Condominium
Also called: condo, condominium
Ownership of an individual unit plus a shared interest in common areas, governed by an association.
A condo owner holds the unit interior and an undivided interest in common elements. That structure means the association’s finances and insurance affect every owner directly.
Financing is project-based as well as borrower-based: lenders review the association’s budget, reserves, owner-occupancy ratio, litigation, and insurance, and a project that fails review can make an otherwise strong borrower unable to finance that unit.
Related terms
- HOA (Homeowners Association)An association governing a community, collecting dues and enforcing rules that can include rental restrictions.
- Homeowners insuranceProperty and liability coverage a lender requires, typically paid a year in advance at closing then escrowed.
- FHA loanA government-insured mortgage designed to widen access to financing, with lower down payment and credit thresholds than most conventional loans.
- Title insuranceA policy protecting against defects in a property’s ownership history, issued after a search of the public record.
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