Trying to decide between a condo and a TIC in San Francisco? You are not alone. In a city of classic multi-unit buildings and new high-rises, the ownership form you choose will shape your financing, risk, and resale options. This guide breaks down what each choice means for your budget today and your flexibility later. Let’s dive in.
What is a condo?
A condominium gives you a separately deeded unit plus a shared interest in the common areas. The building is governed by an HOA that enforces rules, maintains the property, and collects dues. Lenders are familiar with condos, so financing options are broader if the project meets agency standards and the HOA is financially sound.
What is a TIC?
A tenancy in common, or TIC, is co-ownership of an entire property with contracts that give you exclusive rights to occupy a specific unit. The rules come from a private TIC Agreement, not a recorded condo map. Financing is more specialized, and liability can be shared depending on how the loan and agreement are structured.
Key differences at a glance
- Ownership: Condo is a deeded unit plus common interest. TIC is a fractional interest in the whole property with exclusive occupancy rights.
- Governance: Condo has recorded CC&Rs and an HOA. TIC relies on a private TIC Agreement and house rules.
- Financing: Condos fit conventional programs more often. TICs typically need specialty or portfolio loans.
- Down payment and rates: Condos vary by program. TICs commonly require larger down payments and may have higher rates.
- Liability: Condos isolate debt to your unit’s loan. TICs can involve shared liability if there is a master mortgage or cross-default language.
- Insurance: Condos usually have an HOA master policy plus your HO-6. TIC insurance varies by agreement and may be less standardized.
- Taxes: Condos are separately assessed. TICs can be assessed by fractional interest, but structures vary.
- Resale: Condos usually have a wider buyer pool and faster sales. TICs can sell at a discount and take longer.
Financing in San Francisco
Condo financing
You will see more conventional loan options for condos. Some projects qualify for agency programs if they meet project standards. Lenders review HOA budgets, reserves, delinquency rates, litigation, and special assessments, because these can affect loan approval.
TIC financing
Expect a narrower lender list and more stringent terms. Many TIC loans come from portfolio or specialty lenders, with common down payments of 20 to 30 percent or more. Some TICs have a single master mortgage that encumbers the entire property, or cross-default provisions that link owners. Get a TIC-specific pre-approval early, before you write an offer.
Insurance and taxes
Condo insurance and taxes
Most condo HOAs carry a master policy for the building and common areas. You typically add an HO-6 policy for interior coverage and loss assessments. Your unit receives a separate property tax bill and is usually reassessed at purchase under California rules.
TIC insurance and taxes
Coverage depends on the TIC Agreement. Some buildings have a master policy; others rely on owners to carry individual policies for interiors and liability. Property tax assessments for TICs can be set by fractional interest, but structures vary, so confirm details with the assessor’s records.
Marketability and resale in SF
Condos usually attract a broader buyer pool and benefit from more lending options. That often means faster resale and stronger liquidity. A condo’s marketability still hinges on project health, including reserves, delinquency rates, litigation, and assessments.
TICs draw a more specialized set of buyers and lenders. They often sell at a discount compared with similar condos and can take longer to sell. Some TICs later convert to condominiums, which can improve resale prospects, but conversion requires legal steps, owner agreement, and compliance with San Francisco rules.
Local rules that matter
San Francisco’s tenant protections and rent rules can affect occupancy options and value, depending on building age and conversion history. Multi-unit buildings may also face seismic or soft-story retrofit mandates, which can lead to significant capital costs. Converting a TIC to condominiums requires city approvals and may be limited by local laws and tenant protections.
Due diligence checklist
Use this list before you make an offer in San Francisco County.
- Ownership and title: Recorded deed or TIC fractional interest, preliminary title report, and any master mortgage documents.
- Governing documents: For condos, request the Declaration or Plan, CC&Rs, Bylaws, rules, budget, reserve study, meeting minutes, assessment history, litigation disclosures, insurance summary, and an estoppel. For TICs, request the TIC Agreement, occupancy agreements, interest allocation schedule, house rules, budget, minutes, insurance certificates, and any side agreements.
- Financial health: Review the operating budget, dues or cost-sharing schedule, reserve plan or study, delinquency rates, and any special assessments or capital call process.
- Liabilities and litigation: Ask about any pending or threatened litigation, code violations, and open building orders.
- Building condition: Review inspection and engineering reports, seismic or soft-story retrofit requirements, and recent permits.
- Occupancy and tenants: Confirm which units are owner-occupied or tenant-occupied, lease details, and any restrictions on owner occupancy or subletting. For TICs, review occupancy agreements and any tenant rights that affect sales or conversion.
- Insurance: Verify master policy coverage, replacement cost, liability, exclusions, and owner responsibilities for deductibles or loss assessments. For TICs, confirm if there is a master policy and what is left to individual owners.
- Lender constraints: For condos, check whether the project meets agency standards. For TICs, confirm lender requirements, any master mortgage, and whether all co-owners must be borrowers.
- Transfer rules: Look for rights of first refusal, approval procedures, buy-out provisions, and any clauses that make a sale contingent on other owners.
- TIC red flags: Master mortgage with shared liability, no reserves, deferred maintenance, complex or unclear cost allocation, and high rental percentages if owner occupancy is a goal.
- Workflow: Line up a condo and TIC lender pre-approval, order and review title, schedule inspections and engineering reviews for older buildings, and have an experienced attorney or agent review documents.
When a condo may fit you
- You want broad financing choices and potentially lower down payments.
- You prefer standardized governance with a formal HOA and recorded CC&Rs.
- You value a wider buyer pool and more predictable resale.
When a TIC may fit you
- You want a lower price point in a high-cost neighborhood.
- You can meet higher down payment expectations and specialty lending.
- You are comfortable reviewing detailed agreements and sharing certain responsibilities with co-owners.
Red flags to watch for
- Master mortgage or cross-default language that makes you liable for others’ defaults.
- Insufficient insurance or no master policy.
- Significant litigation involving the building or association.
- Large unpaid assessments, weak reserves, or recurring deficits.
- Required retrofit work without a funding plan or looming deadlines.
- Restrictive transfer rules or approvals that complicate resale.
- Lenders unwilling to offer reasonable terms for your profile.
Work with local experts
Choosing between a condo and a TIC in San Francisco County is about balancing cost, risk, and exit strategy. The right team helps you read the fine print and avoid costly surprises. Bring in a lender who knows TICs, a real estate attorney for document review, and an inspector or engineer for older buildings.
If you want a clear path from search to close, with guidance tailored to your goals, connect with Sayage Realty Group. Our family-led team has been by clients’ sides since 1981, helping buyers compare options, negotiate smart terms, and plan for ownership with confidence.
FAQs
Which is easier to finance in San Francisco?
- Condos are generally easier to finance with more loan programs, while TICs usually require specialty or portfolio lenders and larger down payments.
How does resale differ for condos vs TICs?
- Condos typically have a broader buyer pool and faster sales, while TICs often sell at a discount and can take longer to resell.
Are TIC owners liable for other owners’ debts?
- Liability depends on the TIC Agreement and loan structure; master mortgages or cross-default provisions can create shared risk.
Can a TIC convert to a condo in San Francisco?
- Conversion is possible but requires legal steps, owner agreement, and city approvals, and it may be limited by tenant protections and local rules.
How do rent rules affect owners in SF?
- San Francisco’s tenant protections may apply based on building age and history; these rules can affect occupancy choices and rental income potential.
What are the biggest risks when buying a TIC?
- Financing limits, potential shared liability, inadequate insurance or reserves, and a smaller resale market are the most common risks.
