Townhouse
A home that shares one or more walls with the units next door. You usually own the land under your unit, unlike a condo. Rules vary by community, so the HOA setup matters.
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Where this comes up in a sale, and what follows
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Part 1 of 4
Why a seller cares
A townhouse shares walls and usually an HOA, but you own the land under it. Whether it is treated as a condo or a PUD by lenders depends on the deed, and that affects which buyers can finance it.
Part 2 of 4
A simple example
Your townhouse is deeded as fee simple with a $180-a-month HOA. The buyer's lender treats it as a PUD and asks for the HOA documents only.
| How it is deeded | How it is underwritten |
|---|---|
| Fee simple, land included | Like a house with an HOA |
| As a condominium unit | Like a condo, building and all |
| Either | With a party wall and shared maintenance |
The word townhouse describes the shape. The deed decides the financing.
Part 3 of 4
What people get wrong
That all townhouses are the same kind of ownership. Some are condos, some are PUDs, and the buyer's lender will ask which.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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