What Are CDD Fees — and Why Should New Construction Buyers Care?

You’ve been touring new construction communities in St. Johns County — Silverleaf, RiverTown, Shearwater, Middlebourne — and you keep seeing the same three letters on the listing sheet: CDD. Sometimes there’s a dollar amount next to it. Sometimes it’s buried in the fine print. Sometimes the on-site agent breezes past it like it’s nothing worth discussing.

It’s worth discussing.

CDD fees are a permanent part of owning a home in most master-planned communities in St. Johns County. They affect your monthly payment, your tax bill, your long-term cost of ownership, and in some cases your ability to qualify for a mortgage. Understanding them before you sign a contract — not after — is one of the most practical things you can do as a buyer.

Here’s what you actually need to know.

What a CDD Is

A Community Development District is a special-purpose unit of local government, created under Chapter 190 of the Florida Statutes. That language sounds bureaucratic, but the concept is straightforward: when a developer wants to build a master-planned community, they need roads, sewer lines, stormwater systems, a clubhouse, pools, parks, and a hundred other things before the first family moves in. That infrastructure costs tens of millions of dollars.

Rather than paying for it all out of pocket — or asking the county to absorb the cost — the developer creates a CDD and issues bonds. Those bonds fund the construction. The debt is then repaid over time through annual assessments paid by the homeowners who live in the community. You’re not just buying a house. You’re also inheriting a share of the neighborhood’s infrastructure debt.

CDDs are governed by a board of supervisors. Early on, the developer controls the board. As homes are sold and the community builds out, control shifts to elected homeowners. At that point, residents have a direct voice in how the district’s money is spent — which is more accountability than most buyers realize they’re signing up for.

What the Fees Actually Cover

CDD assessments typically have two components, and understanding the difference matters.

The first is the debt service assessment — the portion that repays the original infrastructure bonds. This covers what was built: roads, sidewalks, drainage, utilities, the amenity center, the resort pool, the fitness facility. This component follows a fixed repayment schedule tied to the bond term, often 20 to 30 years. It doesn’t fluctuate much year to year, and it can sometimes be paid off early (more on that below).

The second is the operations and maintenance assessment — the ongoing cost of running the community. Landscaping common areas, maintaining the pool, keeping the fitness center staffed and equipped, managing the stormwater system. This portion is set annually by the CDD board and can increase over time as costs rise.

When you see a CDD fee quoted on a listing or in a builder’s sales office, it typically represents both components combined. Ask for the breakdown. A $2,500 annual CDD fee that’s $1,800 debt service and $700 O&M is very different from one that’s $800 debt service and $1,700 O&M — because the O&M portion will likely grow, while the debt service won’t.

How CDD Fees Show Up on Your Bills

In St. Johns County, CDD assessments are collected as a non-ad valorem line item on your annual property tax bill, handled by the St. Johns County Tax Collector. They are not part of your property tax rate — they’re a separate charge that appears alongside your taxes.

If you have a mortgage, your lender will typically escrow for your CDD fees along with your property taxes and homeowner’s insurance. That means the annual CDD amount gets divided by 12 and folded into your monthly payment. A $3,000 CDD fee adds $250 per month to your housing cost — and that figure matters when your lender calculates your debt-to-income ratio for qualification purposes.

Tell your lender about the CDD early. Some loan programs have specific requirements around special assessments, and a surprise CDD line item discovered during underwriting can create problems you don’t want two weeks before closing.

CDD Fees Are Not HOA Fees

This is the source of more buyer confusion than almost anything else in new construction. They are not the same thing, and many communities have both.

Your HOA handles the rules and the day-to-day aesthetics of community life — what color you can paint your door, whether you can park a boat in your driveway, maintaining the entrance signage. HOA dues are paid to a private association and are generally not deductible.

Your CDD handles the infrastructure and the large-scale amenities, and it operates as a government entity with the authority to lien your property if assessments go unpaid. That’s not a minor distinction. CDD non-payment has real legal consequences.

When you’re building your total cost of ownership for a new home in St. Johns County, you need both numbers — the HOA dues and the CDD assessment — added together to get an accurate picture of your carrying costs.

Can You Pay Off the CDD?

Sometimes. The debt service portion of a CDD can sometimes be prepaid — essentially paying off your share of the infrastructure bonds early so that component no longer appears on your tax bill. You’ll see resale listings advertised as “CDD bond paid” or “no bond,” which means the previous owner prepaid the debt service. The O&M portion, however, never goes away as long as you own within the district.

Whether prepaying makes financial sense depends on the interest rate on the bonds, how long you plan to stay in the home, and what you’d otherwise do with that capital. It’s a calculation worth running with your financial advisor, not a decision to make on the spot in a builder’s sales office.

Also worth knowing: in a new construction purchase, the builder may offer to pay the CDD bond as an incentive. That offer has real value — get it in writing and make sure you understand exactly what’s being paid off and what remains.

What to Ask Before You Sign

The on-site agent will give you a CDD number. Here’s what to do with it.

Ask for the full breakdown between debt service and O&M. Ask when the bonds were issued and when they mature. Ask whether the O&M assessment has increased in the last three years and by how much. Ask whether there are any pending special assessments or new bond issuances being discussed at the CDD board level — new phases of a community sometimes mean new bonds, and existing homeowners can end up absorbing costs related to infrastructure that benefits future phases.

Ask your lender to run your debt-to-income calculation with the CDD included. Ask your title company to pull the recorded master assessment lien and confirm how the assessment will be handled at closing. And if you’re buying a resale in a CDD community, get a written payoff or assessment statement directly from the district manager — don’t rely solely on what the listing says.

None of this is meant to scare you off communities with CDD fees. Some of the most desirable neighborhoods in St. Johns County have them, and the amenities those fees fund are a real part of what makes those communities worth living in. The resort-style pool that would otherwise cost $50,000 to build behind your house is already there, maintained by professionals, because of the CDD. That has genuine value.

The goal isn’t to avoid CDDs. The goal is to understand exactly what you’re paying, why, and how it will affect your budget over time — so the number on your tax bill never catches you off guard.

An Independent Set of Eyes Helps

Builder sales agents are required to disclose CDD information, but they’re not required to walk you through every implication for your specific financial situation. That’s not their job — and it’s not where their loyalty lies.

As an independent buyer’s agent, part of what I do is make sure the full cost of ownership is clear before you make a commitment, not after. That includes CDD fees, HOA dues, projected tax rates, and anything else that affects what the home actually costs to own month to month and year to year.

If you’re exploring new construction in St. Johns County and want someone in your corner who’s looking at the whole picture, let’s talk.