Condos, PUDs, Townhomes

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What are the differences between Condos, PUDs, and Townhomes?


A buyer of a condominium owns his or her individual unit, plus a percentage of the surrounding property, including land and any amenities on the property. (The word "condominium" is Latin, meaning "common ownership" or "common control.") Residents are members of a homeowners' association and pay a monthly fee to the association in exchange for maintenance of the common property. Each condominium complex has a master deed which outlines the percentage of ownership each unit in the development has invested in the entire complex. That percentage determines residents' monthly dues to the association. Condominiums come in a wide variety of architectural styles, from two- and three-story buildings arranged apartment-complex style with carports to luxurious high-rise properties with sweeping views of the surrounding city or natural landscape.

For all conforming condos -

• On refinances the property needs to be turned over to the Homeowners Association (HOA)  for 1 year.
• The HOA is not in litigation with any outside parties
• 60% owner occupied
• Common elements complete.

If any of the above are not there - you may have to go non-conforming.  There are several lenders that have less stringent guidelines, but the rate may be a bit higher.


A buyer of a townhome purchases his or her individual unit, as well as the ground underneath that unit. Each townhome has its own roof, in contrast to condominiums. Townhome residents also typically belong to a homeowners' association and pay monthly fees in exchange for the general maintenance of common outdoor areas. Townhomes occasionally come with such single-family home amenities as garages and backyards (albeit small backyards), for which owners generally are responsible for maintaining.

How can you tell if a unit is a townhome or a condo?

There are two major differences between townhomes and condominiums. One difference is the style of the units; the other is type of ownership.

  • Townhomes always have their front door located on the ground level. Whether one-story or two-story, if the front door is on ground level of all units in the complex, it is a townhome.

  • Condominiums - If you have to climb stairs to get to the front door of any unit in the complex, it is a condo.

  • Townhome ownership owns land.

  • Condominium ownership does not own land.


Do townhomes and condos have homeowner's fees?

Yes; both have homeowners' fees that you pay monthly over and above your regular mortgage payment. Every homeowner is assessed the same fee. These fees help cover liability insurance for common areas, costs to maintain parking lots, the entrance sign, outside lighting, pools, tennis courts, clubhouses, the exterior of the building including roof, etc.


PUDs - Planned Unit Developments

The difference between condominiums and planned developments is strictly a legal difference and not necessarily architectural design.


A condominium project consists of an ownership in a "unit" which must be coupled with an appurtenant (def. A right, privilege, or property that is considered incident to the principal property for purposes such as passage of title, conveyance, or inheritance) undivided interest in common in a portion of the project other than the units.  IE - common areas.


A planned development consists of ownership of a "lot", with the common area either owned by an owners' association or in common by all the owners. Ownership of a lot in a planned development usually consists of all the land within the property boundary lines as denoted on the subdivision map as well as all structures thereon. In a condo project, a portion of the sky over all the units or a space below the ground could serve as the required appurtenant interest.


Viewing a project's design features alone will usually not provide a determination of whether the sub-division is a condominium or planned development.

The financing for a PUD may be different from a condo, and slightly better.