Below is the description of house categories in physical/visual terms for ease of understanding. Please be advised that house categories in legal terms can be different with the same exact identifier (such as Single House), which will be explained later.
- Condo – Owner owns a unit of a building. Single condo unit do not occupy a whole building or whole vertical space. This means that a neighbor can live above or below a condo unit. The owner has ownership of the unit. Most condos (if not all) do not own the land it occupies; homeowner association (HOA) does.
- Townhouse – Owner owns a unit of a building that occupies the entire vertical space. This means that there are no neighbors below or above a townhouse unit and walls are shared with horizontal neighbors. Usually more expensive than condos (because condos can have a neighbor below or above a unit). Most townhouses (if not all) do not own the land it occupies; home association (HOA) does.
- Single house – Owner owns an entire building. The single house can be a part of home association and the single house can be legally categorized as a condo.
- Duplex: Special type of single house/townhouse. Two units, divided horizontally, occupy one building.
In legal terms, houses are not categorized as how they appear and rather the legal document dictates the category. Here are some legal terms you will encounter while reading a property details:
- Condominiums – All condominiums have some type of CC&Rs (Covenants, Conditions & Restrictions) – means that home association exists and controls common areas and rules. (more details)
- Co-op – Special type of Condo prevalent in east coast. Instead of having individuals own a piece of building, the home association owns entire complex/buildings and individuals own ownership shares of the home association and are assigned home unit(s).
- Fee Simple – Owner owns the land and anything on the land that occupies your unit. The opposite of Fee simple is Leasehold Ownership, which usually mean the HOA owns the land.
- Single house – Houses that share no walls with other unit can be categorized (but not always) as a single house in legal terms. Most duplex houses are categorized as a single house in legal terms. Most single houses are Fee Simple. (I haven’t seen any Single House in legal terms that wasn’t Fee Simple but I haven’t read anything official that says Single House must be a Fee Simple)
Most important aspect of legal category terms is whether a house is legally categorized as single house or not. This matters because it will dictate the mortgage loan APR for the property. To obtain the best mortgage rates, a buyer will be asked at least 20% down payment for a single house (in legal terms) and at least 25% for a non-single house. 20% – 25% down payment on a non-single house will result in mortgage APR by ~0.25% higher compared to ones from best rates. This is due to Fannie Mae and Freddie Mac (the mother of all mortgage companies) categorizing non single houses as riskier mortgage item. (Most mortgages are backed up by two standard companies Fannie Mae and Freddie Mac and they dictate most rules.)
Physically/visually looking single house or duplex can either be legally categorized as a single house. Condos, Townhouse, and Co-ops are all non-single houses. Any house without a HOA is legally categorized as a single house. Yet any house with HOA might or might not be legally categorized as a single house.
It is not always easy to obtain the legal category of a property and some websites can be misleading. I find trulia.com to be most accurate in terms of legal category of a property.
Below is a screenshot of property details of a single house, in legal terms:
**On the image: Public Records -> Single Family (Residential) **
Below is a screenshot of property details of a legally non single house:
** On the image: Public Records -> Condominium (Residential) **