Property Type Affects Pricing; Condos Look Like PUD/Townhouse

Property types affect pricing and financing – Condo/PUD Distinction: Condos and PUDs (Planned Unit Developments) can look identical but have different zoning and different pricing and financing options.

Attached side-by-side two-story units that all touch the ground can be zoned “CONDO” or “PUD.” Complexes with units that float (that do not touch the ground) will almost always be zoned Condo (PUDs must touch the ground). People often call PUDs “townhomes,” but “townhome” is just a style. With PUDs, the owner owns the lot or ground underneath the unit. With Condos, the owner owns an equal and undivided interest in the entire condo project’s lot (and common areas).

The way to know the actual zoning is to look at the legal description; a PUD will have a separate lot # and/or a small lot size under it, i.e. 2,200 square feet. A Condo will have the same lot # as all the other Condos, or NO lot # at all, and/or a huge lot size (such as “11 acres”) under it.

This matters b/c Condo financing (vs. PUD financing) typically has higher interest rates, and Condos are not eligible for FHA financing unless the entire complex is FHA approved. Attached PUDs are eligible for FHA financing.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646