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Jamie's Ideas - Condo Ownership Classification

Volume 2


Greetings!! I hope you had a great week! Today I am going to share a pet peeve I have: condos that are listed on the MLS as townhouses. (I know, the monstrosity, right? ) I’ll start by saying that “townhouse” doesn’t even exist in the world of a lender. Our classification is “condo” or “Planned Unit Development (PUD).” A condo is legally a condo; a PUD is anything else with an HOA. Lenders will refer to a townhouse as an attached PUD, and a SFR that has HOA dues as a detached PUD. The line between condo and PUD used to be clearer, but then came the rise of the “Townhouse Style Condominium.” These types of properties look like a townhouse and are often marketed like a townhouse, but are legally condos and therefore priced and underwritten like condos. The best solution I’ve seen is that these properties are classified as townhouses on the listing, but then “Condominium Ownership” is on the listing as well. Why is the distinction between Condo and PUD important?

  • Interest rates can be higher on a condo.

  • Condos require a higher level of scrutiny from an underwriting perspective (PUDs do not typically require an HOA Questionnaire so they can often close faster and have less risk when waiving financing contingencies).

  • It’s honestly kind of awkward when *I* am the one telling a buyer that the property they are buying is legally a condo when they thought it was a townhouse. They feel like they should have known that before they go into contract. (If I am given the address before someone makes an offer on a property, I always check to see if it’s legally a condo or PUD and advise them accordingly).

So, what can you do as a Realtor?

  • I strongly encourage you to check to see if a listing says “condominium ownership” and point that out to your buyers.

  • I have unfortunately seen many times when the listing agent didn’t include “condominium ownership” in the listing even though it was a townhouse style condo. There are two places you can check to make sure your buyers have the right information:

    • The prelim will indicate if a property is a condo either at the beginning of the prelim with this type of verbiage:


Or in the Notes section with this type of verbiage


  • If a prelim is not available, pull a property profile that includes the legal description. If the legal description has the word “Unit,” it’s a condo. I have never personally seen a property that didn’t follow that rule.

Here is a legal description of a condo from a property profile:



Here is another condo legal description from a property profile:


Here is an example from an attached PUD, with no reference to a “Unit”:

I hope this information can help you correctly identify a condo versus a PUD. I think this can be useful whether you are on the buyer’s side or the seller’s side.

If you have any buyers that are looking to get pre-approved, I’d love the opportunity to help them. They can email me or call me at 408.313.8970.


Jamie Myers | Home Loan Advisor Golden 1 Credit Union C (408) 313-8970 E jmyers@golden1.com NMLS #312309 880 E. Campbell Ave, Suite 104 Campbell, CA 95008





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