[hdken]

In reading through discussions on this board, the phrase "bond paid" comes up from time to time. Can someone explain what this "bond" is, its amount, what it is used for, etc. Is this specific to TV, or Florida in general? No such thing in NY.

Thanks

[graciegirl]

Someone is going to follow me and do a much better job than me explaining this. We haven't closed yet on our house so I am far from an expert. My understanding is that as each village is built, the bond or charge or sort of tax for the underlayment of the subdivision for roads, pipes, electrical, cable, sewage etc. is partly taken on by the new residents. I believe ours was $12,000 on a home costing about 230K. It can be paid off at anytime, but it is better I have been told to just pay the portion every month that would match up to the length of a mortgage. They sell one new village at a time...I think. So the older areas are paid off or the buyer paid it off sooner rather than later. My husband (aka Sweetie) is not here or I would have him explain. He handles the really big financing and I just worry about the world affairs.

Hope this helps.

GracieGirl (Still in Cincinnati)

P.S. Sounds like you haven't been here. Be careful....Don't drink the water or you will be one of us. It is wonderful.

[coppadad]

I don't know if this will work, but if it does you may want to try this website

http://www.districtgov.org/slcdd/faq.asp

(you may want to copy and paste that link into a new browser window, for some reason clicking it brings you back to the talk of the villages site)

[Indy-Guy]

This is a copy of a prvious post I hope that the Villages Kahuna is ok with me copying it and posting it

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Villages Kahuna


The "Bond"

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Think of the "Bond" as the amount of money needed to construct the roads, sewers, utility lines, irrigation systems, and so forth (the infrastructure) in The Villages. The amount spent on infrastructure construction is initially paid by the developer, but is then divided among the lots in a District based on the selling price of the homes built on each lot. A villa will have a smaller Bond than a Ranch or Premier home and becomes the responsibility of the homeowners. The Bond is a fixed amount and is listed as a closing cost for the original buyer of each new house or villa. The buyer of each house has the choice of paying the entire amount of the Bond up front as a closing cost or amortizing the payments of the Bond over a number of years--I believe the Bond is fifteen years. For that matter, a homeowner can opt to pay the remaining amount due on their Bond at any time during the tenure of the municipal bonds sold to repay the developer for his out-of-pocket expenses in paying for the infrastructure.

In the case of those amortizing their payments, the total of the cost of the infrastructure not paid by homeowners up front are combined and become the security for the issuance and sale of a municipal bond, the proceeds of which, along with all the front-end cash payments by home buyers, are paid back to the developer who "fronted" the cost of the infrastructure. So, those homeowners who opt for amortized bond payments pay the amount of their bond divided by 15 years plus their share of the interest and financing costs of the issuance of the municipal bond. Those that pay up front have no ongoing bond expenses, of course.

When an original owner who paid the Bond up front sells his house, theoretically he should be able to collect his payment back as the result of a higher market value than houses being sold by initial owners who did not pay the Bond payment up front. That's why you see "Bond Paid" in the listings of some houses for sale in TV, but not others.

There's no way of really proving whether those paying "up front" really get their money back with an elevated re-seal price, but a quick look at the prices of homes being sold in the secondary market suggests that they don't.

As far as maintenance or improvements to the elements of the infrastructure as they age or wear out, theoretically an amount is added to your monthly utility bills and cable bill sufficient to perform whatever future repairs or replacements needed. State laws govern how much the utilities must set aside and generally no additional outlays by homeowners are needed once the original Bond is repaid. That's the theory anyway. Until a few decades pass, there's no real way to prove or disprove the adequacy of the financing of the infrastructure but one seldom hears of an assessment to homeowners for items of that nature, in TV or anywhere else for that matter.

[784caroline]

If I am not mistaken, all bonds are for 30 years not 15.

[chuckinca]

Subdivision developers usually pay the site work and utilities and prorate the cost to the individual property and it is included in the sale price.

Does anyone know why the buyers in TV are given the option of paying for the prorated site work up front in their purchase (as is normally done elsewhere) or paying it on time to the county (whom I assume pays the developer as a lump sum up front and collects the bond interest from the buyers to cover the county's finance costs). Why would the county get want to involved?