Thinking about a place in Hayes Valley but not sure whether a TIC or a condo is the smarter move? You are not alone. Financing, governance, and resale can look very different between these two ownership types in San Francisco, and the details affect what you pay now and how easily you can sell later. This guide breaks down the key differences with a Hayes Valley lens so you can buy with clarity and confidence. Let’s dive in.
Quick definitions
What is a TIC?
A tenancy in common is co-ownership of a single property where you own a fractional interest and have the right to exclusively use a specific unit based on a private TIC Agreement. You do not receive a separate unit deed. Documents set rules for use, expenses, repairs, and how owners sell or resolve disputes. Financing may involve a master mortgage that can affect all owners, or individual loans approved by TIC-friendly lenders.
What is a condo?
A condominium gives you a deed to a specific unit plus a shared interest in common areas. A homeowners association operates under California’s Davis-Stirling Act, which standardizes governance and disclosures. Condo projects range from boutique conversions to mid- and high-rise buildings across San Francisco.
Ownership and title certainty
Condo
You receive a unit deed that is straightforward for title insurance and resale. Buyers and lenders view this as standard ownership. This typically makes condos simpler to finance and easier to transfer.
TIC
You receive a fractional interest in the whole property and rely on the TIC Agreement to define your exclusive-use unit and rules. Title can be more complex, especially if a master mortgage exists or if there are liens on the property. Careful review of title, the agreement, and any lender documents is essential.
Financing in San Francisco
Condos: broader options
Most buyers can use conventional mortgages for condos, and some projects qualify for FHA or VA financing if the building meets program approvals. Conforming loans can mean lower rates and lower down payments for qualified borrowers. Project approval and HOA financial health still matter for lender underwriting.
TICs: specialized lending
TIC loans are commonly offered by local or portfolio lenders. Expect a larger down payment, often 20 to 30 percent or more, possibly higher interest rates, and tighter underwriting tied to the stability of all co-owners. FHA or VA financing is generally not available for TICs.
Buyer takeaway
Financing flexibility is wider for condos, which expands your buying power and the future buyer pool when you resell. TICs can offer a lower entry price but require comfort with specialized lending and a smaller pool of future buyers.
Monthly costs and governance
Condos
HOA dues fund master insurance, reserves, maintenance, and sometimes professional management. Under Davis-Stirling, HOAs must follow standardized rules, provide reserve studies and financials, and follow meeting and election protocols. Special assessments can occur, so you should review budgets and reserves closely.
TICs
Monthly assessments are set by the TIC Agreement and the co-owners. Reserve planning is not standardized by statute, so policies vary from well-run to informal. The quality of the TIC Agreement and the co-owners’ practices will shape your experience and costs.
Insurance and liability
Condos
The HOA typically carries a master policy for the building. You carry an HO-6 policy for interior items and improvements, and you may add loss assessment coverage. The CC&Rs define who covers what and where responsibility lines are drawn.
TICs
Coverage can vary widely. Some TICs have a master policy, while others require broader individual policies. If a master mortgage exists, understand lender insurance requirements and how a default or claim could affect all owners.
Resale and liquidity
Condos
Because financing is more available and ownership is familiar, condos usually have a larger buyer pool and smoother resale. Liquidity tends to be stronger, which can support pricing and shorten time on market.
TICs
TICs often attract buyers seeking a lower price point in desirable neighborhoods like Hayes Valley. That said, the buyer pool is smaller due to financing barriers, which can affect days on market and pricing. Plan for more selective demand and be ready to market the property’s strengths.
Condo conversion in SF
Turning a multi-unit property into condos in San Francisco involves a formal city process, permits, and compliance with local tenant protections. Timelines and costs vary, especially if units are tenant-occupied. If your long-term plan includes conversion, loop in a land-use attorney and understand San Francisco’s rules before you buy.
Hayes Valley lens
Hayes Valley is highly walkable with a strong mix of boutique condos, converted flats, and smaller multi-unit buildings where TICs have historically been common. Inventory can be tight, and well-presented listings draw interest. In this micro-market, a TIC may offer a lower upfront price versus a comparable condo, but you should weigh financing complexity and future resale against the location and layout you want.
Due diligence checklist
If you are buying a TIC
- TIC Agreement and all amendments.
- Preliminary title report and recorded deeds to spot master mortgages, liens, or encumbrances.
- Mortgage structure: confirm if there is a master mortgage, payment sharing, default remedies, and cross-collateralization.
- Owner occupancy and rental history of all co-owners.
- Current budgets, assessment history, bank statements for TIC accounts, and any management agreements.
- Insurance: master policy details and required individual coverage.
- Reserve funding level, capital improvement history, and upcoming projects.
- Maintenance schedules, inspection reports, and outstanding repairs.
- Dispute resolution clauses and buy-sell or exit provisions.
- Any pending litigation, code violations, or permit issues.
- Tax considerations, including expected property tax reassessment on transfer.
If you are buying a condo
- CC&Rs, Bylaws, amendments, and the recorded condo map.
- HOA budget, most recent reserve study, and financial statements.
- Master insurance declarations and unit owner coverage requirements.
- Special assessments planned or pending, recent dues increases, and any insurance claims.
- Owner occupancy ratio and any rental, pet, renovation, or leasing restrictions.
- If needed, verify FHA or VA project approval early in your process.
Physical inspections for both
- General home, structural, and pest inspections, with attention to older systems.
- Seismic considerations in older SF buildings and any retrofit history.
- Utility metering and how expenses are allocated among owners.
- For condos, confirm unit boundaries match recorded plans. For TICs, confirm exclusive-use rights are clear in the Agreement.
How to choose with confidence
Clarify priorities Decide what matters most: lowest down payment, total monthly cost, governance transparency, or future resale ease. Be honest about your comfort with co-owner dynamics and specialized lending.
Model the money Compare apples to apples: purchase price, down payment, interest rate, HOA or TIC dues, insurance, and expected reserves or assessments. Run conservative scenarios for both structures.
Verify the building For condos, scrutinize HOA reserves and any litigation. For TICs, test the strength and clarity of the TIC Agreement and confirm insurance and mortgage structures that protect you.
Align with your timeline If you expect to sell within a few years, condo liquidity may be a priority. If you plan to stay longer and can handle a larger down payment, a TIC might unlock a great unit and location.
Bring in specialists Use a lender that understands the product you are buying. Consider legal and tax advisors for conversion questions, master mortgage exposure, and Prop 13 reassessment impacts.
Common pitfalls to avoid
- Skipping the TIC Agreement deep dive. The agreement is your rulebook. Confirm default remedies, exit rules, and who pays what.
- Assuming future condo conversion. Conversions need city approvals and can be time consuming and costly. Never plan on conversion without expert guidance.
- Ignoring reserves. Whether HOA or TIC, underfunded reserves can lead to assessments. Review financials, not just dues.
- Overlooking insurance gaps. Confirm master coverage, your responsibilities, and lender requirements.
- Delaying lender conversations. Early pre-approval is essential, especially for TICs.
Make your offer stronger
For TICs
- Get pre-approved with a TIC-experienced lender before touring. Include a financing contingency tailored to the TIC structure.
- Make the offer contingent on full review of the TIC Agreement, insurance, and financials.
- Request disclosures on any master mortgage, assessment history, and disputes among owners.
For condos
- Verify HOA reserves, pending assessments, and litigation, and include review contingencies.
- If using FHA or VA, confirm project approval early and structure timelines accordingly.
- Tailor inspection contingencies to building age and systems, including seismic considerations.
Next steps
If you are weighing a TIC against a condo in Hayes Valley, a clear plan will save you time and money. Define your goals, line up the right lender, and work with a local expert who understands both structures and the neighborhood’s mix of buildings. When you are ready, request a focused walkthrough of financing paths, document reviews, and a shortlist of properties that match your needs.
Ready to compare options and craft a winning plan? Request a personalized market consultation with Unknown Company.
FAQs
What is the main difference between a TIC and a condo in SF?
- A TIC is fractional ownership of one property governed by a private agreement, while a condo gives you a deed to a specific unit plus a share of common areas under an HOA.
Can I use FHA or VA financing for a TIC in San Francisco?
- Generally no. FHA and VA loans are typically available only for approved condo projects, not for TIC interests.
Are TICs always cheaper than condos in Hayes Valley?
- Listing prices for TICs are often lower, but higher down payments, potential rate differences, and reserves or assessments can change the true cost.
How risky is a master mortgage in a TIC?
- If a master mortgage encumbers the property, a default can affect all owners. You should review default remedies and how payments are structured before you buy.
What protections does the Davis-Stirling Act provide for condo owners?
- It standardizes HOA governance, financial disclosures, reserves, and meeting protocols, giving you clearer rights and remedies than a private TIC Agreement typically offers.
Can a TIC in Hayes Valley be converted to condos later?
- Possibly, but conversion requires city approvals and compliance with tenant-protection rules. It can be lengthy and costly, so do not assume it will be feasible for your building.
