The difference between an HOA and a CDD

HOA and or CDD

When it comes to buying a home, especially if it is your first, you need to have a clear understanding of the difference between an HOA ( Home Owners Association)  and a CDD ( Community Development District). Today, many homes need to be built inside of boundaries. These boundaries make up a named community. During the city/county planning phase, the city zoning planners and builders determine what it will take to improve the area so that additional people can live and play. The two types of communities are very different, and which one you prefer is always a personal choice. Some communities even have both HOA and CDD included. Champions Gate, located in Osceola County and near Disney World, is one such community.


You will encounter different types of fees depending on which one you choose. Typically, HOA fees cover services such as maintenance and landscaping. Some HOA fees will include trash or Dumpster areas, water, and cable TV. Condominium Associations also may cover roof replacement for an additional assessment each year. Some communities include lawn service in the front yards as well as exterior painting after a certain number of years. Usually, there are additional costs if a community pool, recreation area, and recreation activities are available.

Lake Ashton is a community that has both an HOA and A CDD fee requirement. Lake Ashton is known for being a retirement community and boasts an exceptional golf course. You will also find that HOA fees are completely separate from the mortgage you pay on your home. You may find yourself paying your HOA fees once a month, or on a yearly basis. This is one fee that does NOT get rolled into your mortgage payments. The builder of the community hires a management company to oversee yearly payments. The HOA management Company hires personnel that scout the community to ensure rules are being followed. HOA management companies also have local attorneys to secure unpaid balances through the courts.


Some builders choose to create a bond that folds new roads, additions to the local school, sidewalks, sewers, fire and ambulance services, etc. into one lump sum. Typically, a builder must pay a small percentage of the bond upfront. Each homeowner is responsible for the remainder of the cost, usually in the millions of dollars. Some communities even have both HOA and CDD included. Champions Gate, located in Osceola County and near Disney World, is one such community. It is a popular area based on its proximity to the theme parks.

In general, a CDD will impose fewer rules on you as a homeowner than HOA does. Additionally, you will need to abide by the rules governing the CDD management company. Property taxes come due in November of each year here in Polk County, Florida. CDD fees typically paid through your property taxes. If the home you purchase pays $3500 in taxes, CDD fees are then added and the total taxes can exceed double that amount. This fee will never leave that home.

The CDD fee may, over time be reduced once the municipal bonds are paid off. However, operations and management fees, road repairs, school improvements, etc will never dissipate. It is also important to note that CDD fees are built into your monthly mortgage payment because they are paid through your property taxes. In addition, these fees cover amenities that the whole community uses, including public parks, schools, and swimming pools. You will often find that purchasing a home in a CDD community may be more expensive than purchasing a home in an HOA community.

Please feel free to read my article HERE about adding more VA approved Condominium Associations in Polk County. Veterans need more options when it comes to community living.

About the Author

I have been a Realtor in Central Florida since 2006. I live and work in Polk County. I am a straightforward person who refuses to cut corners and places emphasis on honesty and integrity in the home buying and selling process. I firmly believe that it is my duty to serve others and to use my negotiating skills to obtain the best price for the sale of any home. I will take disciplined initiative in all aspects of any transaction, invests timeless effort to build a strong and lasting relationship with all clients, and streamline all aspects of the real estate processes with exceptional skill and diligence. I take pride in professionalism and continue to educate myself and adapt to the ever changing conditions of the real estate market.

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