Originally Posted by CWGUY (Post 1881859)

:ho: "It is CDD (Community Developement District."
Thanks for saying that, I was about to. OP has some good questions..... I asked them before buying......:icon_wink:

Originally Posted by Goldwingnut (Post 1881867)

Good answers from Marathon Man.

As far as question #2 goes, these are municipal bonds being issued and normally quite large (CDD13 Phase 1 bonds were $90+ million). A bank would be reluctant to lend money of these quantities to an unknown and unproven entity (CDD 13 has only existed since June 11, 2018) with no source of revenue to back up the loan. There are lots of banking rules about lending money, remember what a pain it was just to get a mortgage. The interest rate charged would be incredibly high and unaffordable.

The more attractive financing option is to get investors. If the properties would be privately held then private investors would be sought, these investors would then have a seat at the table for making decision, decisions that would be purely profit motivated. Not something desirable for a residential community.

The public bond offering allows for investors to provide the funding without having too much say in the process of usage and repayment terms except those of the bond issuing agent.

The bonds issued by the CDDs here in The Villages are highly sought after due to the long-proven track record of our CDDs and the development. Because of this record and reputation, the bonds can be issued at very competitive rates (low interest rate) which is good for the payers of the bonds - the homeowners.

Originally Posted by John41 (Post 1881935)

Thanks for the info.on financing. I also read a previous post of yours on the governing structure of The Villages. You clarified why revenue bonds were used and I never did understand the IRS challenging that except as harassing businessmen. Glad the IRS lost.

Originally Posted by Garywt (Post 1881807)

My thought is I bought a house and I pay my amenities fee. Nothing else to worry about except having fun.

Originally Posted by Goldwingnut (Post 1881894)

Not sure what recent controversaries you are referring to, there is a lot of misunderstanding and misinformation put out recently but there have been no issues.

One point of disagreement in today's paper was about CDD-7 wanting to exit the project wide agreement (PWA). Once again they mention that 7, as well as the other districts south of 466 pay into the fund, what keeps getting omitted is what that money does and what each district receives in return. The collective buying power of all the CDDs combined make for larger and more economical contracts, as 7 is finding out with the cost of getting a lawyer. The PWA also brings consistency across the community. Risk mitigation is another huge factor that is overlooked. Districts north of 466 don't have a joint management agreement and are on their own for infrastructure costs. The residents of CDD4 felt the sting of the cost of the sink hole in that are 2 years ago with a 30% increase in their maintenance assessment, which would not have happened south of 466 because of the PWA.

Originally Posted by Goldwingnut (Post 1881946)

In a nutshell, as I understand it from all my reading, the VCCCD issued tax free bonds, the problem was basically that the VCCDD is a commercial entity as it represented all the landowners (one - the developer) that are all businesses, so the tax-free bonds were issued to further businesses and not a community/municipality. The IRS and the cdd went back and forth for several years before finally coming to an agreement and ending the issue. Obviously, it is much more complex and confusing than this and there are a lot of salient facts that I've left out, but you get the general idea.

Originally Posted by rockyhyder (Post 1882232)

CDD has 5 elected Supervisors who manage the CDD budget, approve contracts for construction and services, and resolve community standards issues. I believe that is what the article is referring to as running the CDD.
Bonds are used to finance infrastructure because it is usually cheaper in terms of interest rate and it allows the CDD to pay the bond back over time using the proceeds generated from the infrastructure.

Originally Posted by Goldwingnut (Post 1881946)

In a nutshell, as I understand it from all my reading, the VCCCD issued tax free bonds, the problem was basically that the VCCDD is a commercial entity as it represented all the landowners (one - the developer) that are all businesses, so the tax-free bonds were issued to further businesses and not a community/municipality. The IRS and the cdd went back and forth

Originally Posted by John41 (Post 1882325)

When municipalities issue bonds for industrial parks to attract businesses, I wonder if the IRS allows them to be tax free. Seems a possible double standard.

Originally Posted by laboutj (Post 1882331)

Speaking of the bonds, do they ever get refinanced? I'm in CDD 9 and looked at my bond amortization schedule, it says my interest rate is 6.963%. One would think that with the current interest rates that the bonds could be refinanced down to something a little more reasonable in regards to interest rate or term.

Originally Posted by dewilson58 (Post 1882329)

If you want to know:
CDFA - CDFA Spotlight: The Basics of Industrial Development Bonds

Originally Posted by laboutj (Post 1882331)

Speaking of the bonds, do they ever get refinanced? I'm in CDD 9 and looked at my bond amortization schedule, it says my interest rate is 6.963%. One would think that with the current interest rates that the bonds could be refinanced down to something a little more reasonable in regards to interest rate or term.