Posted by Ben Wills in Home Buying

When navigating the world of real estate and homeownership, you may encounter various terms that require clarification. One such term is a "CDD fee." While not every community has them, CDD fees play a significant role in funding the development and maintenance of modern communities.

At M/I Homes, we understand the intricacies of community development and how these fees contribute to creating thriving, desirable communities with unmatched amenities and features.

What Are CDD Fees?

CDD stands for Community Development District, which is a special taxing district established to fund infrastructure and services within a particular development or community. CDD fees, paid by property owners, cover essentials like roads, utilities, landscaping, parks, and amenities that enhance homeowners' lifestyles.

Living in a CDD community offers the advantage of low-maintenance living, as shared spaces and infrastructure are professionally managed, giving residents more time to enjoy their homes and amenities.

How CDD Fees Are Structured

CDD fees are typically included as part of your annual property tax bill and can vary based on the district, the amenities provided, and the overall budget of the CDD. Key points to consider include:

  • Bond Financing: Many CDDs fund their projects by issuing bonds, which property owners repay through their fees over a designated time frame, typically 20 to 30 years.
  • Annual Assessments: CDD fees are assessed annually and may be adjusted based on the district’s financial needs, operational costs, and the services offered.
  • Variable Fees: Fees can differ significantly between districts. Communities with fewer amenities may have lower fees, while those with extensive services and facilities may charge higher rates.

Why Understanding CDD Fees Matters

Understanding CDD fees is essential for making informed decisions about homeownership. These fees directly impact your monthly budget, so including them in your overall financial planning is key. They also contribute to higher property values by funding well-maintained infrastructure and desirable amenities, which enhance the appeal of the community.

As a property owner in a CDD, you often have voting rights, giving you a voice in how funds are allocated and ensuring transparency in community management. Additionally, knowing the details of CDD fees allows you to compare properties effectively, helping you weigh the cost of fees against the benefits of amenities and services provided.

Questions to Consider About CDD Fees

If you're exploring a property within a CDD, it's useful to ask:

  • What is the current CDD fee, and how often is it assessed? Understand the exact cost and its frequency to factor it into your budget.
  • Are there plans for fee increases or additional assessments? Ask about the district’s financial health and whether any upcoming projects or operational needs could lead to higher fees.
  • What specific amenities and services are covered by the fee? Determine whether the fees fund desirable features like pools, parks, or maintenance services, ensuring you’re receiving value for what you’re paying.
  • How is the CDD managed, and what role do property owners play in decision-making? Learn how the district is governed, who oversees it, and whether you’ll have voting rights or opportunities to influence decisions.
  • Are there any outstanding bonds that could affect future fees? Understand the repayment obligations for existing bonds, as this could impact the longevity or adjustment of fees.

Some of our new home communities in Florida feature CDDs because we believe they’re a vital component of delivering the amenities and infrastructure our homeowners deserve. Whether you’re searching for your first home or your forever home, our team is here to guide you through the process, providing transparency and support every step of the way.

Ready to find your dream home in one of our thoughtfully designed communities? Contact us today to learn more and take the first step toward your new M/I home!



Author

Ben Wills
Ben Wills

Author

​Ben Wills is the Mortgage Branch Training Officer for M/I Financial, LLC. Ben has been in the mortgage field for over 40 years and has assisted thousands of homeowners in financing new home construction.

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