to bond. The increase is about 3% to 5% per year. The bonds from CDD8 and before have all been recently reissued to take advantage of the lower interest rates in the last few years so the data on their original bonds is no longer readily available. CDDs 9 through 12 are shown below. I had looked at this information about 2 years ago before the new bonds and the numbers were consistent with 3-5% annual increase.

CDD.....Year.....Amount...........Acres.....Per Acre....Annual Change
12........2016....$57,825,000....473.09..122,228.. ..3%
11........2014....$56,120,000....489.29..114,696.. ..9%
10........2012....$77,040,000....788.39....97,718. ...5%
9..........2011....$55,115,000....593.16....92,917

The annual maintenance fees assessment is calculated in the same manner as the bonds with the exception that the entire CDD assessable acreage is considered not the individual bonding acreage as the cost are CDD based not phase based. In theory the maintenance cost per acre should be the same anywhere in The Villages but in reality they very slightly due to the different costs in each CDD depending on greenspace, landscaping, and other items to be maintained in their respective budgets.

You can find most of this and all the budgets for each district on the district.gov web site.

[tuctba]

I’ve posted the below information previously on this web site and have updated it as time goes on. This tries to explain the bond and other fees here in The Villages.



When buying a home in The Villages perhaps one of the most misunderstood items and not well explained during the sales process in The Villages are the fees that are involved. All of these are part of the sales contract and/or deed restrictions you sign at closing. There are 3 Fees that are paid that are often confused, in a nutshell it looks like this:



The Amenity Fee - paid monthly with your water bill, about $150 + or - a month and will depend on when you purchased the home as there are annual CPI adjustments. This is paid perpetually. This pays for the pools, recreation centers, executive golf, etc. - this is the money for the fun stuff here in The Villages.

The Annual Maintenance Fee - paid annually in your county tax bill and will vary depending on type of home and district (see below) and the CDD annual budget - This is paid perpetually. This pays for the pretty and functional stuff like side walk maintenance, landscaping, cart paths, and building maintenance. A significant portion of this money is turned over to manage project wide things like irrigation of the common areas and general maintenance of the common areas of The Villages.



The Bond Fee - paid annually in your county tax bill and will also vary depending on type of home and district - This is a 30-year bond and once paid for a home is gone. This money paid for the infrastructure of the CDD during construction - roads, water and electrical distribution systems, retention ponds, etc. In the case of CDD-10 there are two bonds, one for Phase 1 and one for Phase 2 but home owners only pay on the bond for the phase they are located in. The bond can be paid off early if desired (see the Residential Bond Assessment Information (http://www.districtgov.org/departments/finance/bond_info.aspx) web site). The older areas of The Villages are coming to the end of their bonds, I believe that District 1’s bonds are now paid. For some of the older homes you may sometimes see “low bond” when they are up for sale meaning they only have a few years left to pay and have a low remaining balance.



The Villages development company uses this method for development costs for a variety of reasons while most developers simply roll the cost into the price of the home, either way you are still paying for it. This is also probably one of the keys to the success of The Villages. By using the municipal bond issued by the CDD the developer does not have to sit on the costs of infrastructure development and construction and have to recover it slowly as all the properties are sold. Instead they invest their money in amenities, which unlike most developments, are generally built before the homes in an are sold; you won’t hear during the salesman’s pitch “this will be the fairway for the 3rd hole and over there will be a pool and a recreation center” instead you will get “this IS the fairway for the 3rd hole, that IS the village recreation center with the family pool, and that IS the neighborhood recreation center with the adults only pool”. Roads and infrastructure have to be built to support the community, the amenities are optional luxuries, in most development but not in The Villages.

The basic method for calculating the Maintenance or Bond amount is as follows:



The amount of the bond or the annual maintenance fee



Divided by



The number of assessable acres in the CDD (home site acres?)



Multiply by



Number of acres of a subdivision/unit



Divided by



The number of homes in the subdivision/unit



This yields a dollar amount that each home is assessed in each subdivision/unit. Using this formula Premier home communities have larger bond amounts and annual maintenance fees because of the larger average lot sizes and Villa communities have much smaller bonds and maintenance fees. Everyone in a subdivision/unit pays the same fees, it doesn’t matter if you have a huge corner lot or a smaller inside lot, the fees are the same in that subdivision/unit.



Examples:



Unit 967 – a Courtyard Villa subdivision in CDD-10 Phase 1 2012 Bonding

Bond Amount = $77,040,000 Total Assessable Acres = 788.39

Unit 967 Acreage = 8.47 Number of Homes = 59



$77,040,000 / 788.39 = $97,718.13 bond amount per acre

$97,718.13 X 8.47 = $827,672.60 bond amount for Unit 967

$827,672.60 / 59 = $14,028.35 bond per home in Unit 967



Unit 217 – a Designer Home subdivision in CDD-10 Phase 1 2012 Bonding

Bond Amount = $77,040,000 Total Assessable Acres = 788.39

Unit 217 Acreage = 38.79 Number of Homes = 177



$77,040,000 / 788.39 = $97,718.13 bond amount per acre

$97,718.13 X 38.79 = $3,790,486.43 bond amount for Unit 217

$827,672.60 / 177 = $21,415.18 bond per home in Unit 217



Unit 235H – a Primer Home subdivision in CDD-10 Phase 1 2012 Bonding

Bond Amount = $77,040,000 Total Assessable Acres = 788.39

Unit 235H Acreage = 35.46 Number of Homes = 75



$77,040,000 / 788.39 = $97,718.13 bond amount per acre

$97,718.13 X 35.46 = $3,465,085.05 bond amount for Unit 235H

$827,672.60 / 75 = $46,201.13 bond per home in Unit 235H



In all three examples the bond amount per acre is the same as the bond amount is the same, the bond assessment differences occur due to the size of lot in each subdivision. In this case the CYV lot is about 1/7 of an acre, the Designer lot is about 1/4 of an acre, and the Primer home sits on about 1/2 acre lot.



It has been argued may times that the differences are unfair as all the homes use the same infrastructures equally so the bond amount should be equal. There may or may not be some validity to this argument but that is relevant to the Maintenance assessment and not the construction bonds.



If one observes the construction process that is ongoing you will see that one of the first steps performed is the removal of the top 10 feet of soil, this isn’t just under where the home sits but the entire subdivision including the roadways. This is a very labor and equipment intensive process and is therefore very expensive work. In a Primer community you have bigger lots and more acreage covered by roadways than in a CYV community, therefore more costs to bear.



This extensive site work is done to a) lay in the underground utilities and b) provide a stable ground base for the home foundations. In Florida this is especially important due to the high sand content, not doing this work aggressively as they do here results in lots of settling and foundation cracking. Having ripped out the carpet and put in tile floors in two similar aged homes here in Florida I can tell you the differences were significant in the amount of settling and foundation cracking that this level of site preparation work makes. Our 2-year-old home outside the villages had settling and deep cracks up to a half inch wide in every room that required extensive fill work before putting down the tile. Our 2-year-old CYV here in The Villages had two shallow hairline cracks about 10 feet long that were corrected with the water barrier material that was put down before the tile.



Also to be considered is the utilities cost in preparing the subdivision. The main lines and feeders for water, sewer, and electric are substantially longer (4X) in the Premier community compared to the CYV for a similar number of lots.



This applies to the residential districts CDD-1 through CDD-12. The other 3 CDDs are business districts and have a different structure not relevant to this discussion.



Another argument that is commonly made is that the bonds are so much higher in the newer areas than in the longer established areas. The realities of this that the new bonds increase because the cost to do the work and materials increase every year, the actual inflation adjusted amounts are very close from bond to bond. The increase is about 3% to 5% per year. The bonds from CDD8 and before have all been recently reissued to take advantage of the lower interest rates in the last few years so the data on their original bonds is no longer readily available. CDDs 9 through 12 are shown below. I had looked at this information about 2 years ago before the new bonds and the numbers were consistent with 3-5% annual increase.



CDD.....Year.....Amount...........Acres.....Per Acre....Annual Change

12........2016....$57,825,000....473.09..122,228.. ..3%

11........2014....$56,120,000....489.29..114,696.. ..9%

10........2012....$77,040,000....788.39....97,718. ...5%

9..........2011....$55,115,000....593.16....92,917



The annual maintenance fees assessment is calculated in the same manner as the bonds with the exception that the entire CDD assessable acreage is considered not the individual bonding acreage as the cost are CDD based not phase based. In theory the maintenance cost per acre should be the same anywhere in The Villages but in reality they very slightly due to the different costs in each CDD depending on greenspace, landscaping, and other items to be maintained in their respective budgets.



You can find most of this and all the budgets for each district on the district.gov web site.



Phenomenal explanation!


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[tom_sjc]

Yes, great info. Thanks. Maybe this is sticky worthy.