TIC vs Condo in San Francisco: A Clear Guide for Buyers

Thinking about buying in San Francisco and torn between a TIC and a condo? You are not alone. The ownership structure you choose can affect your loan options, monthly costs, risk, and how easy it will be to resell later. In this guide, you will learn the plain facts about TICs and condos in San Francisco, how financing and governance differ, what to check during due diligence, and who each option tends to fit. Let’s dive in.

Quick definitions: TIC vs. condo

A Tenancy‑in‑Common (TIC) gives you an undivided fractional interest in the entire building, paired with an agreement that assigns you the right to live in a specific unit. You do not own a separate, individually mapped parcel. Your rights and obligations are set by a written TIC Agreement that covers occupancy, expenses, repairs, and how sales or buyouts work. TICs are not governed by California’s Davis‑Stirling Act.

A condominium gives you fee simple ownership of a defined unit plus a fractional interest in the shared areas. Each condo unit is a separate legal parcel recorded with the County. Condos operate under the Davis‑Stirling Act and the community’s CC&Rs, bylaws, and rules. A homeowners association manages budgets, reserves, and assessments, and must provide statutory disclosures to buyers.

Why TICs are common in San Francisco

San Francisco has many older multi‑unit buildings that were organized as TICs rather than converted to condos. Local rules, tenant protections, and the cost and complexity of conversion have shaped this pattern. Converting a TIC building to condos typically requires mapping, city compliance, and other legal steps, which may be time‑consuming or not feasible in some cases. As a result, TICs remain a real segment of the market with their own pricing and financing dynamics.

Financing differences that affect your budget

Lenders are generally more comfortable with condominiums because each unit is a standard, separately deeded parcel. Mortgage guidelines for condos are well established. TICs require shared‑title underwriting, so many mainstream lenders limit or avoid them. You will find a smaller pool of specialized or local lenders who regularly close TIC loans in San Francisco.

With a TIC, expect tighter loan terms. Down payments often range from about 20% to 35%, depending on the lender and your profile. Interest rates can be higher and loan programs fewer. Government‑backed options like FHA and VA are more limited for TICs, and conventional agency delivery may be restricted. Always secure a pre‑approval from a lender that regularly underwrites TICs before you write an offer.

Financing also affects your exit. Because future buyers of your TIC share must find a TIC‑friendly lender or pay cash, refinancing and resale can be more complex. Condos, by contrast, usually align with widely available loan products, which supports a broader buyer pool.

Ownership, governance, and insurance

Condos benefit from standardized governance under the Davis‑Stirling Act. The HOA must manage budgets, set reserves, levy assessments, and provide disclosures when a unit sells. You will review CC&Rs, bylaws, rules, budgets, reserves, and meeting minutes as part of due diligence.

TICs are governed by private contract. Your protections and obligations flow from the TIC Agreement, not a statutory HOA framework. Pay close attention to expense allocation, maintenance standards, dispute resolution, and any transfer restrictions or rights of first refusal.

Insurance varies too. Condo owners typically carry HO‑6 policies for interior coverage and personal liability, while the HOA handles the master policy. TICs rely on building insurance coordinated by the co‑owners, and your personal policy must align with that master coverage. Confirm who pays premiums and deductibles and how claims are handled.

Resale, liquidity, and exit planning

Condos usually have stronger liquidity because the title is familiar and financing is broadly available. They tend to attract a wider buyer pool, including buyers using conforming, FHA, or VA loans, and may sell faster in many cycles. TICs can trade at a discount compared to similar condos, reflecting financing friction and perceived exit risk. Marketing time can be longer when buyer demand or lending conditions tighten.

If you buy a TIC, plan your exit early. Options include selling your fractional interest to another TIC buyer, buying out other owners to control the building, or pursuing condo conversion if feasible under local rules and your TIC Agreement. Conversion often requires surveying, mapping, city approvals, and owner consent, and the costs can be significant. Court remedies like partition are considered last‑resort and can be costly and unpredictable.

Due diligence checklist for SF buyers

Use this checklist to protect your interests before you commit:

• Recorded documents: Obtain the TIC Agreement or Declaration, deeds, any rights of first refusal, and recorded easements for parking or utilities.
• Financials: Review the building budget, reserve funds, and a history of assessments and owner payment status.
• Legal issues: Check for pending litigation, city code violations, open permits, or building violations.
• Insurance: Confirm the master policy, endorsements, deductibles, and what coverage each owner must carry.
• Title: Review a preliminary title report for liens, encumbrances, or restrictions that affect all owners.
• Occupancy: Confirm owner‑occupancy rates and whether any units are tenant‑occupied, since tenant status can affect conversion feasibility.
• Conversion history: Ask whether anyone explored condo conversion before, what they learned, and why any effort did or did not proceed.
• Lender pre‑approval: Get pre‑approved with a lender that handles TICs, including down payment, rate, and required documents.
• Professional team: Engage a real estate attorney experienced with TICs, a TIC‑capable lender, a title officer familiar with local TIC closings, and inspectors or contractors for building condition.
• Taxes and assessments: Verify property tax status and any special assessments tied to the building.

Who each option tends to fit

Condos often fit buyers who want standard financing, defined HOA governance, and simpler resale. They can work well for move‑up buyers and investors who value predictable exit options and broad buyer demand.

TICs may fit buyers targeting a lower entry price or a specific neighborhood where condo options are limited. They also fit buyers comfortable with a more complex legal structure who can make a larger down payment or use a lender that regularly closes TIC loans. Some buyers pursue TICs with a long‑term plan to buy out co‑owners or explore conversion, if feasible.

If you are a first‑time buyer, a TIC can look attractive on price. Balance that with the realities of higher down payments, fewer loan choices, and a narrower resale pool. Condos are often a simpler path if you rely on typical loan products.

Decision guide: How to choose

Follow these steps to make a confident choice:

1. Clarify your financing. Get pre‑approved for both a condo and a TIC scenario to compare down payment, interest rate, monthly payment, and closing costs.

2. Review the documents. Read the HOA documents for condos and the TIC Agreement for TICs. Focus on reserves, upcoming repairs, assessment history, and any transfer restrictions.

3. Stress test your exit. Estimate how long you might own, how easy it will be to refinance, and how you would sell in different market conditions. If you are considering conversion, check feasibility, timing, and costs.

4. Assess your risk tolerance. With a TIC you share title, costs, and some risks with co‑owners. With a condo, the HOA is your governance structure. Choose the model that matches your comfort level.

5. Value the location and building. Weigh building condition, maintenance plans, and neighborhood supply. TICs exist across many SF neighborhoods, so compare real options side by side.

6. Work with local experts. Use a San Francisco agent who knows TIC and condo nuances, a TIC‑capable lender, and a title team that has closed TICs. Experience can save you time and money.

Common scenarios in San Francisco

• Entry buyer comparing price: You find a TIC that is priced below similar condos. Your lender requires 25% down for the TIC but only 10% for a condo. If liquidity and flexibility are priorities, the condo may pencil out better despite the higher list price.

• Buyer targeting a specific block: There is no condo inventory where you want to live, but a well‑run TIC building is available. If the TIC Agreement is strong, reserves are healthy, and you can meet the down payment, the TIC could be a practical path into that location.

• Long‑term owner with conversion goal: You plan to own for many years and may buy out other owners. If your TIC Agreement outlines a fair buyout process and conversion appears feasible, a TIC can be the first step toward your future plan. Build a timeline and budget for legal and mapping costs.

Work with a local advisor

San Francisco’s TIC and condo landscapes change with lending guidelines and city rules. You deserve clear guidance, not guesswork. If you want help comparing real options, reviewing documents, and building a plan that fits your budget and exit goals, connect with a local expert who manages these tradeoffs every day. To explore properties and align on a strategy that fits your timeline, reach out to Nick Villanueva.

FAQs

What is a TIC in San Francisco housing?

• A TIC is shared ownership of the whole building with a contract that assigns you occupancy of a specific unit, rather than a separately deeded condo unit.

How does condo ownership differ from TIC ownership?

• A condo is a separate legal parcel with HOA governance under the Davis‑Stirling Act, while a TIC relies on a private TIC Agreement among co‑owners.

What are typical TIC loan requirements in SF?

• Many TIC lenders require larger down payments, often 20% to 35%, with fewer loan programs and sometimes higher rates than comparable condo loans.

Are FHA or VA loans common for TIC purchases?

• FHA and VA options for TICs are more limited, so you should check current program rules with a lender that regularly underwrites TIC loans.

Is it harder to resell a TIC than a condo in SF?

• Often yes, because TICs have a narrower buyer pool and fewer financing options, which can affect price and time on market.

What documents should I review before buying a TIC?

• Review the recorded TIC Agreement, building financials and reserves, insurance, title report, code compliance, and any transfer restrictions or rights of first refusal.

Can I convert a TIC to a condo in San Francisco?

• Sometimes, but feasibility depends on city rules, mapping, tenant status, costs, and owner consent as outlined in the TIC Agreement.