[Bogie Shooter]

Originally Posted by murray607

Hi Bogie,

I did read all of the posts, but none of them said what the bond was for and whether all of the units had to pay. Because the info was not there, I had to ask.

But now I understand that it is similar to a development fee.

It may be helpful if Villages sales could put this info in their property lsitings, so people are aware up-front of extras that would be due after purchase.

thanks, Jim

From the Nuts & Bolts area of this site;Bonds
The purpose of the bond is to recover the costs of the infrastructure (sewer, water, streets, electric, cable, etc.) in your section. The bond is calculated based on the cost of the infrastructure for that section divided by the number of houses in the section. The annual amount of the bond payoff will be part of your property tax bill. I am pretty sure that the bond is a 30 year bond at 7% interest. It is like a 30 year mortgage. The bonds are fairly high south of 466. The bond goes down very little each year as most of the payment goes to interest. Be very sure to cover the bond, bond payment, length of the bond interest rate and payoff options with your sales rep or realtor. If you are buying a pre-owned property, be sure to find out how much is left on the bond.

From District Government site , www.districtgov.org ;
What is the Bond Debt Assessment for?

The bond debt assessment reflects each lot’s proportionate share of the cost of building the infrastructure within its District or for which its District has responsibility. It is the most equitable method of distributing costs between the properties that benefit from the infrastructure. Infrastructure includes storm water systems, underground pump stations, water retention areas, curbs, gutters, streetlights, transportation trails, underground piping, etc.

How does the District arrive at the amount? Does everyone pay the same amount?

The Bond Debt Assessment was set at the time the bond used to build the infrastructure was issued. The formula for calculating each lot’s proportionate share starts with the total cost of the bond (including interest) issued to pay for the infrastructure. That cost is divided equally among each assessable acre in the “phase” of the District for which the bond was issued. That gives you a cost per acre. The cost per acre is then multiplied by the number of acres in the unit in which you live. That gives you the obligation for the unit as a whole. The unit total cost is then divided by the number of lots or parcels in the unit, and that computation gives you the amount of the assessment levied against each property. Therefore, each lot within a unit pays the same amount.

How do I pay for the Bond Assessment if I don’t pay it in full?

These assessments are scheduled to be repaid in annual charges that are in the Non-Ad Valorem section of your county property tax bill until they are paid off. The annual assessment includes principal, interest and an administrative fee.

What kind of lien is it? If I don’t pay if off, what happens when I sell my home?

The bond assessment is a lien on the land only and is fully transferable upon sale of the property. As such, the new owners are responsible for paying the remaining amount, either in full or annually on their tax bill.

Should I pay off the bond debt?

You should contact your accountant or financial advisor for advice as individual circumstances vary.

Can I pay by credit card?

No, the bond can only be paid by check (personal or bank) or money order.

Can I make a partial payment of total assessment due?

No, you cannot make a partial payment on the assessment due. Florida law requires payment in full or through the annual assessment on your tax bill.

Why is the payoff deadline late in July?

The payoff figure is good only through late July because the annual assessment roll must be certified to the Tax Collector to remove the assessment from your tax bill. It would be too late to guarantee removal of the assessment from the tax bill you receive in early November if payment was made after the payoff deadline.

When will I receive the Release of Imposition if I pay off my bond in full?

You should receive your copy of the recorded Release of Imposition approximately 4-6 weeks after paying off your bond. If the Release isn’t received by then, please feel free to call our office at (352) 751-3900. Upon receipt of your copy, it is advisable that you keep it with the deed to your property.

What happens if my bond is paid off after the cut-off date in July?

You will receive one more year of annual debt assessment on the November tax bill. The amount of the payoff will be reduced slightly for the amount of principal included in the final annual payment to the Tax Collector.
Remember: Even if you pay your bond assessment, there will continue to be an annual maintenance assessment that pays for the ongoing costs of maintaining the infrastructure.

[murray607]

Originally Posted by Challenger

The price of the house is the cash consideration plus the assumed liabilities no matter what they are called. If a realtor does not clearly point this out to a buyer , it is at least unethical(IMO). I find it hard to believe that many buyers do not consider the total purchase consideration when comparing prices unless they are misled by the sales person.

In our case(new home) we questioned the bond issue at the outset and our sales rep was unclear herself about the implications and options open to the purchaser.

We are cheerleaders for TV and have great respect for the "Developers " and what they have done . The confusion on the Bond issue needs to be dealt with since it is not the common method of financing in most other areas of the country.

This is valuable knowledge as bonds were not mentioned to us at the Villages Lifestyle Preview. I assume that the bond would have been mentioned to us during the buying process and not at closing.
Now we know, we will ask before we sign on the dotted line what the bond will be.

[murray607]

Originally Posted by Bogie Shooter

From the Nuts & Bolts area of this site;Bonds
The purpose of the bond is to recover the costs of the infrastructure (sewer, water, streets, electric, cable, etc.) in your section. The bond is calculated based on the cost of the infrastructure for that section divided by the number of houses in the section. The annual amount of the bond payoff will be part of your property tax bill. I am pretty sure that the bond is a 30 year bond at 7% interest. It is like a 30 year mortgage. The bonds are fairly high south of 466. The bond goes down very little each year as most of the payment goes to interest. Be very sure to cover the bond, bond payment, length of the bond interest rate and payoff options with your sales rep or realtor. If you are buying a pre-owned property, be sure to find out how much is left on the bond.

From District Government site , Village Community Development Districts ;
What is the Bond Debt Assessment for?

The bond debt assessment reflects each lot’s proportionate share of the cost of building the infrastructure within its District or for which its District has responsibility. It is the most equitable method of distributing costs between the properties that benefit from the infrastructure. Infrastructure includes storm water systems, underground pump stations, water retention areas, curbs, gutters, streetlights, transportation trails, underground piping, etc.

How does the District arrive at the amount? Does everyone pay the same amount?

The Bond Debt Assessment was set at the time the bond used to build the infrastructure was issued. The formula for calculating each lot’s proportionate share starts with the total cost of the bond (including interest) issued to pay for the infrastructure. That cost is divided equally among each assessable acre in the “phase” of the District for which the bond was issued. That gives you a cost per acre. The cost per acre is then multiplied by the number of acres in the unit in which you live. That gives you the obligation for the unit as a whole. The unit total cost is then divided by the number of lots or parcels in the unit, and that computation gives you the amount of the assessment levied against each property. Therefore, each lot within a unit pays the same amount.

How do I pay for the Bond Assessment if I don’t pay it in full?

These assessments are scheduled to be repaid in annual charges that are in the Non-Ad Valorem section of your county property tax bill until they are paid off. The annual assessment includes principal, interest and an administrative fee.

What kind of lien is it? If I don’t pay if off, what happens when I sell my home?

The bond assessment is a lien on the land only and is fully transferable upon sale of the property. As such, the new owners are responsible for paying the remaining amount, either in full or annually on their tax bill.

Should I pay off the bond debt?

You should contact your accountant or financial advisor for advice as individual circumstances vary.

Can I pay by credit card?

No, the bond can only be paid by check (personal or bank) or money order.

Can I make a partial payment of total assessment due?

No, you cannot make a partial payment on the assessment due. Florida law requires payment in full or through the annual assessment on your tax bill.

Why is the payoff deadline late in July?

The payoff figure is good only through late July because the annual assessment roll must be certified to the Tax Collector to remove the assessment from your tax bill. It would be too late to guarantee removal of the assessment from the tax bill you receive in early November if payment was made after the payoff deadline.

When will I receive the Release of Imposition if I pay off my bond in full?

You should receive your copy of the recorded Release of Imposition approximately 4-6 weeks after paying off your bond. If the Release isn’t received by then, please feel free to call our office at (352) 751-3900. Upon receipt of your copy, it is advisable that you keep it with the deed to your property.

What happens if my bond is paid off after the cut-off date in July?

You will receive one more year of annual debt assessment on the November tax bill. The amount of the payoff will be reduced slightly for the amount of principal included in the final annual payment to the Tax Collector.
Remember: Even if you pay your bond assessment, there will continue to be an annual maintenance assessment that pays for the ongoing costs of maintaining the infrastructure.

Thanks Bogie, a lot clearer now

[KeepingItReal]

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[KeepingItReal]

....

[Bogie Shooter]

Originally Posted by KeepingItReal

What happens if my bond is paid off after the cut-off date in July?

Why is the payoff deadline late in July?

The payoff figure is good only through late July because the annual assessment roll must be certified to the Tax Collector to remove the assessment from your tax bill. It would be too late to guarantee removal of the assessment from the tax bill you receive in early November if payment was made after the payoff deadline.

You will receive one more year of annual debt assessment on the November tax bill. The amount of the payoff will be reduced slightly for the amount of principal included in the final annual payment to the Tax Collector.

REMEMBER THIS HAS CHANGED, after a battle won with VCDD this year you may only have to pay 1/2 year's interest and not a full year as before. You are not tied to the July date only anymore. There are now 2 CUTOFF DATES for paying your bond during the year. If you pay your bond before the first cutoff date in March you will save 1/2 year's interest on your bond.

The change is fully explained on the District Government site;
Bond Interest Refund Procedures

[Ron1Z]

I would like to know why other retirement places in the area do not have Bonds?

[KeepingItReal]

...

[graciegirl]

I don't know. The Villages is unlike anyplace I have ever been.

[justjim]

The short answer is because they were not setup as community Development Districts. In "theory" the other retirement communities developer charged of the infrastructure in the cost of the house.

[Bogie Shooter]

Originally Posted by KeepingItReal

District Staff finally admitted that there was an error would have been a much better statement than determined that there was an error.

Bond Interest Refund Procedures
In early August 2012, District staff determined that there was an error in the procedures used in the calculation of bond payoff amounts when a resident elects to pay off their bonds used to fund each District’s infrastructure.

So, your point is??
I was going to post all of the procedures but decided anyone could go and read the total posting.
Why the selection you posted?
Do I hear an axe being ground?

[KeepingItReal]

....

[murray607]

Originally Posted by janmcn

Who gets away with charging 6.93% yearly interest in this day and age? After paying $1114.87 per year for 30 years, you would wind up paying $33,446.10 plus fees, for the $13,338.17 bond And from what I understand that interest is not tax deductible.

IMO, it would be better to add the cost of the infrastructure into the price of the new homes like a lot of developers do. Obviously, having the bonds separate keeps house prices lower.

Wouldn't it make more sense to do this on a line of credit or a 10 year loan?
At today's interest (based on 4%) rates, monthly payments would be $135 and the total of principal and interest for the 10 years is $16,400, much less than half the mortgage route. Total interest over the term of the loan would be $2,900 instead of $20,000.

My bank says they could lend at 5% and with the same payments, the loan would be amortized in 16.5 years and the monthly payment go entirely on principal and interest with no yearly fee of $67.00. Even with a rate of 6.93% with same monthly payemts (yearly fee included), I would amortise in 21.5 years.

We are planning to buy a 2/2 Furnished Patio Villa with closing costs of about $150,000.

$150,000 is our limit for a cash deal, so we are going to take on a
1 year term loan for the cost of the bond. I spoke to my Bank, RBC Canada and they can do this, but RBC USA (PNC) say I would need to take out a mortgage for one year on this amount (can't figure out why a mortgage for one year) and it would leave us with a $350 charge for interest for one year.
With a personal loan at 4% I would end up paying $290 interest which is close.

My concern would be, does The Villages Development insist that you use their finance for paying the Bond? And I am assuming I can pay the bond "up-front"

[Advogado]

Originally Posted by murray607

Wouldn't it make more sense to do this on a line of credit or a 10 year loan?
At today's interest (based on 4%) rates, monthly payments would be $135 and the total of principal and interest for the 10 years is $16,400, much less than half the mortgage route. Total interest over the term of the loan would be $2,900 instead of $20,000.

My bank says they could lend at 5% and with the same payments, the loan would be amortized in 16.5 years and the monthly payment go entirely on principal and interest with no yearly fee of $67.00. Even with a rate of 6.93% with same monthly payemts (yearly fee included), I would amortise in 21.5 years.

We are planning to buy a 2/2 Furnished Patio Villa with closing costs of about $150,000.

$150,000 is our limit for a cash deal, so we are going to take on a
1 year term loan for the cost of the bond. I spoke to my Bank, RBC Canada and they can do this, but RBC USA (PNC) say I would need to take out a mortgage for one year on this amount (can't figure out why a mortgage for one year) and it would leave us with a $350 charge for interest for one year.
With a personal loan at 4% I would end up paying $290 interest which is close.

My concern would be, does The Villages Development insist that you use their finance for paying the Bond? And I am assuming I can pay the bond "up-front"

From a mathematical viewpoint, there is no question that it makes sense to pay off the bond as soon as possible. You can finance the payoff any way you want. The only potential drawback is that when you sell your house, you may run into a potential buyer who is stupid, making an ill-informed decision, or has been deceived by the Developer's lack of disclosure of the bond amount in his ads for new houses. That potential buyer may make an incorrect comparison when looking at the advertised price of your house and the advertised price of competing houses that carry the bond. How often that happens, I have no idea.

[janmcn]

Originally Posted by KeepingItReal

District Staff finally admitted that there was an error would have been a much better statement than determined that there was an error.

Bond Interest Refund Procedures
In early August 2012, District staff determined that there was an error in the procedures used in the calculation of bond payoff amounts when a resident elects to pay off their bonds used to fund each District’s infrastructure.

It should be noted that this procedure has been used for the last 20 years, ever since bonds were introduced in TV as a way of paying for the infrastructure.

It's a hard to believe that only 880 owners elected to pay off their bonds in all that time. What happened to the interest collected in error since 1992?