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Bond Questions

When developers construct facilities or communities in The Villages, FL, they invest in building roads, common areas, utilities, and other essential infrastructure for the properties. They then pass that cost to the homeowner in what is referred to as a Bond. Once a resident moves in, they are required to pay a fee to cover the development costs incurred by the Community Development Districts.

This fee, known as the “Bond”, represents each lot’s portion of the expenses for constructing and maintaining infrastructure within its District / Area. The payment can be made in various ways: in full at the closing date, in full any year thereafter, or annually through the property tax bill over the bond’s lifespan. When paying it yearly, within your Non-Ad Valorem Assessments, you will be paying interest which varies and can make your tax payment jump. They are paid over a 20 or 30 year period which if you do the math can cost you 3x the original cost. This makes buying an older home with little or no bond attractive. Additionally it is important to note that the size of the home the higher the bond. Patio homes have the lowest fee while Premier Homes can carry a heavy one up to 70k in the newer areas.

Let’s compare the Villages Bond to other developments. In some places, this cost is labeled an ‘impact fee’ and may be included in the home’s price. In The Villages each new home is associated with a distinct bond and again the size of the home in that District matters. The bond is transferable upon the property’s sale, meaning new owners are responsible for any remaining bond amount. It is important to note the Bond is not a cost that can be included as a feature in a home, however it is more attractive when selling a home to a potential purchaser if the bond is paid.

The encouraging news is that these fees get paid off eventually. If you’re buying a pre-owned home, there’s a chance that the bond for that property may have already been settled by the previous owner. This system plays a role in maintaining the high aesthetic standards of The Villages community. It is not a bad thing but definitely something to take note of when you are purchasing.

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