What is a CDD fee?

This is usually the first question I get from a buyer who is looking at newer construction, somewhere like Durbin Crossing in the Julington Creek area.  If you go onto wikipedia.com and type in CDD, CDD fee, or any assortment thereof – it doesn’t show much of anything in the form of an answer.  So, I thought I’d take a brief moment to describe what a CDD fee is, and hopefully save you a little time surfing the web for an answer.

First, “CDD” stands for community development district.  So, a CDD fee, is simply a fee that applies to that particular community development district.  To give an example, the Aberdeen area is a community development district.  Each parcel of land in that district has a particular fee attached.

Here’s the non-technical explanation of how a CDD fee comes into play (Disclaimer: it’s more complex than this, but you have to start somewhere).  We’ll start with – Bob the Developer - who finds a piece of land that he wants to turn into a neighborhood of single family houses.  Instead of spending millions of dollars putting in the sewer system, hooking up to city water, and laying the groundwork for electrical wiring…  Bob decides to finance the infrastructure by selling bonds to investors and using the cash to complete this portion of the project.  What’s left is a monthly payment (fee) for the owner of each parcel.  So when you buy a home in that area, you are assuming the bond payments that were attached when the community originated.  From my understanding, most of the bonds (CDD fees), in the Northeast Florida area, have a 20, 25, or 30 year term. 

For an interesting take on the whole CDD bit click here.

If you have questions about CDD fees feel free to call or text me at: (904) 434-5154.  Or, if you have helpful information on CDD fees feel free to add that in the comments section.

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