A lender does not underwrite the listing photo. A “townhome” can be a fee-simple planned-unit development or a condominium. Do not treat every townhome as a condo — and do not assume a townhome skips HOA documents. Snapshot as of 2026-08.
Lenders underwrite the legal regime, not the listing photo. A “townhome” can be a fee-simple planned-unit development (you typically own the land under the unit) or a condominium (you own the unit plus an interest in common elements). The recorded plat and CC&Rs decide. Do not treat every townhome as a condo.
This page describes the property’s legal structure and documents. It does not describe who should live there.
Condo regime vs fee-simple townhome
| Question | Condo regime | Fee-simple / PUD townhome |
|---|---|---|
| What you typically own | The unit plus an interest in common elements. The land under the building is usually association-owned. | Often the unit and the land under it, with CC&Rs and an association for shared areas. Confirm the plat. |
| Docs a lender commonly asks for | Condo files typically need an HOA questionnaire, budget, insurance (walls-in vs master), litigation, occupancy mix, and — for FHA — current project approval on HUD’s list or single-unit approval. | PUD / fee-simple townhomes still produce CC&Rs and often an HOA questionnaire. FHA condo-roster and concentration tests usually do not apply the same way as a condo regime. Overlays still exist. |
| FHA project test | An FHA purchase of a condo unit usually needs the project to appear as currently approved on HUD’s condominium list, or to qualify for single-unit approval. An expired, rejected, or withdrawn project is not the same as approved. | HUD’s condominium roster is a condo-project tool. A typical fee-simple townhome is not that list — and a townhome that is legally a condo still is. |
Educational snapshot. Conventional condo overlays exist too; they are not this HUD list.
HOA dues still sit in DTI
Required HOA dues are housing expense either way. A modest PITI plus a large HOA can fail DTI on a townhome or a condo. HOA dues that are required for the subject property are housing expense. They sit in front-end DTI with principal, interest, taxes, and insurance — not in the “other debts” box of an affordability toy. Deep guide: front-end vs back-end with HOA.
If it is actually a condo
FHA needs current project approval or a single-unit path: FHA condo roster / project approval. Look the project up before you write an FHA offer as if the building is eligible. Project approvals expire and must be recertified. Look up the project on HUD’s current list before you write an FHA offer as if the building is eligible.
A side-by-side duplex on its own parcel is a different file from a condo: FHA duplex house-hack.
Checklist to ask for early
- Recorded plat / legal description: condo vs PUD vs townhouse lot.
- HOA questionnaire, budget, and insurance certificates (master plus HO-6 on a condo; often HO-3 on a fee-simple townhome). See hazard vs HO-3 vs HO-6.
- Litigation and special assessments. A special assessment or pending litigation at the project is a property-eligibility question as well as a payment question. It is not the same line as regular HOA dues.
- Monthly dues and what they include (so DTI is not missing a line).
What happens next
- Get the legal project name from the listing agent, not only the marketing name.
- If FHA is the reason you wanted the building, run the HUD search on a condo regime first.
- Program overview: FHA loans in Utah. First-time cash stack: first-time hub.
Common questions
Keep going
What to do next
Education first. A conversation with a loan officer is how you find out what may actually fit your file.
Loan information is provided by Ondo Real Estate (NMLS ID on file). This is not a commitment to lend, a loan approval, or an offer of credit. Rates, terms, and payments shown are estimates for illustration only, are not a quote, and are subject to credit approval, underwriting, and market conditions. You are not required to use Ondo for financing to buy or sell with Ondo. Equal Housing Lender. Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision. Licensing and disclosures