Curious why so many Mission District “TICs” look like condos but come with very different rules and price points? If you’re focused on value and love the Mission’s energy, you’ve probably seen TIC listings and wondered how they work. In this guide, you’ll learn what a TIC is, how it differs from condos and co-ops, what to expect with financing and costs, and how to decide if it fits your goals. Let’s dive in.
TIC basics in the Mission
A Tenancy-in-Common, or TIC, is a form of ownership where you and your co-owners each hold a fractional, undivided interest in the entire property. You do not own your unit as a separate parcel. Instead, your exclusive right to live in a specific apartment is granted by a recorded TIC agreement and occupancy documents.
In the Mission District, many older multi-unit buildings were sold as TIC shares rather than converted to condos. A typical setup might be a three-unit building where each buyer owns a one-third interest in the whole property and has the right to occupy one designated apartment. The look and feel may be similar to a condo on the inside, but the ownership and financing are different.
You’ll usually see three core recorded items in a TIC:
- Deeds that convey fractional interests to each owner.
- A recorded TIC Agreement that outlines expense allocation, maintenance duties, voting rules, transfer restrictions, and decision-making procedures.
- Occupancy agreements that grant exclusive use of a specific unit to each owner.
Most Mission TICs include shared expenses based on each owner’s percentage, a common operating account or reserve fund, and rules for selling, subletting, and capital improvements. These rules often feel stricter than what you see in many condominiums, because the agreement has to cover a lot of shared risk and decision-making.
TICs vs condos vs co-ops
Understanding the differences helps you compare price, financing, and resale.
Ownership structure
- TIC: You own a fractional interest in the entire building. Your right to occupy a particular unit is contractual.
- Condo: You own your unit as a separate parcel and also hold a share of the common areas.
- Co-op: A corporation owns the building. You own shares in the corporation and live in the unit through a proprietary lease.
Title and transfer
- TIC: You transfer your fractional deed interest. TIC agreements often include a right of first refusal and other transfer rules.
- Condo: You transfer title to a specific unit. It’s typically more straightforward to buy, finance, and resell.
- Co-op: You transfer shares and the board usually must approve the buyer.
Governance and rules
- TIC: The recorded TIC Agreement controls budgets, maintenance, decisions, and dispute procedures. Some choices can require unanimous or supermajority votes.
- Condo: A homeowners association and bylaws govern operations under a standard statutory framework.
- Co-op: A board of directors exerts strong control over building policies and approvals.
Financing and marketability
- TIC: Fewer lenders, stricter underwriting, and often higher down payments and rates. The resale buyer pool is smaller.
- Condo: Widely financeable with conventional loans and a broad buyer market.
- Co-op: Financing can be available through specific lenders, and board approval can affect marketability.
Conversion potential
- TIC: Many San Francisco TICs have converted to condos through the city’s process. Conversion can improve financing options and resale liquidity, but it requires time, money, and compliance with municipal rules.
- Condo: Already a condo, so no conversion needed.
- Co-op: Can be converted, though the path is different and can be complex.
Financing, costs, and taxes
Financing a TIC is different from financing a condo. Fewer lenders offer TIC loans, and many national banks do not underwrite them. Most TIC mortgages come from specialized or local portfolio lenders that understand fractional ownership.
Typical TIC underwriting features include:
- Larger down payments, often in the 20 to 30 percent range for owner-occupied purchases.
- Interest rates that may be higher than comparable conventional condo loans.
- Stricter credit and debt-to-income review. Lenders also scrutinize the TIC Agreement, the building’s condition, and other owners’ financial health.
- Limited government-backed options. FHA and VA lending for TICs is generally not available in most TIC structures. If you rely on FHA or VA, you will need to confirm eligibility very early with an experienced lender.
Refinancing a TIC can be more challenging than refinancing a condo, and resale can take longer because the buyer pool is narrower. Price and time on market can reflect that reality.
When you budget for a Mission TIC, plan for several expense categories:
- Your monthly mortgage payment.
- Monthly shared costs for property taxes, building insurance on a master policy, common-area utilities and maintenance, and reserves. Your share is usually based on your percentage interest.
- Individual insurance similar to HO-6 style coverage for personal property and liability, and often loss assessment coverage.
- Reserve contributions and possible special assessments for major work such as roof, plumbing, or seismic upgrades.
Property taxes can feel confusing. The transfer of a fractional interest generally triggers reassessment for your portion under California rules. The building’s assessed value and how each share is allocated can be complex, so make sure you understand how your taxes will be calculated before you close.
It’s also important to evaluate building risks that can affect your ownership costs:
- Co-owner default: If another owner fails to pay their mortgage or their share of expenses, the building’s finances can be strained. Many TIC Agreements outline remedies, but you should understand them before you buy.
- Building condition: Many Mission buildings are older and may need capital improvements. Seismic retrofits, roof replacement, plumbing, and electrical upgrades can be significant investments that require coordinated owner decisions.
Who TICs suit in the Mission
TICs can be a smart path into the Mission for buyers who prioritize location and value. You might be a good fit if you:
- Want a lower entry price than many comparable condos in the neighborhood.
- Are comfortable with shared governance and following a detailed TIC Agreement.
- Plan to occupy the home long term and can work with a specialized TIC lender.
- Are not reliant on FHA or VA financing.
- Understand the potential resale hurdles and are open to condo conversion efforts over time.
Pros and cons at a glance
Every building and agreement is unique, but these themes are common in San Francisco TICs.
Pros
- Lower purchase price points can open doors in high-demand areas like the Mission.
- Flexibility to own in buildings that never converted to condominiums.
- Strong community control when the TIC Agreement is well crafted and followed.
Cons
- Financing constraints can limit options and raise costs compared with condos.
- Shared economic exposure if a co-owner defaults on payments or expenses.
- Stricter governance, with major decisions sometimes requiring unanimous consent.
- Potential for sizable special assessments to fund building upgrades.
- Smaller resale buyer pool and potentially longer time on market.
Due diligence checklist for Mission buyers
A careful review up front can protect your budget and your peace of mind.
- Confirm lender availability early and get pre-qualified with a lender that regularly funds TICs.
- Obtain the recorded TIC Agreement, occupancy agreement, and all addenda. Review them with a real estate attorney experienced in TICs.
- Request operating budgets, reserve balances, histories of special assessments, and any delinquency reports.
- Inspect the building thoroughly, including structural elements, seismic bracing, roof, plumbing, electrical, pest, and habitability items.
- Ask about any past or pending condo conversion efforts, city code compliance, and any active or threatened litigation.
- Understand transfer tax, likely reassessment, and any city registration requirements that apply to the building.
- Review the building’s master insurance policy and confirm required individual coverage.
- Ask your agent for context on recent Mission TIC resales, including time on market and pricing trends.
Is a Mission TIC right for you?
If you love the Mission’s culture and convenience and you’re looking for value, a TIC can be a compelling option. You trade simpler financing and a larger buyer pool for a lower purchase price and shared control. The key is understanding your agreement, your building, and your financing path before you write an offer.
When you want a clear, well-structured plan to pursue a TIC or compare one to a condo or co-op, work with a local advisor who knows the nuances of San Francisco ownership forms and neighborhood dynamics. To explore your options in the Mission and beyond, connect with Gina G. Blancarte for thoughtful buyer representation and a streamlined search.
FAQs
What financing do Mission TICs usually require?
- Many TIC lenders ask for 20 to 30 percent down, with stricter underwriting and interest rates that may be higher than comparable condo loans; FHA and VA are generally limited.
How do Mission TICs differ from condos and co-ops?
- TICs are fractional ownership of the whole property with contractual unit occupancy, while condos are separate unit parcels and co-ops are shares in a corporation with a proprietary lease.
Can a Mission TIC convert to condos later?
- Many San Francisco TICs have converted, but you need city approvals, building compliance, funds for upgrades, and owner votes; timing and costs vary by building.
What happens if another TIC owner stops paying?
- The building’s finances can be stressed; the TIC Agreement may allow remedies such as liens or forced sale, so review those provisions before you buy.
Can you rent out your unit in a Mission TIC?
- Often, but many TIC Agreements regulate rentals or require approvals or owner-occupancy periods; check the recorded documents for exact rules.
How are property taxes handled for TICs?
- A fractional transfer generally triggers reassessment of your share under California rules; your tax allocation depends on the building’s assessed value and agreement.
Do TIC buyers need special insurance?
- You’ll rely on the building’s master policy for the structure and carry individual coverage for personal property and liability, often with loss assessment protection.
