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CDD vs HOA: What's the Difference?

What is a CDD?

A CDD (or Community Development District) is a type of government entity that provides infrastructure such as roads, utilities, and amenities to specific planned unit development (PUD).

Most planned communities have a CDD, which means they normally have desirable amenities, possibly activity staff and community sponsored events. TPOST CDD encompasses three (3) communities: Tampa Palms III (Area3), Richmond Place (Area 6) and West Meadows (Area 7) and operates separate of their respective HOA’s.

A CDD allows the developer to finance the costs with a CDD bond through tax-free municipal bonds. This is basically a loan. That “loan” is repaid by the homeowners in the community, with each property charged an annual amount. The CDD shows as an assessment on the homeowners’ tax bill each year and is collected by the county tax collector. If you have a mortgage, this is amortized into your payment.

Usually a portion of the CDD collected is the actual bond repayment, and the balance is the continued Operations and Maintenance (O&M) of the community. The bond portion has an end date similar to a mortgage. Once the bond is paid off, you will be left with only the O&M portion to pay.

What is a HOA?

Each HOA (or Homeowners Association) can vary a bit based on the community or subdivision, but an HOA fee is basically a predetermined set fee that each homeowner in the community pays monthly, quarterly, or annually to help maintain the community. In an HOA, a homeowner is also subject to certain Covenants, Conditions, and Restrictions (CC&Rs), which outline what a homeowner may or may not do with the property.

In an HOA community, fines may be issued to homeowners who don’t abide by the CC&Rs, and some communities may even place liens against homes for broken rules and unpaid fines.

Keep in mind that homeowners pay CDD and/or Homeowners Association fees in addition to whatever mortgage payment they may have, so it’s important to factor them in (i.e., to find out exactly how what they are and how much they cost) when making a buying decision.

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