[JMintzer]

Originally Posted by Tobys Dad

Where did you go to check bond balance? Thank you in advance.

Here: Bond Amortization Schedules

Click on your County/District, and then on your unit #...

[Goldwingnut]

Originally Posted by BrianL99

Thank you for your input, Don.

As is obvious from the original post and your post, CDD Bonds are an extremely complicated subject and until you've had personal involvement in the (wing) nuts & bolts, it's hard to appreciate how it all works. I disagree that they're not a "loan", but that's simply semantics.

I think the most informative part of your post for those who don't understand the concept, is the sentence above in italics. Buyers have to pay for the infrastructure, one way or the other. If this wasn't a CDD Community, every home would have initially been priced at least 10% higher, to recoup the Developer's infrastructure costs.

You're far more of an expert than I on CDD Bonds, but if you jump into this again, you might want to remind folks that the Interest Rate spread is regulated by the state and not just a number the Developer picks out of the sky.

How are CDD Bonds going to be affected by the current interest rate situation? Interest rates this high, are something we haven't seen in many years. Bond prices move inversely to interest rates, as you know. How will this effect the Developer's plans to the South and resultant bond prices?

The developer isn’t involved in the bond nor it’s interest rate, and actually from the investor’s stand point it’s the return rate on their investment, as the bond is technically not a loan but an investment vehicle the return rate is a more accurate term. The CDD contracts with an investment firm (Chase, Citi, BoA, etc.) to market the bond and they do a market assessment to determine a marketable return rate. The firm is paid a fee (usually a percentage of the total bond amount) for their efforts.

The amount of the bond is negotiated between the CDD and the developer as to the expected reasonable cost of the infrastructure development. Once determined, the fees and additional costs are added to the total amount of the bond. The funds from the bond sales are held by the CDD and used to pay the developer’s invoices for infrastructure development.

An interesting aside on the bond issue is what happens if the development costs are less than estimated or worse yet, higher than estimated.

If the costs come in less than expected, the residuals that are held in the bond reserves fund managed by the CDD issuing the bond is kept by the CDD upon maturity. These funds would normally be transferred to the Repair and Replacement (R&R) fund of the CDD or less likely, be used to reduce the annual maintenance assessment of the CDD homeowners.

If the development costs run over, then what happens? This is exactly what has happened in CDD10. The last I remember (I stepped down from the CDD10 board to accept the position of County Commissioner) from 2 years ago, the developer had invoice about $1.5 million more than the amount of the bonds in CDD10. These additional invoicings sit unpaid and will remain unpaid until the bond maturity date. As I said in the previous post, there is a reserve fund that hold a portion of the initial payments of the homeowners and the funds from early bond payoffs made by some homeowners. These funds are conservatively invested and have a modest rate of return. At maturity this reserve is liquidated to pay the final payment, if there is anything leftover the developer would receive payment of the held invoices up to the original amount of the invoice or until the funds are exhausted. If there is no residual or insufficient to pay the remaining pending invoices then the developer received nothing more and writes off the unpaid invoices.

The bond rate doesn’t play a significant role in the sale of homes, the 15 and 30 year fixed rate mortgage rate however does have an indirect impact. The impact is less an impact to the individual buying the new home and more an impact to that same individual who may be selling their current home and looking for a buyer who is impacted by that rate. A significant portion (30-50% is the estimate I’ve heard thrown around) of the homes purchased in The Villages are “cash” purchases and don’t have a mortgage.

[BrianL99]

Originally Posted by Goldwingnut

The amount of the bond is negotiated between the CDD and the developer as to the expected reasonable cost of the infrastructure development. Once determined, the fees and additional costs are added to the total amount of the bond. The funds from the bond sales are held by the CDD and used to pay the developer’s invoices for infrastructure development.

If I understand CDD's correctly, the CDD is controlled by a Board of Supervisors, who are designated by the Developer at the time of the CDD's creation?

These hand-picked "Supervisors" are then responsible for determining the validity of the Developer's invoices and advancing payment from the Bond Funds? (I assume the CDD advances money to the Developer to pay his bills, based on an agreed to construction schedule, no different than a bank would do on a construction loan?)

I must be missing something. The entire premise seems illogical.

[Goldwingnut]

Originally Posted by BrianL99

If I understand CDD's correctly, the CDD is controlled by a Board of Supervisors, who are designated by the Developer at the time of the CDD's creation?

These hand-picked "Supervisors" are then responsible for determining the validity of the Developer's invoices and advancing payment from the Bond Funds? (I assume the CDD advances money to the Developer to pay his bills, based on an agreed to construction schedule, no different than a bank would do on a construction loan?)

I must be missing something. The entire premise seems illogical.

Your slanted remarks clearly show much about yourself, why do you bother to live here, if you do at all.

Yes, the landowners elect the Supervisors for the first 5 years as required by Florida Statue Chapter 190. Then it transfers to the qualified electorate. How foolish would it be if they put someone from the POA or other such hypocritical groups on one of the boards, they are trying to build a development and a community. It’s critical that the initial Supervisors are philosophically aligned with the goals of the Community Development District (read the words - Community Development).

Does this mean that they must somehow be corrupt or negligent in their responsibilities as you try to allude to? Hardly so.

The State of Florida has a great many laws and regulations regarding development, spending of public funds, oversight, and contract rights and enforcement, and a great many others that exist to ensure the public trust is not violated including the Florida Open Meetings laws (commonly referred to as the Florida Sunshine Laws). They can’t just write checks and doll out money at will.

All it would take is a few unsavory actions by a few individuals to cause major problems and send things into a downward spiral. Perhaps if you look into the background of some of the landowner elected officials you will see that they are business owners, management officials, and prominent members of the community that are elected to these positions. None of whom would take actions that would risk their positions and reputations, nor would the developer want them to. Such actions would run the risk of ruining businesses and turning the work here into little more than a house of cards.

But of course an uninformed opinion always assumes the worst.

When I took office as the first resident elected supervisor in CDD10 I had only a smattering of knowledge of what I was getting into and was extremely skeptical of the actions of the board. I spent dozens of hours each month for the first several months studying and understanding the laws that govern the work of the boards and the rules that the district staff must work under. I also spent a lot of time looking into the backgrounds and histories of the Landowner elected members of CDD10, the SLCDD, the VCCDD, and the senior members of the District staff, as well as the ongoing issues with the IRS. I needed to know the type of people I was going to be working with and if I had just jumped into a snake pit. After assessing the quality of the people, I was comfortable with putting my name out in the public eye to be associated with all of them.

I wish I could say the same of all of the elected officials I have met in the last nine years. Fortunately most of these men and women are honorable and honest individuals, most but not all. Some I have met have proven themselves to be liars, dishonest, biased, egotistical, ignorant, uninformed, and self centered, trying to pass themselves off as doing what’s best for the “residents” when in fact much of their efforts have accomplishing just the opposite and to simply get their names recognized in certain online websites and to be elevated to places of “honor” within some organizations.

If you want to try to smear and spread distrust about the actions of individuals, my experience has taught me that these, in your words, hand-picked Supervisors, are in fact the wrong target.

[BrianL99]

Originally Posted by Goldwingnut

Your slanted remarks clearly show much about yourself, why do you bother to live here, if you do at all.

That seems to be a favorite refrain around here, when folks disagree. It might come as a huge shock to you, but some people opt to live in a place that may not be perfect, but it offers some things they find of value. Some folks choose to live Russia, Libya or even Bangladesh, even though life might not be perfect and government may not always have the residents' best interests in mind.

Originally Posted by Goldwingnut

Your slanted remarks clearly show much about yourself, why do you bother to live here, if you do at all.

But of course an uninformed opinion always assumes the worst.

When I took office as the first resident elected supervisor in CDD10 I had only a smattering of knowledge of what I was getting into and was extremely skeptical of the actions of the board.

I see. So it was ok for you to be skeptical, but anyone else who's skeptical, is slanted and uninformed?

Originally Posted by Goldwingnut

I wish I could say the same of all of the elected officials I have met in the last nine years. Fortunately most of these men and women are honorable and honest individuals, most but not all. Some I have met have proven themselves to be liars, dishonest, biased, egotistical, ignorant, uninformed, and self centered, trying to pass themselves off as doing what’s best for the “residents” when in fact much of their efforts have accomplishing just the opposite and to simply get their names recognized in certain online websites and to be elevated to places of “honor” within some organizations.

If you want to try to smear and spread distrust about the actions of individuals, my experience has taught me that these, in your words, hand-picked Supervisors, are in fact the wrong target.

Ahhh ... only the Developer's "hand-picked supervisors" are trustworthy and only you have the right to be skeptical?

The $40,000,000 the Developer stole, that was approved by the trustworthy supervisors, was merely an over-sight?

& the $350,000,000 in tax free bonds, the IRS says were improperly issued, was just an unfortunate blip?

I think I have it straight now. It all makes perfect sense.

Originally Posted by Goldwingnut

Your slanted remarks clearly show much about yourself.

To paraphrase the late, great Johnnie Cochran, "if the glove fits, you can't acquit".

[Rainger99]

Originally Posted by Jhrath7@gmail.com

In English so we the math idiots can understand!

I agree with this. Where is the Bonds for Dummies version??

[CoachKandSportsguy]

Originally Posted by Goldwingnut

As I read your post it appears to have a major flaw in it, the assumption that the developer is holding this bond. If that's your assumption, you're completely incorrect in your posting.

Nope, not my assumption. The CDD holds the bond liability though. .

The comprehension issue here is that the word investments is used colloquially for two different points of view correctly, without proper attribution to the point of view.

Bonds are a financing vehicle for an investor, a way to raise money for investment purposes. Financing is about raising money for investments with a future payout(s) for the buyers of the financing vehicle in some form. (bonds, equities, mortgages, etc.)

Bonds are an investment to buyers.
Bonds are a financing vehicles/processes for investors to raise money for their investments.
There are multiple financing processes for investors to raise money for their investments

The comprehension issue here is that the word investments is used for two different points of view, depending upon whose view point is active.

Bonds are an asset for the bond holder, with a claim on the investment. Left hand side of the bond holder ledger, in this case the investors who bought the bonds from wall street broker. (not related to anyone in TV, which GoldWingnut makes his assumption mistake about my post)

Bonds are a debt (liability) for the bond seller, the CDD, and shows up on the right hand side of the bond seller / CDD on which owes the interest and principal to the bond holders / buyers

On the left hand side of the of the CDD ledger, there is the cash (asset) from the sale of the bonds.
The CDD then uses the cash to create another asset or investment in the infrastructure of the CDD. . .

That is where the confusion lies, with the word investment used correctly for both the CDD and the bond holder, which is the buyer of the bond, without mentioning that the bond is also a debt / liability / financing method to the CDD which they must repay, or they lose ownership in their villages' investments.

So the CDD isn't going to lose ownership in the CDD, they will just exercise their lien on your property through their assessment for non payment.

PAY YOUR BOND ASSESSMENT EVERY YEAR OR PAY IT OFF BUT DON'T ASK REALTORS FOR PERSONAL FINANCE ADVICE!

damn, not living in TV and recently retired trying to get into retirement mindset is slow. . especially during the winter time in NE. . (currently here in TV visiting friends and not missing NE at all)

[Papa_lecki]

Originally Posted by CoachKandSportsguy

Nope, not my assumption. The CDD holds the bond liability though. .

I think the home owner has the liability. The CDD is just the collection vehicle, they collect from the debtor (homeowner) and pay the debtee (the holder of the bind investment).

If a homeowner defaults on their bond, the CDD downs pay it, the next owner of the house does.

[tophcfa]

Originally Posted by Papa_lecki

I think the home owner has the liability. The CDD is just the collection vehicle, they collect from the debtor (homeowner) and pay the debtee (the holder of the bind investment).

If a homeowner defaults on their bond, the CDD downs pay it, the next owner of the house does.

Here is a quick and basic view of these bonds from the standpoint of a bond investor. I understand this is a different view than how a homeowner views things, but it helps one understand the whole picture from a different perspective.

These are tax free municipal bonds being issued by the CDD’s. There are basically two types of municipal bonds, revenue bonds and general obligation bonds. General Obligation bonds (GO’s) are backed by the full ad valorem taxing powers of the issuing municipality. Revenue bonds are backed by a pledged specific revenue source, such as a toll road or utility charge. These bonds are technically revenue bonds issued by the CDD’s. Investors in the bonds look to the CDD’s ability to pay the bonds obligations through funds raised by a non ad valorem special tax assessment. This special tax assessment represents a first lien on property holders (homeowners bond balance) and is the sole revenue source backing the creditworthiness of the bonds from an investors standpoint. The credit worthiness of the bonds is based on the stability of the underlying special assessment tax base as well as the revenue generated from the special assessment being sized adequately to sufficiently pay all required debt service obligations in a timely fashion.

[BrianL99]

Originally Posted by Papa_lecki

I think the home owner has the liability. The CDD is just the collection vehicle, they collect from the debtor (homeowner) and pay the debtee (the holder of the bind investment).

If a homeowner defaults on their bond, the CDD downs pay it, the next owner of the house does.

Mr. CoachKandSportsguy is correct in his analysis of how CDD bonds work. They are not simply an "investment vehicle", as described by Mr. Goldwingnut, nor are they immune to being influenced (nor beyond manipulation) by the Developer.

They are indeed a loan from and liability for, the CDD's.

CDD Bonds never attach to a "homeowner", they attach to land only. They are not a debt of the homeowner. Only landowners assume the obligation. A homeowner never assumes liability nor becomes a debtor. Perhaps it's only semantics, but if you're going to get into the weeds, accuracy is important.

[Goldwingnut]

Originally Posted by CoachKandSportsguy

Nope, not my assumption. The CDD holds the bond liability though. .

The comprehension issue here is that the word investments is used colloquially for two different points of view correctly, without proper attribution to the point of view.

Bonds are a financing vehicle for an investor, a way to raise money for investment purposes. Financing is about raising money for investments with a future payout(s) for the buyers of the financing vehicle in some form. (bonds, equities, mortgages, etc.)

Bonds are an investment to buyers.
Bonds are a financing vehicles/processes for investors to raise money for their investments.
There are multiple financing processes for investors to raise money for their investments

The comprehension issue here is that the word investments is used for two different points of view, depending upon whose view point is active.

Bonds are an asset for the bond holder, with a claim on the investment. Left hand side of the bond holder ledger, in this case the investors who bought the bonds from wall street broker. (not related to anyone in TV, which GoldWingnut makes his assumption mistake about my post)

Bonds are a debt (liability) for the bond seller, the CDD, and shows up on the right hand side of the bond seller / CDD on which owes the interest and principal to the bond holders / buyers

On the left hand side of the of the CDD ledger, there is the cash (asset) from the sale of the bonds.
The CDD then uses the cash to create another asset or investment in the infrastructure of the CDD. . .

That is where the confusion lies, with the word investment used correctly for both the CDD and the bond holder, which is the buyer of the bond, without mentioning that the bond is also a debt / liability / financing method to the CDD which they must repay, or they lose ownership in their villages' investments.

So the CDD isn't going to lose ownership in the CDD, they will just exercise their lien on your property through their assessment for non payment.

PAY YOUR BOND ASSESSMENT EVERY YEAR OR PAY IT OFF BUT DON'T ASK REALTORS FOR PERSONAL FINANCE ADVICE!

damn, not living in TV and recently retired trying to get into retirement mindset is slow. . especially during the winter time in NE. . (currently here in TV visiting friends and not missing NE at all)

Your logic is sound and valid. Your most sound advice is obviously not asking the realtors for personal finance advice. It is very much akin to not asking a car salesman if it's a good price for the car they are trying to sell you.

The most confusing term in The Villages is The Villages. The name is used to refer to the community, the developer, the district government, and several other entities, all of which are generally not related to the other. Many people don't recognize or understand that these are not the same entity.

[tophcfa]

Originally Posted by BrianL99

Mr. CoachKandSportsguy is correct in his analysis of how CDD bonds work. They are not simply an "investment vehicle", as described by Mr. Goldwingnut, nor are they immune to being influenced (nor beyond manipulation) by the Developer.

They are indeed a loan from and liability for, the CDD's.

CDD Bonds never attach to a "homeowner", they attach to land only. They are not a debt of the homeowner. Only landowners assume the obligation. A homeowner never assumes liability nor becomes a debtor. Perhaps it's only semantics, but if you're going to get into the weeds, accuracy is important.

Definitely semantics, it’s a first lien on the land the home is built on. The homeowner owns the land and the house has little to no value without the land it’s built on.