What’s the difference between a Townhouse and a Condo?

Seattle WaterfrontPhoto: The Seattle Waterfront near Pike Place Market

This is a topic that confuses most people, even REALTORS® on occasion. It looks like a townhouse but why is it considered a Condo?

The definition of a Condominium is a form of ownership where units are owned by individuals but the land and common areas are owned jointly with all owners.

Why does it matter if it’s a Townhouse or Condominium? The answer is simple – financing. There are certain criteria necessary for it to be financed, especially if you are a first-time home buyer and want to use an FHA loan. The ratio of rental versus owner occupant units in a community will also determine if it qualifies for an FHA loan.

One way to check whether it’s a Condo or Townhouse is to check the tax records. If the Legal Description on the tax records lists a lot number, it is most likely not a Condominium.

Don’t go by the name alone or by information on the MLS. Most owners (and sadly, most agents) don’t actually read the tax records. Just because the name of the complex is “Garden Grove Townhomes”, doesn’t mean they are actually Townhouses. That being said, there is a special exemption from project approval for “Site Condominiums” defined as detached units with no attached/shared garages, etc. Site Condominiums are typically only for a few states.

Still confused? If you live in Arizona and have a Townhouse or Condominium (or you just aren’t sure which it is), contact me and I will help clarify this for you.

Note: If you are paying cash for your Townhouse or Condo, most of this information is irrelevant to you.


Do you know someone who has a Townhouse or Condo to sell? Are you considering moving into a single family detached home with more space and a backyard? Contact me. I’m never too busy for your referrals.

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