CDD Fees in St. Johns County: What Buyers Should Check

A lot of newer neighborhoods in St. Johns County, Nocatee included, come with a CDD fee. It is not the HOA dues. It shows up on your yearly property tax bill, on top of your regular property taxes.

Your lender counts it in your monthly payment. So look it up before you pick a price range, not after you fall for a house. It is one of several local costs, along with flood zones and the homestead exemption, that we cover for St. Johns County and Ponte Vedra buyers.

What a CDD is

CDD stands for community development district. Under Florida law, it is a local unit of special-purpose government (Fla. Stat. 190.003). In plain terms, it is a small government set up for a community to pay for and run things like roads, water lines and shared amenities.

That makes it different from an HOA, which is a private association. A home can have both, and each has its own bill.

The two parts of a CDD fee

A CDD board can charge two kinds of assessments (Fla. Stat. 190.021):

1. Debt. This repays the bonds the district sold to build its roads, utilities and other facilities. The law calls it a benefit special assessment.
2. Maintenance. This pays to keep those facilities running. You will often see it called O&M, short for operations and maintenance.

Both are a lien on the property until they are paid. A lien is a legal claim attached to the house itself.

Nocatee is a good example. Its district is the Tolomato Community Development District (Florida Auditor General, Tolomato CDD audit). Tolomato splits its assessment into the same two pieces: Debt, the yearly principal and interest on the bonds that built district infrastructure, and O&M, the day-to-day operations and maintenance, including landscaping and amenities (Tolomato CDD).

How it gets billed

Florida lets a CDD put its assessments on the county tax roll. When it does, the tax collector collects them the same way and at the same time as county taxes (Fla. Stat. 190.021). They print on the same combined notice as your regular property taxes (Fla. Stat. 197.3632). Tolomato's assessment is paid this way, on the county property tax bill (Tolomato CDD).

On that bill you will see two kinds of charges. Ad valorem taxes are based on your home's value. Non-ad valorem assessments, like a CDD fee, are not. The St. Johns County Tax Collector collects both and mails tax statements around November 1 each year (St. Johns County Tax Collector).

If your lender collects your taxes monthly through an escrow account, the CDD fee comes along with them, since it is on the same bill.

Why your lender cares

Fannie Mae counts special assessments in your monthly housing expense, next to principal, interest, insurance, taxes and association dues (Fannie Mae Selling Guide B3-6-03). That total is weighed against your income in your debt-to-income ratio, which is your monthly debts compared to what you earn.

So a CDD fee takes up room in that ratio. Two homes at the same price can qualify you differently if one has a CDD and the other does not. For how the whole monthly number adds up, see how much house you can afford.

Fannie Mae also expects the lender to know whether a home is in a special assessment district like a CDD, and the appraiser has to consider how the assessment affects the home's value (Fannie Mae Selling Guide B4-1.4-09).

Buying new or resale: who tells you

If you buy new, Florida law puts the warning in your contract. Each contract for the initial sale of a lot or home in a CDD must include a notice that the district may levy taxes and assessments on top of county taxes. It has to sit just above your signature, in bold type larger than the rest of the contract (Fla. Stat. 190.048). The district must also make its public financing information available to prospective residents and file it in the county property records (Fla. Stat. 190.009).

That bold notice rule covers the initial sale. If you are buying a resale, do not count on seeing it. Look the fee up yourself.

How to look it up before you make an offer

1. Check the tax bill. Search the address in the St. Johns County Tax Collector's online property tax records and look for a CDD line among the non-ad valorem assessments.
2. In Nocatee, use the district's lookup. Tolomato publishes a yearly assessment lookup on its website.
3. Ask about the debt payoff if it matters to you. Tolomato says an exact payoff figure for the Debt part requires an estoppel letter. That is an official statement from the district of what is owed as of a certain date.
4. Use this year's number. An old listing sheet or a neighbor's guess is not the bill.
5. Hand the number to your loan officer. Your pre-approval should include it, so the price range you shop is one you can actually carry.

Next step

Shopping in Nocatee or another St. Johns County neighborhood with a CDD? Call Jason at 904-389-4635 with the address and we will build the CDD into your monthly number before you make an offer. For the loan programs we use across the county, see our St. Johns County and Ponte Vedra home loans page.