TIC vs Condo in San Francisco: What Buyers Should Know

Trying to decide between a TIC and a condo in San Francisco? You’re not alone. The choice affects your financing, day-to-day ownership, and future resale. The good news is you can make a smart call once you understand how each one works here in the city. In this guide, you’ll learn the key differences, what lenders look for, what to review before you buy, and who each option fits best. Let’s dive in.

Quick definitions

What is a TIC

A Tenancy in Common is shared ownership of a single property where each owner holds an undivided fractional interest, like 25 percent of a four-unit building. Your rights come from the recorded deeds and a private TIC Agreement that lays out who occupies which space, how costs are split, and rules for transfers. Because TICs are governed by contracts and general property law, details vary from building to building.

What is a condo

A condominium is fee simple ownership of a specific unit plus a shared interest in the common areas. Condos are governed by California’s Davis-Stirling Common Interest Development Act, which sets standards for HOAs, budgets, reserves, disclosures, and owner protections. Each condo unit has its own deed, and the HOA enforces the rules through recorded CC&Rs.

Why this matters

Condos follow a standardized legal framework that offers predictable disclosures and remedies. TICs run on private agreements that can differ widely. Lenders and insurers treat them differently, which impacts your loan options, rates, and coverage. That is why careful review of documents is essential with a TIC.

Financing and title differences

Condo financing at a glance

Condos typically qualify for a broad range of loans when the project meets eligibility rules. Conventional financing can allow lower down payments for some buyers, and FHA or VA loans may be available if the condominium project is approved. Lenders also look at the building’s financial health, reserves, and legal status before approving a unit.

TIC financing realities

TIC loans are more specialized. Fewer lenders offer them, and terms often require higher down payments and may come with higher rates or fees. Some lenders use a single loan that covers the whole property with all owners on the note. Others offer individual TIC loans with terms that address cross-defaults and foreclosure risks. Many TIC loans are portfolio products that stay on a lender’s balance sheet, which limits standardization.

Title and insurance considerations

Title insurance for fractional TIC interests can be complex and may need special endorsements. For condos, title is unit-specific and title policies are more routine. On insurance, condo HOAs usually carry a master policy while unit owners buy HO-6 coverage for interiors and personal property. TIC insurance structures vary by agreement, so confirm who carries what coverage and whether lender-required endorsements are in place.

What to do before you apply

• Speak with a lender who regularly finances San Francisco TICs. A standard preapproval may not apply to a TIC.
• Request a preliminary title commitment early and have a title company familiar with TICs review liens, mortgages, and recorded agreements.
• Verify whether there is one mortgage on the building or separate loans, and understand any cross-default language.
• Confirm the insurance requirements with the TIC group or HOA and your lender before you remove contingencies.

Owning day to day

Governance and rules

Condo owners follow Davis-Stirling rules through the HOA, which requires budgets, meetings, records access, and formal procedures. TIC owners follow the private TIC Agreement. That agreement sets house rules, voting, transfers, and dispute resolution, so clarity and enforceability matter.

Assessments and reserves

Condo budgets and reserve planning follow statutory standards and disclosure rules. TIC budgets are contractual and can be less standardized. In both cases, you will pay periodic dues that cover shared expenses. Review how reserves are funded and whether special assessments are coming.

Insurance and responsibilities

Condo HOAs typically hold a master policy. Owners carry HO-6 policies for interiors and personal property. In a TIC, the agreement may require a master policy or divide responsibilities among owners. Your lender may require specific endorsements. Ask for proof of coverage and policy terms before you commit.

Due diligence checklists

If you are buying a TIC

• Recorded deeds showing each owner’s fractional interest and vesting.
• Full TIC Agreement and any Occupancy or Management Agreements.
• Operating budget, bank statements, and reserve balances.
• Meeting minutes for 12 to 36 months and assessment history.
• Current mortgage details on the property and payment status.
• Any pending litigation or claims.
• House rules, subletting provisions, transfer rules, and approval steps for new owners.
• Title commitments and any easements or restrictions.
• Structural, pest, and hazard reports, including seismic considerations.
• Responsibility for capital improvements and any known special assessments.

If you are buying a condo

• CC&Rs, bylaws, rules, and all amendments.
• HOA budget, bank statements, and reserve study or reserve documentation.
• Board meeting minutes for 12 to 36 months and disclosure of any litigation.
• Project eligibility details relevant to FHA or VA if needed.
• Insurance summary for the master policy and owner responsibilities.
• Management contracts and major service agreements.

Resale and marketability in San Francisco

Condos generally appeal to a wider buyer pool and offer easier financing. That usually translates into stronger liquidity and a smoother sale process when the building is in good standing. TICs tend to attract buyers who understand the structure and can meet financing needs. Sales can take longer and may trade at a discount compared to similar condos due to financing friction and buyer familiarity. A realistic resale plan for a TIC includes extra time, clear disclosures, and pricing that reflects the structure and any conversion prospects.

Who each option fits

Choose a condo if

• You want broad mortgage options, including potential FHA or VA when the project is approved.
• You value standardized governance, disclosures, and statutory protections.
• You prioritize easier resale and a wider buyer pool.

Consider a TIC if

• You are seeking a lower entry price in a target neighborhood and can meet higher down payment expectations.
• You plan to stay long term and are comfortable with detailed contract review and shared decision-making.
• You see a plausible path to condo conversion and can analyze costs and requirements.

Tradeoffs in one glance

• Affordability vs. friction: TICs may list lower but require specialized financing and deeper diligence. Condos are usually simpler to finance.
• Control vs. standardization: TIC Agreements can be tailored but vary widely. Condos follow consistent statutory rules.
• Liquidity and exit: Condos are typically easier to sell. TICs may need more time and strategy.

TIC-to-condo conversion in SF

Converting a TIC to a condo can open more financing options and broaden marketability. It involves creating a subdivision map, drafting CC&Rs, and securing approvals. Owners must coordinate legal, engineering, title, and insurance steps. Local planning, building code, and tenant protection rules can add complexity and costs. Owner consent rules and relocation requirements may apply depending on occupancy and tenancy. If conversion potential is important to your decision, model the timeline, costs, and likelihood before you buy.

Next steps for SF buyers

If you are exploring a TIC

• Gather all recorded documents and have a real estate attorney and title company review them early.
• Prequalify with a lender who actively underwrites San Francisco TIC loans and ask about down payment and rate ranges.
• Request recent financials and minutes. Hire an inspector or engineer to evaluate deferred maintenance and seismic needs.

If you are exploring a condo

• If you need low down payment options, confirm whether the project is eligible for FHA or VA.
• Review budgets, reserves, and any planned special assessments or litigation.
• Verify master policy coverage and what your HO-6 needs to include.

Work with a local guide

Buying in San Francisco is nuanced, especially when you compare TICs and condos. You deserve a clear plan, a lender fit for your property type, and tight document review before you commit. If you want a hands-on partner who understands both structures and can guide you from financing to inspections to closing, connect with Michael Soon. Schedule a free neighborhood consultation.

FAQs

What is the main difference between a TIC and a condo in SF

• A condo is separate unit ownership governed by an HOA and state law, while a TIC is fractional ownership of one property governed by a private agreement that varies by building.

Can I use FHA or VA financing to buy a TIC in San Francisco

• It is rare because these programs usually require approved condominium projects; TIC loans are typically specialty portfolio products with higher down payments.

How do monthly dues work for TICs compared to condos

• Both fund shared costs, but condo dues follow HOA budgets under state rules while TIC payments follow the private TIC Agreement’s budget and allocation formulas.

Are TICs subject to San Francisco rent control

• Rent control depends on local law and tenancy history, not ownership type; a TIC can include owner-occupied and rental units depending on the building and leases.

What insurance do I need for a TIC vs a condo

• Condos usually have an HOA master policy and you add an HO-6; TIC insurance depends on the agreement and lender requirements, so confirm master coverage and any needed endorsements.

Do TICs resell for less than similar condos in SF

• TICs often appeal to a narrower buyer pool and can take longer to sell, which may result in lower prices compared to similar condos due to financing and familiarity factors.