Are you seeing both CDD and HOA fees on Lake Nona listings and wondering what they mean for your monthly payment? You are not alone. Many buyers moving to the Medical City area and nearby villages need a clear, side‑by‑side view of these fees before making an offer. In this guide, you will learn what each fee covers, where it shows up in your budget, and how to compare communities with confidence. Let’s dive in.
CDD vs HOA in Lake Nona: the basics
What is a CDD?
A Community Development District is a special‑purpose local government created under Florida law to plan, finance, build, and maintain public infrastructure for a community. CDDs can fund roads, stormwater systems, utilities, lakes, and community facilities. They have the power to issue bonds and to levy non‑ad valorem assessments to repay those bonds and cover operations.
CDD boards start under developer control and then shift to resident control as the community matures. Because a CDD is a governmental entity, it follows public meeting and records rules. That gives you access to budgets, meetings, and assessment schedules.
What is an HOA?
A Homeowners’ Association is a private association formed under recorded covenants, conditions, and restrictions. The HOA maintains private common areas and amenities, hires vendors, enforces community rules, and collects dues. The HOA is governed by a board of directors, usually residents once the developer turns over control.
Unlike CDD assessments, HOA dues are not on your property tax bill. The association bills you monthly, quarterly, or annually, as set in the governing documents.
Key differences at a glance
- CDD is a public special district. HOA is a private association.
- CDD assessments often appear on your Orange County property tax bill as non‑ad valorem items. HOA dues are billed directly by the association or its manager.
- CDD assessments can repay long‑term bonds and fund ongoing operations. HOA dues fund community operations, reserves, and private amenities.
- Both can place liens for nonpayment. The process and priority differ by entity and governing law.
How fees are charged and what they cover
How CDD assessments work
A CDD typically has two parts to its budget. One part repays bond principal and interest used to build infrastructure. The other funds operations and maintenance for facilities controlled by the district. The board adopts an annual budget and assessment schedule that allocates costs to properties in the district.
In practice, you will usually see the CDD assessment as a non‑ad valorem line on your tax bill each year. Many owners pay it through their mortgage escrow. In early phases, assessments can be higher while debt is being repaid. Developers sometimes subsidize early obligations, so timing matters.
How HOA dues work
HOA dues fund private amenity operation, landscaping for common areas, insurance for shared assets, community management, and reserves for future repairs. The board sets the budget per the governing documents and may levy special assessments for large expenses when reserves are not enough.
Dues are billed by the HOA monthly, quarterly, or annually. Some communities also charge transfer, initiation, or capital contribution fees at closing. Always confirm what your dues include so you can compare communities fairly.
Who sets amounts and how they change
- CDD: The board adopts a budget each year. Bond repayment schedules can run for decades, which creates a baseline cost until maturity or refinancing. Operations costs can change year to year.
- HOA: The board sets the annual budget and dues. Good HOAs conduct reserve studies and fund reserves to avoid surprise special assessments.
What this means for your budget
Build a complete monthly payment
To avoid surprises, add both CDD and HOA costs into your monthly budget. A simple framework:
- Start with mortgage principal and interest.
- Add property taxes and homeowner’s insurance.
- Add HOA dues.
- Add the monthly equivalent of the annual CDD assessment by dividing it by 12.
This “total monthly obligation” helps you compare homes and neighborhoods the same way. Even small differences add up over time, so a clean, apples‑to‑apples view is key.
Mortgage and escrow implications
Lenders treat both HOA dues and recurring CDD assessments as ongoing obligations. Underwriters include them in your debt‑to‑income review. Some loan programs escrow non‑ad valorem assessments that appear on your tax bill. Ask your lender how they handle CDD items and whether any portion will be collected at closing or through monthly escrow.
If a seller or developer is offering a credit that affects your first‑year assessment, make sure it is clearly shown on your loan estimate and closing disclosure.
Closing‑day details to verify
- Confirm the current year CDD assessment and whether it is prorated at closing.
- Review the CDD’s adopted budget and assessment schedule for the year you take ownership.
- Verify HOA dues timing, what services are included, and any transfer or capital contribution fees.
- Ask about any planned special assessments for either the CDD or HOA.
Long‑term ownership factors
Bond timelines and special assessments
CDD bonds often have long maturities. Knowing the remaining term helps you understand how long debt service will appear on your tax bill. CDDs and HOAs can both levy special assessments in certain cases. Review meeting minutes and budgets to see what might be coming.
Resale and marketability
Buyers in Lake Nona compare homes by total monthly cost. If one village has higher assessments than another, that difference can affect demand and pricing. Clear disclosure and documentation help you set expectations when you sell.
Taxes and recordkeeping
The tax treatment of assessments can vary. Some CDD charges relate to bond repayment and may be treated differently than property taxes for federal income tax purposes. HOA dues are generally not deductible for personal residences. Keep clear records and consult a tax professional for guidance on your specific property.
Compare Lake Nona communities with confidence
Documents to request
- CDD
- Adopted annual budget and assessment schedule for the current year
- Bond documents or official statement showing indebtedness and repayment
- Engineer’s report or assessment methodology
- Meeting minutes for the past 12 to 24 months
- District manager contact for follow‑up questions
- HOA
- CC&Rs, bylaws, rules and regulations
- Most recent financials and operating budget, including any reserve study
- Minutes for the past 12 to 24 months
- Insurance summary and any pending litigation disclosures
- Statement of assessments and any upcoming special assessments
Data points to compare
- Current annual CDD assessment for a home similar to yours
- HOA dues and what they include, such as landscaping, internet, or trash
- HOA reserves, including reserve balance per unit
- Remaining bond term and total outstanding CDD debt per unit, if available
- Developer turnover timing for both CDD and HOA boards
Smart questions to ask
- Are any developer subsidies in place, and when do they end?
- Are new bonds or capital projects planned in the next 1 to 5 years?
- How are assessments calculated and under what conditions can they increase?
- Does the HOA have an annual cap or inflation clause, and what has the increase history been?
- Is the CDD assessment on the tax bill, or billed separately?
Red flags to watch
- No recent reserve study, or reserves that are very low relative to assets
- Large pending litigation against the HOA or CDD
- Difficulty obtaining budgets, minutes, or bond documents
- Rapid scope changes that add infrastructure debt without clear allocation
- Very high initial CDD assessments with limited explanation of what they fund
Quick worksheet: your total monthly obligation
Use this simple checklist to evaluate any Lake Nona home:
- Mortgage principal and interest.
- Property taxes.
- Homeowner’s insurance.
- HOA dues.
- Annual CDD assessment divided by 12.
- Add items 1 through 5 for your total monthly obligation.
If you are comparing multiple villages, fill out this list for each property so you can choose the best overall fit.
Local process tips for Lake Nona buyers
- Review the most recent property tax statement to see non‑ad valorem assessments tied to any CDD.
- Verify the exact parcel’s assessment from the CDD’s adopted schedule for the current year.
- Read the HOA’s rules to understand use restrictions, design review, and amenity access.
- Check 12 to 24 months of meeting minutes for both CDD and HOA to spot trends.
Work with a trusted local advisor
CDDs and HOAs are part of life in many Lake Nona communities. When you understand how each fee works, you can budget accurately, negotiate with clarity, and plan for the long term. If you want a side‑by‑side comparison for homes you are considering, or help pulling the right documents, reach out to Omar Cotto. Let’s build your Lake Nona strategy with clear numbers and a calm plan.
FAQs
What is a CDD in Florida and how will it appear on my Lake Nona tax bill?
- A CDD is a public special district that funds infrastructure with non‑ad valorem assessments, which usually show as separate line items on your annual Orange County property tax bill.
Do I pay both CDD and HOA fees in Lake Nona communities?
- Many master‑planned villages have both. The CDD assessment funds public infrastructure and operations, while the HOA dues fund private amenities and community management.
Can CDD or HOA fees increase after I buy a home?
- Yes. CDD operations budgets can change annually and bond schedules run for years. HOA dues can rise with budget needs, and special assessments may be levied per the governing documents.
Are CDD or HOA fees tax deductible for my primary home?
- It depends on the specific charge. HOA dues are generally not deductible. Some CDD assessments are treated differently than property taxes. Consult a tax professional for your situation.
When do CDD and HOA boards transition from developer to residents?
- CDDs and HOAs start under developer control and transition after certain benchmarks or timelines in their governing laws and documents. Ask for turnover timelines and status in the communities you are considering.
