Buying a new home can involve a jumble of acronyms and numbers that spin your head. At Southern Homes, we encourage customers to ask questions to feel comfortable and informed as they make decisions. Our goal is to be straightforward, “A Neighbor You Can Trust.”
One acronym that frequently crops up in new home communities is CDD fee, or Community Development District fee. CDD fees are imposed by homebuilders of a neighborhood or subdivision to pay the costs of community amenities, such as playgrounds, dog parks, or swimming pools. (This is separate from Homeowners Association (HOA) fees.) Instead of increasing the price of each home, the developer borrows money to finance those amenities.
That loan to the developer is then repaid through the CDD fees charged to home buyers by rolling that cost into the annual property tax bill. These fees are paid by the home owner typically over a 30-year period.
By creating a fee that is bundled into each homeowner’s property tax bill, the developer can advertise a lower price for their homes. Buyers must beware that they fully understand the price of their new home over the long haul. What may appear to cost less, may actually cost more.
The average CDD fee in the state of Florida is $250/month or $3,000/year. Once factored into the home loan, this CDD fee would negatively impact the home buyer’s buying potential by approximately $25,000.
Southern Homes prefers to incorporate expenses for common amenities into each home’s advertised sales price. That way, buyers can see the full cost of their new home upfront. Our Southern Homes’ communities do not have CDD fees. It might make the home price a bit higher, but we don’t want our buyers to be surprised when their approved loan amount is less than expected or when they receive their property tax bill.
Come visit us, and our team members can show you how a CDD fee would personally affect your home purchase. We always encourage you to ask questions first, so you don’t have surprises later. We look forward to meeting you and welcoming you to our community!