Trying to decide between a TIC and a condo in San Francisco? You are not alone. The two options look similar on the surface, yet they work very differently behind the scenes. When you understand how ownership, financing, and resale differ, you can focus on the properties that fit your goals and timeline. This guide breaks down the essentials, highlights local nuances by neighborhood, and gives you a practical checklist to move forward with confidence. Let’s dive in.
Quick definitions
What is a TIC?
A tenancy in common is a shared ownership structure where you own a percentage of an entire property and have exclusive rights to live in a specific unit. Your rights and responsibilities are set by a recorded TIC Agreement. That agreement covers cost sharing, maintenance, transfer rules, and how disputes or buyouts are handled.
What is a condo?
A condominium creates separate, individually deeded units. You own your unit plus a percentage of the common areas, which are managed by a homeowners association. The legal framework is standardized under California law and local recording requirements, including CC&Rs, bylaws, and a condominium map.
Why structure matters in San Francisco
Condos are broadly understood by lenders, title companies, and buyers. TICs rely on contract terms, which can vary by building. This difference shows up in financing options, insurance, resale, and even day‑to‑day governance. Many older multi‑unit buildings in San Francisco were historically set up as TICs, while newer or converted properties more often use a condo map. You should verify the structure at the building level, since prevalence can vary by block and by era of construction.
Ownership and governance
Title and deeds
- Condo: You receive a separate deed and legal description for your unit.
- TIC: You receive a deed for a fractional interest in the entire property and an exclusive‑use agreement for your unit. The recorded TIC Agreement is central to your rights.
Governance and decision making
- Condo: An HOA, governed by recorded CC&Rs and bylaws, manages the property. California’s Davis‑Stirling Act sets rules for budgets, reserves, meetings, and disclosures.
- TIC: Governance is contractual. The TIC Agreement sets voting rules, cost allocations, and enforcement. The quality of that document and the owners’ cooperation shape your day‑to‑day experience.
Liability and mortgages
- Condo: You typically have an individual mortgage tied to your unit. The HOA handles common area assessments and any building‑level obligations.
- TIC: Financing can be fractional, where each co‑owner has a loan secured by their interest. Some agreements include cross‑default or shared obligations, which can affect everyone if one owner defaults. Reviewing the TIC Agreement and any loan language is essential.
Financing differences in practice
Lender landscape
- Condos: Widely financeable through conventional lenders. Many projects are eligible for conforming loans and, where approved, government programs.
- TICs: A smaller pool of lenders offers TIC loans. Underwriting is often more detailed, and documentation for the TIC Agreement and title is closely reviewed.
Down payments, rates, and timelines
- Condos: Down payments vary by program. Rates and products are widely available, and approvals are usually straightforward when the project meets lender criteria.
- TICs: Lenders often require larger down payments, commonly in the 20 to 35 percent range or higher. Rates and terms may be less favorable, and approvals can take longer due to custom documentation.
Government loans are generally not available for TICs, since those programs require specific project approvals that TICs rarely meet. If you plan to use FHA or VA financing, focus your search on condos.
What to ask lenders early
- Do you regularly finance TICs, and what documents do you require?
- Will you accept the recorded TIC Agreement as structured, including exclusive‑use provisions?
- How do you underwrite assessments and reserves when calculating debt‑to‑income?
- Are conforming or government‑backed options possible for this condo building?
Resale and value dynamics
Buyer pool and marketability
- Condos: Broader buyer pool, including more lenders, more financing programs, and often investors. This typically supports liquidity and marketing.
- TICs: Narrower buyer pool. Some buyers and lenders avoid TICs due to perceived complexity, which can limit demand.
Price patterns
TICs in San Francisco have often been positioned below comparable condos, or they may take longer to sell. The size of any discount varies by neighborhood, building condition, reserves, and market cycle. Do not assume a fixed percentage. For both structures, fundamentals like location, unit condition, and management quality drive value.
Assessments, reserves, and insurance
- Condos: HOAs commonly maintain reserve studies and follow a statutory framework for regular and special assessments. Owners carry an HO‑6 policy for interiors, while the HOA holds a master policy for common areas.
- TICs: Funding practices vary. TIC Agreements can allow special assessments or require contributions for capital projects. Insurance arrangements are not uniform, so you should confirm the master policy and any additional coverage you need.
City‑level requirements, such as seismic or soft‑story retrofits, can create significant building projects. Review how a TIC or HOA handles special assessments and owner obligations for these items.
Conversion potential: TIC to condo
Some TIC buildings can convert to condos. Conversion changes governance, financing eligibility, and individual marketability. The process requires meeting city rules, recorded documents, and sometimes building repairs. It can be multi‑step and is not guaranteed. Conversion may also trigger property tax reassessment or other financial changes, so plan to consult the Assessor’s office and a tax advisor before you rely on a conversion timeline.
Due diligence checklist
Documents to review for a TIC
- Recorded deeds showing fractional interests
- Full recorded TIC Agreement and all amendments
- Exclusive‑use or occupancy agreement for the unit
- Copies of current loans encumbering the property and any required lender consents
- Operating statements, budget, and any reserve policies
- Minutes of owner meetings and notices about upcoming assessments or disputes
- Insurance policies, including the master policy and recommended owner coverage
- Preliminary title report and any exceptions
Documents to review for a condo
- CC&Rs, bylaws, and the recorded condo map
- HOA budget, reserve study, audits, and assessment history
- HOA meeting minutes and any pending litigation
- Master insurance details and HO‑6 recommendations
- Preliminary title report
Building‑level inspections and checks
- Seismic or soft‑story retrofit status and required timelines
- Overall building condition, water and infrastructure, and any pest or termite reports
- Rental and short‑term rental rules under city ordinances and building documents
- Property tax implications and whether a conversion or transfer could trigger reassessment
- Lender prequalification for the property structure before you write an offer
Professionals to engage early
- A mortgage broker or lender who regularly closes TIC loans, if you are considering a TIC
- A real estate attorney with San Francisco TIC and condo experience
- A title company familiar with TIC closings
- A CPA or tax advisor for transfer, conversion, and ownership questions
- A qualified inspector, and a structural engineer when retrofit issues are possible
Neighborhood notes in San Francisco
You will find TICs across many classic San Francisco neighborhoods, especially in older multi‑unit buildings. In areas like parts of Noe Valley, the Mission, the Castro, and the Haight, TICs and condo conversions often sit side by side. In Cow Hollow and Presidio Heights, you may see more condos and single‑family homes in certain pockets, though TICs still appear. Prevalence can change by block and building history, so focus on the specific property rather than broad assumptions.
High‑demand districts support resale for both structures, yet financing friction for TICs can still narrow the buyer pool. A well‑managed building with clear documents and appropriate reserves helps marketability regardless of structure.
Which path fits your goals?
Consider a TIC if you want
- A potential entry price advantage relative to similar condos
- A smaller building feel and the ability to shape rules through a bespoke agreement
- To work with a specialized lender and you have a larger down payment ready
Consider a condo if you want
- Broad financing options, including possible eligibility for conforming, FHA, or VA where approved
- Standardized governance through an HOA with budgets, reserves, and disclosures
- A wider buyer pool and straightforward resale dynamics
Smart next steps
- Get preapproved with a lender that regularly finances the structure you are targeting, especially for TICs.
- Request and review the recorded TIC Agreement or condo CC&Rs before you write an offer.
- Ask for budgets, minutes, reserve studies, insurance policies, and any building loan documents.
- Include contingencies to allow for document review and inspections.
- Line up your advisory team early so you can move decisively when the right property appears.
When you are ready to compare specific buildings or documents side by side, we can help you evaluate the fine print and position your offer with confidence. For discreet guidance tailored to San Francisco neighborhoods like Noe Valley, Cow Hollow, and Presidio Heights, connect with our team. Wynne + Morgensen | Request a Private Consultation.
FAQs
Can I use FHA or VA financing for a San Francisco TIC?
- Generally no. FHA and VA loans require specific project approval, which TICs rarely meet. If you need these programs, focus on condos.
How do TIC and condo ownership differ on title and deeds?
- A condo gives you a separate deed for your unit. A TIC gives you a fractional interest in the entire property plus an exclusive‑use agreement for your unit.
Are TICs always cheaper than condos in San Francisco?
- Not always. TICs often face a narrower buyer pool and tougher financing, which can influence pricing, but any discount varies by building and market cycle.
Who pays for major repairs in a TIC building?
- The recorded TIC Agreement controls cost sharing. Many agreements allocate expenses by percentage interest and allow special assessments with defined voting rules.
Can a TIC building convert to condos in San Francisco?
- Sometimes. Conversion is possible if legal and municipal requirements are met. The process can be complex and may trigger tax reassessment.
What insurance should I expect with a TIC vs a condo?
- Condos usually have a master policy plus an HO‑6 for interiors. TIC insurance varies by agreement, so confirm the master policy and any unit‑level coverage you need.