Home Type Matters for Your Mortgage

When you're buying a home, one of the biggest decisions you'll make is choosing the type of property. Whether it's a single-family home, a condo, or a townhouse, each option comes with its own lifestyle benefits. But what many buyers don't realize is that the type of property you choose can also affect your mortgage.

Lenders look at more than just your credit score and income. They also consider the property itself when deciding what loan programs you qualify for, how much you can borrow, and what additional requirements may apply.

Single-Family Homes

This is the most common property type for homebuyers. Single-family homes usually offer the most flexibility when it comes to financing. Most loan programs, including conventional, FHA, and VA loans, are designed with this type of home in mind. These homes typically do not have shared walls or common spaces, and they don’t come with homeowners association (HOA) fees unless they're in a specific community.

Condos

Condos can be more affordable, especially in urban areas, but they come with added rules. Since condos share walls and amenities with other units, lenders may require the condo project itself to be approved not just the buyer. This means they’ll look at things like the number of owner-occupied units, the financial health of the HOA, and insurance coverage. These extra steps can sometimes limit your loan options or slow down the process.

Townhouses

Townhouses are often a mix between a condo and a single-family home. You might own the structure and the land it sits on, but you could still be part of an HOA that manages exterior maintenance or shared amenities. Because of this, financing a townhouse may fall under similar rules to either a single-family home or a condo, depending on how the property is legally classified.

Why It Matters for Your Loan

Each property type comes with its own set of lending guidelines. Some may have stricter insurance requirements, added fees, or specific appraisal rules. Knowing this upfront can help you avoid surprises during the loan process and choose a property that fits both your lifestyle and your financial plan.

Talk to a Mortgage Professional Early

Before you fall in love with a specific home, it’s smart to talk with a mortgage expert who understands the differences between property types. They can walk you through your options and help you choose the right path based on your goals.