New Bond Assessments
 

Just read two articles in today's Daily Sun about two new Village developments to be built (Bellaviva at Whispering Hills and Cypress Reserve).
Both have posted yearly assessments of over $8000 for a single family home.
Am I correct in this figure?
How many people can afford this?

Note that a bond is not an annual assessment. It is a lump sum loan that is amortized over 30 years and charged to the property owner as principal and interest. The property owner can also choose to pay off the loan to avoid paying the interest. If the owner chooses to pay off the loan, it must be paid off all at once.

Whatever you want to call it, and Sumter County calls it a non-ad valorem assessment, it is paid every year until it is paid off.

In addition to principal and interest there is an admin fee. Paying it off early saves the interest plus the admin fee. Don’t pay it off early and you can pass the balance to the purchaser.

OP, it looks like your figure is correct. The bond amount for a typical single family house in Cypress Reserve is estimated to be $87,408.62, and the annual bond payment to be $8,348.69, to include principal, interest, and the admin fee. As to how many people can afford it, I assume that a lot of people will be able to afford it.

Wow that is high

Do you think the purchaser will notice the house comes with an unpaid bond of $80K?

For almost all cases, the house will not come with an unpaid bond of $80K. Only a very few homes started with a bond that high. Any resales with a bond will have some of it paid off. The disclosures for the home will include the bond. The agents are sure to mention the bond. The bank may mention the bond.

So yes, I think the purchaser will notice but no, he won’t notice an unpaid bond of $80K.

Let's assume that anyone who buys that property can afford the annual bond payment, or pay it off up front.

This is not being developed by The Villages and is not part of The Villages from what I can see. It is a separate development by Marsan Real Estate Group.

if the properties are nice enough, they will find buyers.

I can tell you with absolute certainty I know one guy (very well) who can't afford it. He also can't afford a Porsche Cayenne. Yet somehow, he finds a reason to go on.

Please any person who has done their due diligence knows there is a bond. Asks what the balance is. It not a secret

OP should correct his wrong information if this is true.

The problem is many people will not do their due diligence and blindly go ahead

There is no indication in either of these public filings that this is The Villages Land Company.

My parents first visit was 2004, their paper with “how much does it cost to live in TV”, listed about 14 items, one of them was bond estimate. Of course in 2004 not much was built. I still have their dvd, the cost pages, and their hand written note about each cost. In original note booklet.
Our cost page in 2007 was basically the same items, but cost was slightly higher on amenities fee, and bond on the current new neighborhood. When our oldest looked at homes in 2018 the agent assigned to them gave them the bond amount without the need to ask. I have found mls has a tendency to leave out bond cost, unless pressed

I don’t think I have ever met anyone that said “I had no idea what the definition of bond cost” and we have lived in multiple villages (5).

But many were confused that their Water bill was outrageous. They knew there was amenity fee, just didn’t realize that’s how the fee was paid.

Are you referring to the public legal notices?

What does that have to do with bonds in The Villages? As you call them Village developments?

https://www.maurycarter.com/wp-conte..._S20230613.pdf

The parcels highlighted in red comprise the Journey Circle M Ranch in Leesburg. The 1,356-acre ranch is reportedly under contract. (Lake County Property Appraiser)

Ayana Holding, a fully-integrated real estate development firm based in Dubai, has entered into a joint venture with Orlando-based Marsan Real Estate Group to develop a 1,800-acre master-planned retirement community in Lake County, about 40 minutes outside of Orlando, with an estimated value of $1.6 billion.

Located a few miles from The Villages, Bella Viva at Whispering Hills would comprise 5,500 homes with a mix of retail and commercial development.

The conceptual master plan calls for golf courses, restaurants, shopping malls, a medical clinic, boutique hotel, spa, hospital and equestrian center, according to the JV partners.

Leesburg City Manager Al Minner told GrowthSpotter representatives of the Marsan Group have had three neetings with city staff to discuss the project, and they submitted a very informal proposal which was returned to the developer for completion. "It really wasn't at a stage to where we could even process it," Minner said.

The bond is what our developer added to the purchase price for a home. It’s the cost of putting utilities on the lot. NO other builder has done this to my knowledge. It has always been part of the total price of the property. The bond makes the property look more reasonable in price but with interest etc it actually is more like a hidden second mortgage you repay. Yes, you can pay it off or pass it along to the next buyer

The developers are paying higher prices to acquire the land. They are very poor so they need to increase their cash flow.

We had a trivia question about the TV. How many were at least millionaires…39% so yes there will probably be some buyers just not me Lol.

The continuing sales and expansion over the years (population 35,000 in 2004 and currently 154,00) would indicate the bond or amenity fees are economic factors but not inhibitors!

Interesting stat from the Sumter Property Appraiser data....in the Villages in Sumter County there are 631 properties with an assessed value of 1 million or more. Tied for first place with 69 each are Bridgeport at Lake Sumter and Pinellas, followed closely by Pennecamp with 65.

Bond
 

wow

I was told last week, by a Villages Agent, that bonds are now for 31 years.

80,000 bond is high
 

Personally, I think they should dump the bond idea altogether. Florida should legally eliminate bonds. If a builder wants to develop fine, but have them do it on their own dime and charge accordingly.

Bonds are just a way to muddy the waters of a real estate deal and make things “appear” cheaper than they actually are. They entice the builder to keep on building and leverage against buyers.

80 K bonds do seem rather high.

That bond makes the Enclave look like a steal. Competition could be good for buyers.

Due Diligence
 

It’s rather important for most of us to “due diligence” before purchasing property. Of course it’s all in the paper work. Have an attorney look over the paperwork if you’re “new” at purchasing property.

No developer, anywhere, ever, is going to build infrastructure "on his own dime". Usually it is included in the price of the home, here it is financed by bond offerings. Same difference, but it does make the price of the home appear to be lower. No different that the low fare airlines that then want to charge you extra for the engines or a pilot.

Benefit to the bond: Easier to qualify for any mortgage needed to purchase a home

Drawback to the bond: Prices can be inflated (increased profit) since $30K+ of the true cost is hidden

Rationalization for the bond: The price of the house is the true price since it is the price of the land and the structure. The bond pays for the infrastructure which the homeowner will never own and will never ask their insurance company to replace after a storm or fire.

Outside the bubble: The cost of the infrastructure was paid for somehow. Either the city paid for the developer to put in streets, water lines, and sewer lines or the cost was divided between the homes and added to their price. It doesn't seem likely that the city would pick up that tab to help the developer make money.

Exactly, just pass legislation that builders can’t hide behind their “bond” smokescreen. Besides, with inventory above and beyond record here in the Villages it has become a natural time to transition into home seller transparency.

That is high
 

Purchased my home near Sawgrass grove in Jan 2022. My annual bond payment is 2,900.00. 30K bond. This 80K bond is very high to me. If someone is trying to get a water front lot, that will have a lot premium of upwards of 100K plus the 80K bond plus price of house. Glad we got the house we did when we did. Our expenses are manageable.....only thing that bugs me is school district wanting more money every year. Millage for schools is higher than the Sumter County Millage. Remember.....everyone, especially contractors, have attitude that "Oh you're retired and living in the Villages....you must be rich".

Where is there an 80k bond in TV?

Purchased in St.James in 2012, some of the very last new construction north of 466A. Our bond was $13,000 and I thought that was high at the time. Now it seems like a great deal.

Another way that it is done is how new development is handled in California. At least 35 years ago, a thing called "Mello-Roos" was passed, named after the political authors.

It is essentially the same as a bond and a CDD. A type of CDD is formed, and a municipal bond is secured to fund schools, roads, sewers, etc.

It is another 1% or so (in addition to the 1.1% property tax) added as a separate line item to your property tax bill. So, if you sell, you stop paying. It cannot be paid in advance, and it is your home's share of the neighborhood's infrastructure bill. Once the municipal bond is paid off, the Mello-Roos tax ends for the homeowner. Usually about 30 years.

Very similar.

I’ve sold 5 new homes in the villages , I never stayed more than 4 years in any of them ,so the bond was still very high on them . The longest any of them were on the market was a couple of months. You get maybe one or 2 people who will offer a bid subtracting the price of bond , you just say no . ,the rest don’t care . The current market may be different now but I’ve sold in down markets before ( not here) if you have a good product and right price it will sell and I’m also always prepared to stay in the house if I need to

We bought new in Buttonwood in 2010 and bond was about $36,000 as I recall. Given that the developer negotiated that the local taxes would pay for roads and such it's surprising the bond is so much higher.

Recent rise of new house bonds, makes buying in the northerth established areas of TV. look a far better option.
Keeps northern resale prices at a reasonable price as well.

Local Taxes Do Pay for Roads
 

Sumter County does pay for infrastructure in the Villages. They cut a check for 50 million last year for new development just south of the turnpike to the developer.

The bond pays for the construction of the roads in the Villages, local taxes pay for care and maintenance of the roads. Villa roads are a special case, the CDD pays for maintenance of those.

Sumter County does not pay for infrastructure in the Villages. The payment you are referencing (not sure if your number is correct) was for improvements to existing County roads. In some areas the County would use their road crews to make the improvements but here they contract it out. In this case a company of the Villages performed the work.

The highest one I've seen so far is $72,080.45 for unit 84V in Dabney.