What Is a Community Development District (CDD) in Real Estate?

A Community Development District (CDD) is a special-purpose local taxing district created to finance, develop, and maintain infrastructure and amenities within a planned community. Similar to a homeowners association (HOA) or a Planned Unit Development (PUD), a CDD manages community improvements, but it has the authority to levy taxes or assessments on homeowners. These fees help fund roads, landscaping, utilities, recreational facilities, and long-term maintenance.

How a CDD Works

A CDD issues bonds to finance major development projects. Homeowners repay these bonds through yearly assessments on their tax bill. CDD fees typically have two components:

  • Bond portion — repays the original construction costs for infrastructure.
  • Operations & maintenance portion — covers ongoing upkeep of community amenities.

These charges vary by neighborhood and often remain in place for decades until bonds are paid off.

What Is the Purpose of a CDD?

CDDs allow developers to fund large community projects without raising general city or county taxes. Typical improvements funded by CDD assessments include:

  • Roads and sidewalks
  • Parks, trails, and green space
  • Utility systems and stormwater management
  • Clubhouses, pools, and recreation centers
  • Entrance features and landscaping

Once improvements are complete, the CDD continues operating like a mini-government for the community.

How CDD Fees Affect Homebuyers

CDDs can significantly impact a buyer’s monthly housing costs. Key considerations include:

  • Taxes & affordability: CDD fees are added to the annual tax bill.
  • Loan qualification: Lenders factor CDD charges into a borrower’s debt-to-income ratios.
  • Resale value: Some buyers prefer communities without CDD fees; others value the improved amenities.
  • Length of obligation: Bond portions may last 20–30 years.

Buyers should review tax records to determine the total yearly obligation before purchasing.

What FSBO Sellers Should Know About CDDs

When listing your home through a Flat Fee MLS service, you must accurately disclose CDD assessments to avoid compliance issues.

  • CDD fees appear on tax bills and must be included in MLS tax fields.
  • Failure to disclose assessments may delay closing or create buyer disputes.
  • CDD amenities can be highlighted as selling points for the neighborhood.

Brokerless ensures required tax and assessment fields are reviewed before MLS submission.

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