Homes For Sale in The Villages Bond Paid
The Villages Community Development District (CDD) commonly referred to as “The Villages Bond” is a municipal instrument used to finance the infrastructure of The Villages. These bonds are generally financed for a term of 25 years. There are established for each neighborhood but can include multiple or parts of others. In the early years, The Villages bonds were relatively inexpensive but more recently have grown to over $40,000 for newer homes ($3,000+ per year). It is also important to note the interest rate of the respective bonds as they do not get refinanced. They set at the interest rate of the time which could be as low as 3% or over 7%.
In Layman’s terms, the bond is a tool used by developers to confound potential buyers and make their home offerings seem better than they really are. Aside from the Villages, up until recent years, most homebuilders in Florida included the community infrastructure cost in the price of the home which in our opinion is far more straightforward and easier for buyers to properly access value.
You may analyze the bond payments as to what best suits your needs, but the proper way to evaluate a home’s value is to add the remaining bond balance to the price of the home. We have seen buyers rationalize the bond payments many ways, especially those paying cash. However, when it comes time to sell you are effectively selling a home at its present value + the added debt of the bond. If you intend to purchase a home in The Villages with cash, you should consider the effect of the bond on a mortgage payment as many future buyers certainly will.
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