Trying to choose between a TIC and a condo in Hayes Valley? You are not alone. In a neighborhood where inventory moves quickly, the way a home is owned can matter as much as its floor plan. This guide breaks down how each option works, what it means for financing and resale, and how to decide which structure fits your lifestyle. Let’s dive in.
Quick definitions: TIC vs condo
What is a condo?
A condominium is a separately deeded unit in a multi-unit property. You own your unit and share the common areas through a homeowners association, often called an HOA. The HOA enforces CC&Rs, bylaws, and rules, and collects monthly assessments to fund operations and reserves. Because each unit is its own legal parcel, condos are widely recognized by lenders and are eligible for more loan programs when the project qualifies.
What is a TIC?
A tenancy in common, or TIC, is shared ownership of the entire property. You hold an undivided fractional interest plus an exclusive right to occupy a specific unit, which is spelled out in a recorded TIC agreement. Governance lives in that agreement and related documents, not in condominium law. In San Francisco, many older multi-unit buildings were set up as TICs, especially before condo conversions became common.
How ownership affects your experience
Title and transfer are simpler with condos because each unit has its own deed. That clarity can make financing and future resale more straightforward. With TICs, your title is a fractional interest in the whole property. That structure can complicate lien priority, refinancing, and transfer mechanics.
Both condos and TICs regulate how owners use the property and share costs. Condos rely on HOA documents and state law. TICs rely on the recorded TIC agreement, which can be very specific about rights, costs, and remedies if an owner defaults.
Financing: what to expect
Condos: wider loan options
Condo financing is broadly available. When the condominium project meets lender and government program requirements, buyers can access conventional, jumbo, and sometimes FHA and VA loans. Appraisals typically use a wide set of condo comparables, which can support more predictable loan-to-value outcomes.
TIC loans: specialized and case-by-case
TIC financing is more specialized. Fewer lenders offer TIC loans, and requirements can be stricter on credit, debt-to-income, and documentation. Many TIC loans expect larger down payments than comparable condos, often in the 20 to 30 percent range, but exact thresholds vary by lender and market conditions. Some TICs use individual financing per owner, while others are tied to a master loan or require co-owner participation. These features affect affordability and your options to refinance later.
Appraisals for TIC interests may rely on a narrower set of comparable sales. That can influence loan sizing. Because of these factors, early conversations with lenders who regularly underwrite TICs in San Francisco can save you time and help you write a stronger offer.
Practical financing steps
- Get pre-approved for both structures if you are open to either, so you know your true budget range.
- Ask lenders about down payment ranges, reserve requirements, and whether individual or master loans apply.
- Confirm whether government-backed financing applies to the specific condo project you are considering.
- Budget extra time for TIC loan underwriting and documentation.
Resale and pricing in Hayes Valley
Buyer pool and time on market
Hayes Valley is central, walkable, and competitive. Properties that are easy to finance typically attract more buyers and can move quickly. Condos usually draw a broader audience, including buyers using conventional loans and, when eligible, government-backed programs. TICs tend to attract a smaller pool of informed buyers, often with larger down payments or cash, which can lengthen time on market.
Pricing patterns and conversion
Historically in San Francisco, TICs sometimes sell at a discount to comparable condos because of financing limits and transfer complexity. The actual difference varies by building, unit condition, and location. Some TIC buildings later convert to condominiums, which can open the door to broader financing and potentially increase value. Conversion is not guaranteed and can involve cost, time, and regulatory steps, so it should not be assumed in your purchase decision.
Governance and daily life
Decision-making and rules
Condos are run by HOAs with formal meetings, budgets, voting procedures, and compliance under California HOA law. TICs are governed by the recorded TIC agreement. That agreement may require consensus or supermajorities for major actions and can set detailed rules for improvements, subletting, and sales. The practical takeaway is simple: read the documents, and understand how decisions get made.
Monthly costs and reserves
Condos charge monthly HOA dues and may levy special assessments. Lenders and buyers often review HOA reserves and financials. TICs also collect monthly payments, which can include shared costs like insurance, utilities, and maintenance. Some TICs have strong reserve planning, while others operate lean. Ask for current budgets, reserve details, and historic payment records.
Renting and short-term use
Both structures can restrict rentals. Condos use HOA rules. TICs rely on the TIC agreement. Local San Francisco rules for rentals and short-term stays also apply. If you plan to rent at any point, verify both the ownership documents and city regulations before you write an offer.
Conflicts and liability
Many TIC agreements include buy-sell provisions, rights of first refusal, and remedies for defaults. Depending on how debt is structured, one owner’s default can affect other owners. Review these sections closely with your advisor so you understand your exposure and your options if another owner stops paying.
Which fits your lifestyle?
A TIC may fit if you
- Want a lower entry price in a high-demand location and can bring a larger down payment or cash.
- Plan to stay long term and are comfortable with a partnership-style structure.
- Value flexibility to shape rules among a small group of owners and are willing to engage in governance.
A condo may fit if you
- Want broader financing choices, simpler resale, and a larger buyer pool down the road.
- Prefer standardized HOA governance and established reserve practices.
- Need faster timelines, more predictable underwriting, and easier transfer logistics.
Due diligence checklist
Build your team early
- An experienced San Francisco agent who understands TIC and condo mechanics in Hayes Valley.
- Lenders who actively make TIC loans and conventional condo loans.
- A title/escrow officer familiar with recorded TIC interests and insurance.
- A real estate attorney for TIC agreement review and any unusual title provisions.
- Inspectors and, for older buildings, professionals who can evaluate seismic and structural items.
- A tax adviser for property tax and transfer questions.
Documents to review
- For condos: CC&Rs, bylaws, meeting minutes, current budget, reserve study, insurance certificates, assessment history, and any project eligibility details relevant to financing.
- For TICs: the recorded TIC agreement and exhibits, title reports showing fractional interests and liens, operating budgets, owner meeting records, historical payment history, rules for transfers and subletting, mortgage structure, and any conversion applications on file.
- For the building: property condition reports, permit history, and any seismic or pest reports that speak to long-term maintenance.
Red flags to watch
- TICs: vague or restrictive buy-sell clauses, thin reserves, missing financials, exposure to a master loan you do not control, litigation among owners, or unclear title splits.
- Condos: low reserves relative to upcoming capital needs, pending special assessments, litigation against the HOA, or rules that conflict with your plans for occupancy or renting.
Hayes Valley specifics
Inventory can be tight, and well-priced condos that are easy to finance often move fast. TICs may present price opportunities but require more diligence on financing and governance. Earthquake insurance and retrofit status can affect cost and peace of mind, so ask about coverage options and building condition when you review disclosures.
Next steps
Your choice between a TIC and a condo shapes how you finance, how you live day to day, and how you resell. If you are weighing options in Hayes Valley, a focused plan with property-specific guidance will help you move with confidence and speed. For a tailored conversation and a clear path from search to closing, connect with Paige Gienger.
FAQs
What is the main difference between a TIC and a condo in San Francisco?
- A condo is a separately deeded unit with an HOA, while a TIC is fractional ownership of the entire property with an exclusive right to occupy a unit governed by a TIC agreement.
Can I use FHA or VA financing for a TIC purchase in Hayes Valley?
- Most TICs are not eligible for FHA or VA; these programs typically apply to approved condo projects, so verify eligibility with your lender early.
Do TICs usually require larger down payments than condos?
- Many TIC lenders expect larger down payments than comparable condos, but exact requirements vary by lender, loan program, and market conditions.
Do TICs sell for less than comparable condos in central San Francisco?
- TICs have historically sold at a discount to similar condos due to financing and transfer complexity, though the amount varies by building, condition, and location.
Who makes decisions in a TIC versus a condo building?
- Condos use an HOA under CC&Rs and California law; TICs follow the recorded TIC agreement, which sets voting, approvals, and owner obligations.
What documents should I review before buying a TIC in Hayes Valley?
- Review the recorded TIC agreement and exhibits, title reports, budgets, meeting records, mortgage structure, payment history, and any conversion or building-level reports.
