What you need to know about HOAs and CDD fees

Are you wondering what it’s going to be like to now have an HOA fee and CDD fee at your new home? These fees are very common and once you learn about them, it won’t take much thought to maintain them.

When you choose a gated community or community with amenities like golf and a clubhouse, you’ll likely have an HOA and CDD fee which allows these amenities to be well maintained for you. The CDD is the Community Development District and the HOA is the Homeowners Association that will make life easier in your new neighborhood. Take a look at their fees and what they cover for you.

DSC_9255edt.jpg

What is the CDD?

Your Community Development District is going to require CDD fees that help with things you use on a daily basis. They are a type of government entity that is going to take care of the roads you use, the amenities for a planned unit development, and the utilities. If your new neighborhood has a CDD, which means this community is going to have wonderful amenities, and possibly community events or an active staff to help you with whatever you need.

The CDD works with a planned community developer to help fund the expense like a loan which is later repaid by homeowners in the community through the fee. Your fee will go towards the actual bond repayment costs and partially towards the continued maintenance of the community you live in. The bond will have an end date and you can always ask when the bond will be paid off knowing that you’ll only then be required to help with the operations and maintenance portion.

What does the HOA do?

Next, comes the Homeowners Association fee that you’ll likely have in your new community. The HOA fee will vary for each subdivision, but it’s typically a set fee that you’ll owe each year or each month to help with the community you live in. the HOA does great work for homeowners, offering a highly desirable lifestyle in the neighborhood. They will help to keep everyone in line with the rules, put on community events, make sure the landscaping is pristine, and cover things like a security gate, cable TV, and recreational facility upkeep.

They will have authority over architectural control ground maintenance, handling landscaping, cleaning and repainting, and more. They will also give their homeowners a chance to vote on issues and a chance to get involved with the community. It’s a great way to live in a community that you know they are keeping looking pristine and you won’t have to worry about your neighbors doing anything that may offend since there are rules that everyone must agree to.

If you have a home with both a CDD and an HOA, your HOA will deal more with your neighborhood condition and be making sure things are falling within the community covenants while your CDD work more on the infrastructure, amenities, and utilities. In a community with only an HOA, you’ll likely see them as a part of the community to maintain things like the community pool, playground, and common areas. In either case, you could be fined from your HOA if you don’t abide by the rules.

When you buy a home, make sure to ask if there is a CDD and HOA, because the fees for these programs will be added onto your monthly mortgage payment.