It’s A Townhouse NOT a Condo?

By: Stephanie Diana Wilson

Now this is a phase I have had to explain over and over drives me nut. It drives me nuts when sales reps and branches try to tell me a subject unit is, “it’s a townhouse not a condo”. Which is a common statement in DC and Colorado where there are townhouse style condos going up and attached PUD’s. This is a common misconception as townhouses are a style of condo. Often what the person wants to say is the unit isn’t a condo the subject unit is an attached Planned Unit Development or PUD.

The first issue is that many don’t really know what a condo is exactly. A Condo much like a Single Family Home (SFR), Modular Housing, Manufactured Housing, Planned Unit Development (PUD) is a legal description of a property. Where row, townhouse, garden, high rise, etc are styles of properties. The legal description for a condo in short is a property where each unit owner owns their unit with an undivided percentage of ownership of the whole property.
Now it is true that one style of condo is a lot like an apartment where there is a person living right above each other. However, the styles differ greatly in fact there are styles of condos called detached and site condos which are much like a single family home or SFR within a condo complex.

Low Income Retirement Condos or Complex
There are also condo projects that are townhouse style where there is an up and a downstairs level inside the unit. Also where a unit might be single story like an SFR or cottage like.


Now a PUD is a horse of a different color. PUD’s are a planned unit within a subdivision which can have mixed use land within. A great example from popular culture is in the movie Poltergeist the homes are PUDs within a sub division. Course that also can take us on the topic of track homes which is a topic for another day. The difference further in a PUD from a Condo is how they are underwritten. As a PUD legally is defined much like a house so it it underwritten much like an SFR. A Condo on the other hand is more involved because the financial implications an HOA can create as a risk factor for underwriting.

To avoid incorrect underwriting always look at the legal description which is most easily found on the title. Usually condos in a legal description state the word condo or note a percentage undivided interests. I have never seen a legal description as a townhouse. So, the moral of the story is alway read the title report. It can save on underwriting issues, wrong appraisals and other additional costs change in property type can cause late in a loan. And know there is no such thing as a property type called townhouse. But there is a condo style called townhouse.
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About The Author of Condo Land

Afternoon People.  My name is Stephanie Diana Wilson- Gast and I am the author of this Blog, “Condo Land”.  It was created to help the gambit of people in the real estate industry specifically regarding Condos the management, investment, and underwriting of such.  However, from time to time there will be articles just on business related items and real estate focused items.  Much of the quotes from Fannie Mae (FNMA) were from the guidelines at the time the article was written.  As our CYOB (Cover Your Own Bum), please if you have questions speak to your real estate professional or underwriter.

I got my start in the Real Estate industry doing affordable housing property management.  From there during the 2008 financial crash my family  and I started a Volunteer program called TW housing, (Which is short for Torres- Wilson Housing).  The volunteer program ended in 2014 but the accomplishments it made to the Oakland community deserve to be put to paper.  Or more to the internet pen.  How it started was in 2008 while I was working doing Property Management in Contra Costa County I did on site Property Management.  One of my good friends Teresa came to see me at work (since I had to live where I worked) and she brought to me and my husband an issue she found with her step mother.  Her step mother claimed she was a victim of ID theft and now her home was about to be foreclosed on.   Since, she could no longer afford the mortgage and the foreclosure would kill her financially she needed help badly.

So, the first problem she needed to file with the police department and her creditors that she was a victim of ID theft.  This is becoming a more and more common crime in the US so I advise all to watch their credit reports, bank statements and how you dispose of all documentation accordingly.  Also this crime is being seen more and more done to seniors and often as in this case it was a family member who stole her info.  I know this makes trusting even family hard but it is a harsh truth.

Second we needed to get her onto a wait list for affordable housing.  Just in case we were not able to fight in court or make a plan to save her home she needed a place to live.   Since there was so much confusion industry wide regarding the MHA process there was so much stone walling to the home owners making many just get up and walk away from their homes.  This not only hurt the homeowner but the economy as well.  For fear that her home would be taken back in foreclosure or that she would also choose to wipe her hands and walk away she needed a place to live that was affordable for her fixed income.  When there is a bad situation it is best to plan ahead so that it all works out in the end.   Using connections I had to get her quickly onto wait lists and she got into housing.  The place she got into is centrally located to grocery, shopping and restaurants.  It also had a meal plan for her since she “didn’t do cooking”.  So, she was very happy for all that.

Now what we did for her house… while fighting to get an MHA loan which is a Making Homes Affordable and mortgage adjustment through the Oboma Housing Program to help people stay in their homes we came up with a plan.  What we did was reset her home loan as it being her investment property, did the same with her home owners insurance.  We also fixed it up with volunteers who donated materials and services.  Thus making it ready for a HUD inspection.  We got it inspected, approved and rented within a month.  Which was a feat in it of itself.  Now she has her home working for her, so she can afford to take care of her home and stay above water and live in a safe comfortable affordable housing program.

After helping her various other Oakland residents asked for help because they were in similar issues especially with their home in pre-foreclosure. So, I helped those people convert properties of theirs into rental properties and taught them how to manage their own properties.  And for others who wanted to stay in their properties we helped facilitate the MHA process and assisted in job coaching, and budget/ financial training.   Also I helped them get training through the local housing authority as property managers and property owners.

Since then I have gone into Mortgage Compliance as a career field specializing in Condo Project Review/ Condo Compliance.  After noticing how many people across the board have so many questions on investing and underwriting Condos I started this blog and called it, “Condo Land”.  I am currently finishing my Masters in Operations Management at Southern New Hampshire University and preparing to start a Doctoral Program in Fall of 2017 in Business Administration.  Feel free to check out more info on me via LinkedIn at Public Profile  

Should you have a topic on Condos that you would like researched and written about please leave a comment or connect via LinkedIn.  If this or any other article helped you or interested you remember sharing is caring.