What is a CDD or Community Development District Fee?

A question that often comes up working with home buyers in St. Johns County and Nocatee in particular is what is a CDD fee? A CDD fee is broken down into two parts. The first is the bond or debt portion. When the developer purchases land and develops it they take out a large mortgage to cover the costs. As the homes sell for the first time the developer breaks off a piece of the mortgage and assigns it to the lot. The CDD fee will vary depending on the neighborhood within the development and the width of the lot. Two homes in the same neighborhood with different size lots may have a different CDD fee. The bond is like an assumable mortgage and is paid off at some point. When the first home owner sells the home to a new buyer the bond portion of the CDD does not reset. It continues as if the original owner still owns the property but the new owner is making the payments. A buyer also has the option of paying off the CDD bond if they like.

The second portion of the CDD is Operational and Maintenance. As the name suggests homeowners fund the operational and maintenance expenses for the amenities in the communities with this portion of their CDD.

Is a CDD community right for you? That depends on your and your family’s lifestyle. In Nocatee for instance you have a splash park, spray park (beginning construction soon), and several other amenities. If you don’t think you are going to have time to use any of the amenities then I would suggest against them. On the other hand if you, your spouse, or your children would actually use the amenities then it might be worth the expense. If not then you may want to consider other communities. When a home buyer asks me what I think I usually ask them if they like the amenities enough to right a check for $2,000 to $3,000 a year for the privilege of using them. Something else to remember is the CDD is not the same as expenses charged by the HOA or Home Owner’s Association. Home owners in CDD communities often have to pay both HOA fees and CDD.

If you have any questions or would like to talk about which community is right for you and your family please register with this site or send me an email at Andrew@TheVeteransAgent.com


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