What is a BOND?
Costs associated with building streets, laying utilities, and adding retention ponds in The Villages are paid by the BOND that is assessed on new (and sometimes pre-owned) Villages' homes. How much is the BOND and who has to pay for it?
What is a bond? In The Villages, bond is a shortened term for a residential bond assessment. It is a tax-exempt bond that was paid by the builder to the community district where the house is located. It covers the village's infrastructure costs that were incurred when the house was built, such as the costs associated with running underground utilities, laying down streets, and underground water management. The first owner of the home is required to pay the bond, which is a cost above and beyond the mortgage, homeowners insurance, and property taxes. The owner can elect to pay off the bond in one lump sum, annually, or in a combination of the two. If there is a remaining balance on the bond when the house sells to a new owner, the responsibility of the balance also falls on the new owner. Bonds are intended to be paid off in 20 years, or in the case of the newer areas, 30 years. However, many homeowners pay the bond off early in order to avoid the interest that is assessed yearly on to the bonds outstanding balance. Your realtor should know whether a bond still exists on the house you are interested in. For previously owned homes, the bond may be zero if it was paid off by the previous owner. For newly constructed homes, however, bonds can be as high as $43,000 at a 4% annual interest rate. So you need to consider if a bond is still owed on a home when looking at the overall price of the home. Another resource to determine how much bond is owed on a home is to contact the Bond Unit Office at 352-751-3900 for the bond payoff for a particular home.
It's my experience that many people over-look the bond issue when shopping for a home. But it really does impact the bottom line of the cost of the home! Folks moving here, on a fixed income or with a budget in-mind, might only look at homes where the bond has been paid-off. In today's market, however, buyers may not be able to be so choosy. If you know you will hold onto your home for many years, a bond may be easier to deal with if you LOVE the house and it checks off all your boxes. However, buying a home with a smaller bond may make it easier to pay-off thus making your home more marketable in the future if you think you may sell in the next 5-10 years.