Hello {first_name},

Have you noticed that every property has a classification?

The four main types are condominium, PUD (Planned Unit Development), single-family and Co-op. It is important to know the difference between these classifications because each one of these classifications could dictate how much of the home or building and land that you actually own individually and may affect the financing type and rate of your mortgage.

Most people associate the condominium or ‘condo’ with a high-rise building with a one-story apartment style unit… But did you know that a free-standing home can be a condo? This is because a condominium is a form of ownership and not a style of home. In a condominium, an individual has title to the interior unit or space but the outdoor spaces, building exteriors and parking lot/streets are jointly owned by the condominium association.

With a condo, the individual is responsible for the ‘walls-in’ portion of the building unit. The same is true of townhouse properties that are zoned as condominiums.

So, what is the difference between a townhouse condo and a townhouse that is not a condo?

The difference is that in a traditional townhouse that is not a condo, the lot/yard, exterior and interior is owned and maintained by the individual. Most townhouse communities in our area have an HOA or Homeowners Association and this is sometimes classified as a PUD or Planned Unit Development.

A PUD is typical when regulatory requirements dictate specific types of land use. For example, the regulations may require that a certain amount of land be used as parks or that a certain amount of land must be set aside for commercial or retail shopping. Finally, there is the single- family home which can be part of a HOA or not. Either way, a townhouse or single-family home that is part of a PUD has individual ownership of the building structure and the lot or land that is deeded with it.

A Co-op or cooperative, is a different animal all together. You don't own your individual property or apartment/condo, instead you own shares in a corporation and the corporation owns the building/property. These types of properties require a totally different type of financing that are really not a traditional mortgage.

Let me know if you have any questions.