Buying a home in Estero and seeing a CDD line on sample tax bills? You are not alone. Many of Estero’s master-planned and resort-style neighborhoods use CDDs to fund roads, lakes, lighting, and other amenities. In this guide, you will learn what CDD fees are, how they show up on your Lee County tax bill, what to request before you buy, and how CDDs can affect your mortgage and closing. Let’s dive in.
What a CDD is in Florida
A Community Development District, or CDD, is a local, special-purpose government created under Florida Statutes, Chapter 190. Developers often use CDDs to finance the up-front cost of public-style infrastructure through tax-exempt bonds. Over time, property owners within the district repay those bonds and fund ongoing operations through annual assessments.
In Estero and across Lee County, CDDs are common in newer master-planned communities where lakes, parks, water management systems, and streetscapes were built at scale. A CDD is governed by a board of supervisors. Early in a community’s life, the developer typically controls the board, then residents elect supervisors as the community matures.
How CDD fees work
CDD assessments usually include two parts: repayment of bond debt and annual operations.
Debt service assessments
Debt service, sometimes called capital assessments, repays the bonds used to build infrastructure. These charges follow the bond schedule and can run for decades. The district’s bond documents and assessment roll outline how much each property pays in a given year.
Operations and maintenance
Operations and Maintenance, or O&M, funds day-to-day items like landscaping, lake and stormwater upkeep, streetlights, insurance, and administration. O&M is set each year in the district’s adopted budget. O&M can change over time based on maintenance needs and inflation.
How fees appear on your bill
In Lee County, CDD charges typically appear as non-ad valorem assessments on the annual property tax bill. You will see them listed separately from County and School taxes. If assessments go unpaid, they can become liens, and the district has legal remedies to collect, including potential foreclosure in some situations under Chapter 190.
CDD vs HOA in Estero
It is easy to confuse CDD assessments with HOA dues, but they are not the same.
- CDD assessments are governmental, non-ad valorem charges collected on your county tax bill. They fund public-type infrastructure and district operations.
- HOA dues are contractual fees paid to a homeowners association. They cover private community services, amenities, and rules enforcement, and they are billed separately from your tax bill.
You will often have both in an Estero community. Your total carrying cost includes taxes, any CDD assessments, HOA or condo dues, insurance, and utilities.
How to check if a property has a CDD
Before you make an offer, take a few simple steps to confirm CDD status:
- Review the Lee County Property Appraiser record for the parcel and look for non-ad valorem assessments on the most recent tax bill.
- Ask your agent, the seller, or the title company for a CDD disclosure, the district’s assessment roll excerpt, or district contact information.
- Check recorded plats and deed restrictions, which often note that property lies within a specific CDD.
- Call the Lee County Tax Collector or Property Appraiser offices for guidance on locating the current year’s non-ad valorem charges for the parcel.
Documents to request before you buy
During your inspection period, request and review the following. These show current costs and future obligations.
- Current year tax bill showing non-ad valorem CDD assessments
- The district’s adopted budget for the current and prior year
- Assessment roll and debt service schedule for your lot type or unit
- Bond amortization and payoff schedule, plus any bond covenants
- Recent district meeting minutes, audits, and financial reports
- Any engineer or feasibility reports that reference upcoming capital work
These records come from the district manager or clerk. Your title company can also help gather payoff letters and confirm proration language.
How CDDs affect loans and closing
Lenders account for recurring assessments when they qualify you. Expect your lender to request the current tax bill and details of the annual CDD amount. If a district is considering a special assessment, or if O&M is rising, your lender may ask for more documentation.
At closing, CDD items are usually prorated like property taxes, but contract language varies. Make sure your contract and settlement statements clearly show any proration, outstanding assessments, or payoff instructions.
Can a seller pay off CDD debt?
Sometimes, yes. In certain districts, bond documents allow a partial or full payoff of the remaining principal at closing. If you or the seller plan to do this, you must obtain an official payoff letter from the district or bond trustee and confirm instructions with the title company. Even if the debt is paid off, an O&M assessment usually remains to cover ongoing maintenance.
Risks and long-term considerations
CDD assessments affect affordability because they add to your annual housing costs. Future buyers will inherit similar obligations, which can influence marketability and resale value. Special assessments can occur if the district faces revenue shortfalls or undertakes new capital projects.
CDDs often have long bond terms, 20 to 30 years or more, so debt service can continue well beyond the early years of a community. O&M assessments continue as long as the district operates and maintains infrastructure.
Estero buyer checklist
Use this quick checklist to keep your due diligence on track.
- Confirm CDD status early by checking the property appraiser record and asking for written disclosure.
- Obtain the current tax bill and non-ad valorem detail for the parcel.
- Review the district’s adopted budget and most recent audit.
- Confirm your parcel’s allocation on the assessment roll for both debt and O&M.
- If a payoff is planned, request a district payoff letter and bond amortization schedule.
- Read recent meeting minutes to spot pending projects or special assessments.
- Provide your lender with the tax bill and CDD documents, and confirm how they will treat recurring assessments.
- Verify contract language for proration and confirm any liens, payoffs, or trustee instructions with the title company.
The bottom line for Estero buyers
A CDD is not a deal breaker. It is a financing and maintenance tool that helps build and care for the community features you enjoy. The key is clarity. When you verify the district status, understand the assessment structure, and review the official documents, you can budget accurately and negotiate confidently.
If you want a steady hand through the process, we are here to help you gather documents, interpret assessments, and coordinate with your lender and title team. For personal guidance on Estero communities and a smooth closing, connect with the MJ Team.
FAQs
What is a CDD in Florida and why do communities use it?
- A Community Development District is a local government under Chapter 190 that finances and maintains infrastructure like roads, lakes, lighting, and water management in master-planned communities.
How do CDD fees show up on my Lee County tax bill?
- CDD assessments usually appear as non-ad valorem line items separate from ad valorem taxes and are billed and collected by the Lee County Tax Collector.
Are CDD assessments the same as HOA dues in Estero?
- No, CDD assessments are governmental charges on your tax bill, while HOA dues are contractual fees billed by the association for private services and amenities.
How can I confirm a specific Estero home has a CDD?
- Check the property appraiser record for non-ad valorem assessments, request a CDD disclosure or assessment roll from the seller or title company, and review recorded plats or deed notes.
Can a seller pay off the CDD bond at closing to reduce my future costs?
- Sometimes, if the bond documents allow it; you will need an official payoff letter from the district or trustee and written instructions for the title company to process it.
What documents should I review during the inspection period regarding CDDs?
- The current tax bill, the district’s adopted budget, assessment roll, bond amortization or payoff schedule, recent audits, and meeting minutes that note pending projects or assessments.
How might CDD assessments affect my mortgage approval?
- Lenders account for recurring assessments when calculating your debt-to-income ratio, so your loan officer will request the tax bill and written evidence of annual CDD amounts.
