Trying to choose between a condo, a TIC, or a co-op in San Francisco? You are not alone. Each path to ownership works differently, affects your financing options, and shapes your long-term flexibility when you sell or rent. This guide breaks down how each type works in SF, what it means for approvals and costs, and the due diligence you should complete before making an offer. Let’s dive in.
What each option means in SF
Condominiums at a glance
A condominium is a legal subdivision of a building. You own your unit as a separate real property parcel and share common areas through an owners association. In California, condos are governed by the Davis-Stirling Common Interest Development Act, which sets out rules for budgets, disclosures, and owner protections.
TICs at a glance
A tenancy-in-common, or TIC, gives you a fractional, undivided interest in the whole property rather than a separate parcel. Your rights to a specific unit come from a private TIC agreement among owners. San Francisco has a long history with TICs because they offered a lower-cost way to divide buildings, especially before tighter condo conversion rules.
Co-ops at a glance
In a cooperative, a corporation owns the building. You buy shares in the corporation and receive a proprietary lease for your unit. Co-ops are less common in San Francisco than condos or TICs, and they often appear in older boutique buildings.
How ownership affects control and risk
- Title structure: Condo equals individual parcel. TIC equals shared title interests governed by a contract. Co-op equals corporate shares with a proprietary lease.
- Decision making: Co-op boards often exercise broad approval power. Condo HOAs follow statutory processes. TIC agreements vary widely and control how decisions and costs are shared.
- Market reach: Condos are most familiar to buyers and lenders, which typically means the broadest buyer pool. TICs and co-ops are more niche, which can affect liquidity when you resell.
Financing in San Francisco: what to expect
Condos
Condos generally qualify for mainstream financing. Conventional mortgages, and in some cases FHA or VA loans, are possible if the project meets program rules. Lenders review the building’s budget, reserves, owner occupancy, and any litigation. Some projects require higher down payments if they do not meet program standards.
TICs
TIC financing is available from select lenders but has stricter underwriting. Expect higher minimum down payments and potentially higher rates compared to condos. Lenders will want to see a clear TIC agreement, sound insurance, and how reserves and assessments are handled. TICs that convert to condos are far easier to finance.
Co-ops
Co-op buyers typically obtain a share loan tied to their proprietary lease. Lenders scrutinize the co-op’s financials, reserves, corporate debt, owner occupancy, sublet rules, and any litigation. Down payment expectations are often higher than a standard condo loan.
Program eligibility and project approvals
- FHA and VA: Many condo projects need to be on approved lists to qualify, and not all are. TICs typically do not fit these programs unless converted. Co-op eligibility exists in limited cases.
- Conventional conforming: Fannie Mae and Freddie Mac have project rules for condos. Factors like owner occupancy, single-entity ownership, commercial space, and pending litigation can affect eligibility.
Taxes, transfer, and insurance basics
Property taxes and transfer taxes
In California, a change of ownership typically triggers a reassessment under Proposition 13. San Francisco also levies a documentary transfer tax on property transfers, and the amount depends on the sale price and deal structure. Co-op share transfers can have different mechanics than fee title transfers, so you should confirm details with your escrow and advisor before you commit.
Insurance requirements
- Condos: The association usually carries a master policy. Your lender will likely require an HO-6 policy for interior items, personal property, and liability. Deductibles and coverage scope affect your exposure to special assessments.
- TICs: Insurance setups vary. Some TICs have a single master policy. Others split responsibilities. Lenders need clarity on coverage and loss allocation.
- Co-ops: The corporation carries a master policy. Shareholders typically carry policies for personal property, liability, and loss assessment coverage.
Resale and liquidity in SF
Buyer pool and days on market
- Condos: Broadest appeal, especially to out-of-area buyers and a wide range of lenders. This generally means stronger liquidity.
- TICs: Narrower buyer pool. Some buyers perceive higher risk due to shared obligations, and many lenders require more equity, which can slow resale.
- Co-ops: Liquidity varies. Well-run co-ops with healthy reserves and reasonable sublet policies sell more easily. Restrictive boards can limit demand.
Approval friction and transfer logistics
- Condos: Sales typically do not require HOA approval. Still, buyers review association documents, budgets, and any assessments or litigation.
- TICs: Agreements may include rights of first refusal, supermajority approvals, and complex default or buyout provisions that add steps to a sale.
- Co-ops: Boards often require interviews and can approve or deny buyers per corporate bylaws. Transfer fees and house rules can influence buyer interest.
Rental and short-term rental rules
San Francisco regulates short-term rentals and requires registration and primary residence rules. Each building type may impose additional restrictions. Buildings with strict sublet limits reduce potential rental income, which may affect investor interest and pricing.
Governance and shared costs
How decisions get made
- Condo HOAs: Governed by CC&Rs and bylaws, with duties and disclosures set out by Davis-Stirling. Expect budgets, reserve planning, meeting minutes, and standardized owner protections.
- TICs: Run by a private agreement that defines voting thresholds, cost allocation, maintenance responsibilities, and exit or default remedies. Quality varies by building.
- Co-ops: Run by a corporate board. The board manages admissions, maintenance, house rules, and financial policies.
Transparency, reserves, and special assessments
Adequate reserves lower the risk of large special assessments. For condos, state law provides structured disclosures on budgets and reserves. TICs and co-ops require careful review of agreements, corporate financials, and meeting minutes to understand long-term obligations and risk.
Insurance and earthquake considerations
Master policy scope matters. An all-in policy may cover more common elements, while a bare-walls policy can shift interior risks to owners. High deductibles and the lack of earthquake coverage can lead to significant assessments after a claim, which is important to consider in the Bay Area’s seismic environment.
Which option fits your goals
- You want the most financing choices and wide resale appeal: A condo usually offers the broadest lender access and buyer pool, plus standardized disclosures.
- You value price per square foot in a prime neighborhood and plan to stay for a while: A TIC can be a strategic entry point. Expect more complex financing and resale, and look closely at the TIC agreement.
- You prefer a curated community and are comfortable with board oversight: A co-op may suit you, especially if you value strong house rules and you have flexibility with down payment and approval timelines.
SF due diligence checklist
For condos
- CC&Rs, bylaws, and house rules
- Latest budget, financial statements, and reserve study
- Meeting minutes for the last 12 to 24 months
- Master insurance details and deductibles
- Any pending special assessments or litigation
- Estoppel or resale certificate items and transfer fees
- Owner occupancy data and investor concentration
- Whether the project meets your intended loan program rules
For TICs
- Full TIC agreement, including allocation schedules, maintenance rules, default and buyout provisions
- Preliminary title report showing each owner’s fractional interest and any liens
- TIC financials, shared bank accounts, and reserve arrangements
- Minutes or notices documenting assessments or disputes
- Master and unit insurance coverage details and named insureds
- Any cross-collateralization or lender agreements
For co-ops
- Articles of incorporation, bylaws, proprietary lease
- Corporate financial statements and recent tax returns
- Corporate minute book and shareholder ledger
- Master insurance and shareholder coverage expectations
- Board interview process, sublet policy, transfer requirements, and fees
Smart transaction tips
- Favor condos or TICs that have converted to condos if you want broader financing and easier resale.
- If you sell a TIC, prepare your documents early, and share a lender list to help buyers underwrite the deal.
- Build time into your schedule for co-op or TIC approvals and lender reviews, which can take longer than a standard condo sale.
- Engage specialized professionals who understand SF’s conversion rules, tenant protections, and transfer tax mechanics. This helps you spot risk early and negotiate with confidence.
Buying in San Francisco rewards preparation. If you match your priorities with the right ownership structure and complete focused due diligence, you can protect your flexibility and position your investment for the long term.
Ready to compare options on a specific building or listing and map a clear path to offer? Reach out to Haley Tone to schedule a confidential consultation tailored to your goals.
FAQs
What is the main difference between a condo, a TIC, and a co-op?
- A condo is a separate real estate parcel you own. A TIC is a shared ownership interest governed by a private agreement. A co-op is corporate share ownership paired with a proprietary lease.
How do financing requirements differ in San Francisco?
- Condos have the broadest lender access and may qualify for conventional or some government-backed programs. TICs and co-ops often require higher down payments, stricter underwriting, and specialized lenders.
Are FHA or VA loans available for these property types?
- Some condos may qualify if the project is approved. TICs typically do not meet those program rules unless converted. Co-op eligibility is limited and varies by project and lender.
What should I review before writing an offer?
- For any building, review governing documents, budgets, reserves, insurance, meeting minutes, and any pending assessments or litigation. For TICs and co-ops, also review the TIC agreement or proprietary lease and board policies.
How do rental and short-term rental rules affect value?
- San Francisco regulates short-term rentals, and many buildings add stricter rules. Tight sublet policies can limit rental income and narrow the buyer pool, which can affect pricing and time on market.
What risks should I consider for reserves and insurance?
- Low reserves, high master policy deductibles, and lack of earthquake coverage can lead to large special assessments after a claim. Always check reserve studies, assessment history, and insurance scope before you commit.