Torn between buying a TIC or a condo in San Francisco? You are not alone. In neighborhoods like Bernal Heights and Noe Valley, you will find both options on the same block, often at similar sizes and price points but with very different rules and financing paths. This guide breaks down what you need to know so you can compare costs, risks, and long‑term value with confidence. Let’s dive in.
TIC vs. condo in SF: the basics
A tenancy‑in‑common (TIC) is a co‑ownership structure where you own a fractional interest in the entire property, and the TIC agreement assigns you the right to occupy a specific unit. A condominium (condo) is deeded unit ownership plus a share of common areas, managed through a homeowners association (HOA).
Here is a simple side‑by‑side to ground your search:
| Topic | Condo | TIC |
|---|---|---|
| Ownership & deed | Separate deeded unit plus share of common elements | Undivided fractional deed to the whole property with exclusive use of a specific unit per the TIC agreement |
| Governance | HOA with bylaws, budgets, and reserves | TIC agreement governs rights, expenses, voting, and transfers; formality varies |
| Mortgages | Conventional options often available if the project is “warrantable” | Fewer lenders, often higher down payments and tighter underwriting |
| Shared risk | Owners pay their own loans and HOA dues | Obligations can be interconnected, especially if a master loan exists |
| Resale | Larger buyer pool and typically easier to finance | Smaller buyer pool, more due diligence, sometimes longer time to sell |
| Core documents | CC&Rs, bylaws, budget, reserve study, insurance | TIC agreement, financials, insurance, estoppels, any master mortgage info |
If you prefer structure and simpler financing, a condo may feel more straightforward. If you value price efficiency and can handle extra diligence, a TIC can be a smart play in select buildings.
Financing differences to expect
Financing often drives the decision in San Francisco. The availability of lenders, down payment requirements, and underwriting timelines vary by ownership type.
Condos: warrantability matters
Condo loans are widely available through conventional programs, but most lenders need to confirm the project’s eligibility. You or your lender should verify the project’s status using guidance like the Fannie Mae condo project eligibility standards. If the building is non‑warrantable, options narrow and rates or down payments may change.
TICs: a smaller lender pool
TIC loans are offered by a smaller set of banks and portfolio lenders. You may see higher down payment requirements and different reserve expectations compared to condos. Underwriting can take longer because lenders often want the full TIC agreement, building insurance, and estoppels from co‑owners.
Smart questions to ask any lender
- Have you closed TIC loans in San Francisco in the last 12 months? What down payment and rate ranges are typical right now?
- Do you require all co‑owners to be on the loan, or can you underwrite a single owner’s TIC interest?
- What documents do you need from the HOA or TIC entity, and how long does your project or agreement review take?
- For condos, can you confirm the project’s warrantability early in the process?
For plain‑English mortgage guidance and co‑borrower considerations, review the Consumer Financial Protection Bureau’s mortgage resources.
Appraisals and comparables
Appraisal can be more nuanced for TICs because there are fewer direct comps in some micro‑markets. This can affect loan‑to‑value and timing. For condos, project issues can still slow underwriting if financials or insurance do not meet standards.
Due diligence checklist for buyers
Whether you lean TIC or condo, a careful document review protects your investment. Build in time for lender and legal review before you remove contingencies.
Core documents to collect
- Full recorded deed showing the interest being sold.
- The entire TIC agreement or, for condos, the CC&Rs, bylaws, budget, and reserve study.
- Copies of all mortgages affecting the property, including any master mortgage for TICs.
- Estoppel letters and payoff information for any master loan.
- Current financials: operating statements, assessment history, and reserve balances.
- Insurance declarations for the building. In San Francisco, look closely at earthquake coverage options.
- A preliminary title report showing any liens, easements, or judgments.
- Inspection reports, including general, pest, and foundation. For older buildings, request seismic and soft‑story evaluations.
- City records for retrofit compliance, permits, or violations through the San Francisco Department of Building Inspection.
- Any condo conversion language or restrictions in the TIC agreement.
- Right‑of‑first‑refusal and transfer procedures that could affect timeline.
- Tenant occupancy and rent control considerations, if applicable.
To confirm land use or future conversion pathways, consult the San Francisco Planning Department. For recorded deeds and parcel documents, check the San Francisco Assessor‑Recorder.
Red flags to investigate
- No written TIC agreement, incomplete HOA records, or weak reserves.
- A master mortgage showing signs of distress.
- Pending litigation affecting title or occupancy rights.
- Unresolved DBI violations or incomplete seismic retrofits.
- High turnover or frequent co‑owner disputes.
Resale, marketability, and value
Liquidity often favors condos because more buyers and lenders participate. TICs can trade at a discount relative to comparable condos since buyers price in financing and governance complexity. There is no universal rule on appreciation, so use recent local sales for your ownership type when you set expectations.
TIC transactions sometimes take longer due to agreement reviews and lender availability. Condo sales can also stall if a project is non‑warrantable or under‑insured. Ask for a realistic timeline up front and build in time for document review.
About condo conversion
Some TIC owners pursue conversion to condominiums to enhance marketability. Conversion requires owner approvals and city authorization, and it can take time and budget. Feasibility depends on the TIC agreement and current city policies, which you can explore through the San Francisco Planning Department.
When a TIC might be a smart buy
A TIC can make sense if you:
- See a meaningful price advantage versus comparable condos in the same area.
- Plan to live in the home for several years and can be flexible at resale.
- Are comfortable with a detailed TIC agreement and the responsibilities it sets out.
- Have a lender with recent San Francisco TIC closings.
- Value small‑building living, where direct coordination on maintenance can be a plus.
If sustainability and cost‑of‑ownership matter to you, consider TICs or condos that already have seismic retrofits, efficient heating and hot water, and good insulation. These upgrades can reduce long‑term operating costs and support future resale. Verify retrofit status and permits with the Department of Building Inspection.
Practical next steps
- Talk to a lender who has closed San Francisco TIC loans in the past year and can pre‑review a condo project for warrantability.
- Hire a real estate attorney experienced with TIC agreements and local conversion rules.
- Engage a title company familiar with TIC title issues.
- Order inspections early, including structural and seismic where relevant.
- Review city records. Start with the Department of Building Inspection and Assessor‑Recorder for permits, violations, and recorded documents.
- Keep your timeline realistic. Build in time for lender, legal, and city‑record checks before removing contingencies.
Buying in Bernal Heights, Noe Valley, or nearby neighborhoods gives you great options in both categories. With the right team and a clear plan, you can choose the structure that matches your risk tolerance, budget, and long‑term goals.
If you want a calm, experienced guide for a TIC or condo search in San Francisco, reach out to Lucinda Otto. You will get attentive, sustainability‑savvy representation and hands‑on help coordinating inspections, lenders, and documents.
FAQs
Is a TIC legal and common in San Francisco?
- Yes. TIC ownership is legal and remains common in many older multi‑unit buildings. It differs from condos in financing, governance, and resale dynamics.
What is the main financing difference between TICs and condos?
- Condos typically have broader access to conventional financing if the project is warrantable. TICs rely on a smaller lender pool that often requires higher down payments and stricter terms.
Can a TIC building convert to condos in San Francisco?
- Yes, but it requires owner approvals, legal work, and city authorization. Review your TIC agreement and consult the San Francisco Planning Department for current policies.
What are the top risks of buying a TIC?
- Shared financial exposure, limited lender options, potential resale delays, and building compliance costs, such as seismic retrofits.
Do TIC owners pay something like HOA dues?
- Often yes. TIC agreements usually provide for shared assessments that cover maintenance, insurance, and reserves, similar in spirit to HOA dues.
What documents should I review before buying a TIC?
- The full TIC agreement, any master mortgage details, insurance, financials, title report, inspections, and city records for permits and seismic compliance.
