Have you noticed that many listings around Japantown and the Fillmore say “TIC” while others say “condo,” and wondered what it means for you? You are not alone. The ownership type changes how you finance the purchase, how the building is governed, and even your future resale options. In this guide, you will learn the key differences, the local tradeoffs, and a clear checklist to shop with confidence. Let’s dive in.
TIC vs condo: clear definitions
What a TIC means
A tenancy in common, or TIC, means you and other owners each hold a fractional percentage of the entire property. You do not receive a separate deed to a unit. Your rights and responsibilities live in a written TIC agreement that covers cost sharing, use rights, transfers, subletting, dispute resolution, and what happens if someone defaults on a loan.
What a condo means
A condominium legally subdivides the property into individually deeded units plus shared common areas. You own your unit and an undivided interest in the common elements. Rules and operations are set by the HOA under recorded CC&Rs and the Davis‑Stirling Act in the California Civil Code. You can review the law’s framework in the official Davis‑Stirling Act.
Why this matters in Japantown/Fillmore
In and around Japantown and the Fillmore corridor, older walk‑ups and prewar buildings are often organized as TICs, while newer mid‑rise or purpose‑built developments are more commonly condos. That difference affects your loan options, day‑to‑day governance, and resale path. In general, TICs can offer a lower entry price but involve more complex financing and a smaller buyer pool. Condos are more standardized for lending and resale, which often supports stronger liquidity and pricing.
Financing: what to expect
Condo loans are widely available
Condo buyers typically use standard conforming or jumbo mortgages. Some projects may also qualify for insured programs if the building meets program rules. If you plan to use an FHA or VA loan, confirm the building’s status early using HUD guidance on FHA condominium project approval rules.
TIC loans are specialized
TIC financing is less standardized and often comes from portfolio or specialty lenders. Common realities for TICs include:
- Down payment: Many TIC lenders require about 20 to 30 percent down, depending on your profile and the building’s structure.
- Stronger underwriting: Lenders may ask for the TIC agreement, recent building financials, ownership percentages, and any master mortgage details.
- Master mortgage risk: If the building carries a master loan on the whole property, your lender and title company will review cross‑default provisions. A default by one owner can pressure others unless the TIC agreement provides clear remedies.
- Limited FHA/VA: TICs are often ineligible for FHA/VA programs. If you need those loans, focus on approved condos and verify status up front.
Practical tip: Start with a lender experienced in San Francisco TICs or confirm FHA/VA eligibility for condos before you tour. Expect slightly longer underwriting and more documentation for TIC purchases.
Governance, insurance, and monthly costs
How rules and decisions are made
- Condos: HOAs operate under recorded CC&Rs and the statutory framework of the Davis‑Stirling Act, with budgets, board meetings, reserve disclosures, and required buyer packets.
- TICs: Operations rely on the TIC agreement and building rules. There is no single statewide scheme. The quality of the agreement drives how well the building runs.
Insurance and reserves
- Condos: The HOA usually carries a master policy for the structure and common areas. You carry an HO‑6 policy for interiors and personal property. Reserve studies and disclosures are required, though special assessments can still happen.
- TICs: Buildings often carry a master policy, but coverage scope varies. You may need individual unit owner coverage and loss assessment protection. Confirm whether earthquake coverage is included, and how deductibles could be shared. Reserve requirements depend on the TIC agreement, so review how capital projects are funded and what vote is required for special assessments.
Resale and conversion considerations
Marketability and timelines
Condos generally have the widest buyer pool and the most flexible financing, which tends to support easier resale. TICs can sell at a discount compared to similar condos because of financing friction and governance differences. Some TIC agreements include transfer approvals or rights of first refusal, which can add time and steps to a sale. Expect that TIC escrows often involve more documents for buyers and lenders.
Converting a TIC to a condo
Many TIC owners explore condo conversion for individual unit titles and easier financing. In San Francisco, conversion typically requires subdivision mapping, recorded CC&Rs, and city approvals, plus potential upgrades for code compliance or separate utilities. Costs can include legal and design work, city fees, and possible seismic or accessibility improvements. All owners usually must agree. For an overview of the process and permits, review the San Francisco Planning Department’s guidance on condominium conversion. Also consider how ownership changes may affect property taxes by consulting the San Francisco Assessor‑Recorder and your tax advisor.
A local due‑diligence checklist
Use this shortlist to move fast and make a sound decision in Japantown and the Fillmore.
If you are buying a TIC
- Complete TIC agreement and any amendments.
- Ownership list with percentage interests and contact info.
- Building financials for 12 to 24 months, including reserves.
- Master mortgage details, payment allocations, and cross‑default language.
- Building insurance certificates and endorsements.
- Owner meeting minutes and any litigation or claims.
- Rules on subletting, transfer approvals, and any conversion or partition provisions.
- Maintenance history, permits, and any outstanding code issues.
If you are buying a condo
- Recorded CC&Rs, bylaws, and house rules.
- HOA budget, recent reserve study, and meeting minutes.
- Insurance declarations and any pending or recent special assessments.
- FHA/VA status if you rely on those loans. Check with your lender and review HUD resources for FHA project approval.
During inspections and escrow
- Confirm whether utilities are separately metered or master billed.
- Review earthquake and flood coverage limits, retrofit history, and any known seismic issues.
- Ask about pest, moisture, and deferred maintenance common in older central‑city buildings.
Financing and advisory team
- Engage a lender who routinely underwrites TICs or condo projects in San Francisco.
- Ask for a TIC‑specific preapproval if you plan to shop TICs.
- Consult a real estate attorney, a title company familiar with SF TICs, and a tax advisor for potential reassessment questions.
- For general consumer education on ownership and financing types, the California Department of Real Estate provides useful resources.
Which path fits your goals?
If your top priority is standardized financing, straightforward resale, and a familiar HOA framework, a condo may be the better fit. If you value a lower entry price and are comfortable with a specialized loan, careful agreement review, and a narrower buyer pool on resale, a TIC could align with your goals. Either way, compare total monthly costs, risk exposure, and your timeline, not just the list price.
Ready to compare live Japantown and Fillmore options side by side? Let’s map financing, review documents, and build a clear offer plan for your target buildings. For a local, detail‑driven approach, connect with Nathan Jones to schedule a free consultation.
FAQs
What is the main difference between a TIC and a condo in San Francisco?
- A TIC gives you a fractional interest in the whole property governed by a TIC agreement, while a condo gives you a deeded unit plus an HOA governed by the Davis‑Stirling Act and recorded CC&Rs.
How does TIC financing differ from condo financing in Japantown?
- TIC loans are specialized and often require 20 to 30 percent down with more documentation, while condos typically qualify for standard conforming or jumbo loans if the project meets lender and program rules.
Can I use an FHA or VA loan on a TIC purchase?
- FHA and VA loans are commonly available for approved condo projects but are often not available for TICs; confirm eligibility with your lender early in your search.
What are the risks of a master mortgage in a TIC building?
- If one owner defaults, cross‑default provisions can affect other owners; the TIC agreement should outline remedies and protections for co‑owners.
How complex is converting a TIC to a condo in San Francisco?
- Conversion can be feasible but often requires all‑owner agreement, city approvals, mapping and CC&Rs, and possible code upgrades; review the Planning Department’s conversion guidance and consult advisors.
