Are you house hunting and curious about the prevalence of H.O.A.s, C.D.D.s and maybe even an HOA vs. a CDD? Let’s take a look at these 2 acronyms, what they mean and how it may apply to your search. I’ll plan to dig deeper into HOAs and CDDs independently in a future post.
What is a H.O.A.?
An H.O.A. is short for Home Owners Association and you will find these are very common in Florida. An iProperty Management report indicates there are 48,940 HOAs in Florida. Approximately 9.65 million people live in HOA communities here which represents roughly 44.8% of residents. This observed membership rate is well above the national average. Residents pay fees/dues to their H.O.A. to cover things like property upkeep and maintenance along with amenities. Fees are not always limited to the regular dues/payments. Depending on the age of the community and/or health of the reserve fund, there may be special assessments in addition to regular fees. H.O.A.s often have rules that address landscaping standards, fencing, paint color, vehicle storage, livestock among other topics.
What is a C.D.D.?
CDD is an abbreviation for Community Development District. These are local, government entities that provides for the infrastructure in planned unit developments (P.U.D.s). These infrastructure components often include roads, utilities and amenities. CDD fees allow developers to finance their costs via a bond. The bond gets repaid by the homeowners in the community. The bond has a fixed end date – but after pay off, there are often operations and maintenance costs that remain. Homeowners will find the CDD assessment on their tax bill and it will be included in your annual tax bill (which if you escrow your taxes – gets paid via your mortgage).
HOA vs. CDD
At a high level – HOAs are private companies charged with operation of a community. Whereas CDDs are taxing districts that allow for the ability to impose and raise taxes to pay off issued bonds that cover the infrastructure. It is possible to find homes with neither fee associated, solely within an HOA or subject to both an HOA and CDD. Just remember that the likelihood of finding amenities and other perks diminishes when looking outside of HOAs and CDDs. In the St. Johns area – SilverLeaf is a no CDD community that does have an HOA.
As you start your home search, you will find a number of acronyms. HOAs and CDDs come with fees and should be closely assessed as they will have an impact on your budget.