Thinking about a TIC in the Mission District but not sure how it really works? You’re not alone. TICs can offer a smart path into the Inner Mission at a lower entry price, yet the structure, financing, and resale dynamics differ from condos in important ways. In this guide, you’ll learn what TIC ownership means, how loans work, what to expect at resale, and a practical due diligence checklist tailored to San Francisco. Let’s dive in.
What a TIC is, plainly explained
A tenancy in common, or TIC, is shared ownership where you hold an undivided fractional interest in the whole property. Your deed shows your percentage of ownership, and your right to live in a specific unit is set out in the recorded TIC agreement. You do not own a separate parcel in the way a condo owner does.
In San Francisco, many multi-unit buildings were never converted to condominiums. TICs became a common structure that allowed buyers to live in distinct units while sharing ownership of the building. Your rights, responsibilities, and day-to-day rules are defined by the TIC agreement, not by a condominium plan.
TIC vs condo vs co-op
- Title: TIC is a fractional deeded share in the whole property. Condo is individual airspace ownership plus an HOA. Co-op is ownership of shares in a corporation, not real estate title to a unit.
- Governance: Condos have statutory frameworks and recorded condo plans. TICs rely on a contractual TIC agreement among owners. Protections flow from that agreement and recorded documents.
- Financing: TIC loans are more limited and often carry stricter terms than condo loans.
- Conversion: Some TICs can convert to condos, but in San Francisco it can be challenging and costly, and is subject to city rules and tenant protections.
Financing a TIC in the Mission District
TIC financing is a specialty niche. You will see fewer lender options compared with condos. The most common sources are portfolio or specialty lenders and some local community banks or credit unions that understand San Francisco TICs. Government-backed options like FHA and VA are rare and have strict eligibility requirements.
Expect higher down payment requirements than for many condo purchases. Many TIC lenders look for 20 to 30 percent down from owner-occupants, stronger debt-to-income ratios, and reserves for ongoing assessments or unexpected repairs. Rates can be modestly higher and fees can be higher due to added underwriting work. Availability can also tighten when credit markets are conservative.
A key nuance is the TIC agreement. Lenders will review provisions like cross-default and cross-collateral clauses because one owner’s default can affect the entire property. You should be clear on whether your financing is truly at the unit level and how other owners’ obligations intersect with yours.
Your financing checklist
- Prequalify with at least one lender experienced with San Francisco TICs before you write an offer.
- Ask for TIC-specific pre-approval conditions, including down payment, reserves, and exact document requirements.
- Confirm whether your lender requires all owners to be co-borrowers or will finance your interest individually.
- Share the recorded TIC agreement, budget, reserve position, insurance details, assessment history, and a preliminary title report early in the process.
Resale and market reality in the Inner Mission
The Inner Mission is a high-demand micro-market with strong competition for well-located homes. TICs, however, serve a narrower buyer pool than condos because financing is more specialized and some buyers prefer conventional structures. That narrower pool can affect both time on market and pricing.
Appraisals can be trickier as well. Appraisers have fewer direct TIC comparables, so they may rely on other TIC sales or make adjustments from condo comps. That adds valuation risk, which in turn can affect lender approval. When it is time to sell, plan for a potentially longer timeline than a comparable condo and price with liquidity in mind.
About condo conversion
Some Mission District TICs can qualify for condo conversion, but you should not rely on this as a short-term strategy. San Francisco’s conversion rules, tenant protections, and owner-consent thresholds can make the path complex and costly. Treat conversion as a potential long-term benefit only if the building and rules align, and verify with local counsel before you assume any outcome.
Due diligence checklist for Mission District TICs
Go beyond the unit. Your ownership connects to the whole building, so your review should be thorough.
Legal and title
- Recorded TIC agreement and any amendments, including occupancy rights and voting rules.
- Your deed and vesting language for the fractional interest.
- Preliminary title report for liens, mortgages, easements, or restrictions affecting the property.
Financial health
- Current operating budget and any reserve study or pro forma.
- Assessment history, planned special assessments, and any past-due balances.
- Expense allocation method and whether all owners are current.
Building condition
- Full property inspection covering structure, roof, plumbing, electrical, and utilities.
- Status of any required seismic or soft-story retrofits and evidence of completed work.
- Permit history, code compliance, and any open violations.
- Master insurance policy details and adequacy of replacement and liability coverage.
Governance and rules
- Subletting and short-term rental provisions.
- Pet policies and unit modification rules.
- Buyout, right of first refusal, sale approval requirements, and dispute resolution.
- Default remedies and cross-default language.
Tenant and rent-control context
- Tenant status for each unit and whether rent control or eviction protections apply.
- Any relocation or buyout obligations tied to conversion or future changes in occupancy.
Lender-specific items
- Lender acceptance of the recorded TIC structure and documents.
- Any cross-collateral provisions in existing loans on the property.
Escrow protections
- Financing contingency with a named TIC-experienced lender.
- Document review contingency to allow legal counsel time to evaluate the TIC agreement.
- Inspection contingency with scope for seismic and structural review.
- Clear title and budget review contingencies.
Estimating the true cost of ownership
Build a complete monthly and annual picture before you commit.
- Mortgage payment based on TIC loan pricing.
- Pro rata share of operating expenses and assessments.
- Your portion of property taxes and potential reassessment.
- Insurance needs beyond the master policy for contents and liability.
- A realistic allocation for reserves and possible special assessments.
When a TIC can be a smart fit
You value location and design and are comfortable with a well-documented agreement that sets clear rules. You are prepared for a larger down payment and want a lower entry price than a comparable condo. You are willing to do deeper due diligence on the building’s budget, condition, and governance to secure a home you love in the Inner Mission.
How your agent protects you in a Mission TIC
A strong agent does more than write offers. For TICs, the right guidance protects your time and money.
Before you offer
- Connect you with TIC-savvy lenders and help you obtain conditional pre-approval based on the building’s documents.
- Set realistic down payment and reserve expectations.
- Identify relevant TIC comparable sales to align pricing with market conditions.
Contract and negotiation
- Structure contingencies that address TIC-specific risks, including lender approval, legal document review, and seismic inspections.
- Negotiate seller disclosures and credits for unresolved building issues, retrofits, or unpaid assessments.
Due diligence management
- Coordinate delivery and review of the TIC agreement, title, budget, and insurance.
- Engage inspectors with multi-unit San Francisco experience, including structural and seismic specialists when needed.
- Facilitate attorney review focused on cross-default provisions, foreclosure processes, buy-sell terms, and any conversion language.
During escrow and after closing
- Satisfy lender document conditions and verify acceptance of the TIC structure.
- Confirm payoff and clearance of encumbrances that could impact title.
- Clarify how taxes and future assessments will be allocated among owners.
- After closing, help you align your individual insurance with the master policy and understand payment procedures and governance processes.
Next steps
If a Mission District TIC is on your radar, start with lender prequalification and a careful review of a building’s TIC agreement and financials. With the right plan, you can secure a beautiful home in a sought-after neighborhood while navigating the structure with confidence.
For calm, design-forward guidance from a local expert who understands TIC mechanics, Inner Mission micro-trends, and building-level details, connect with Adelaida Mejia. Together, you can move from curiosity to clarity to keys in hand.
FAQs
What is the main difference between a TIC and a condo in San Francisco?
- A TIC gives you a fractional deeded interest in the entire property with a right to occupy a specific unit defined by a TIC agreement, while a condo gives you individual ownership of an airspace unit plus an HOA.
How do TIC mortgages differ from standard condo loans?
- TIC loans come from a smaller group of lenders, often require 20 to 30 percent down, can have slightly higher rates and fees, and involve stricter review of building documents and default provisions.
Will a TIC be harder to resell in the Mission District?
- Usually yes. The buyer pool is smaller and financing is more limited, which can mean longer time on market and greater appraisal risk compared with similar condos.
Can my Mission District TIC convert to a condo later?
- Possibly, but it depends on San Francisco rules, owner consent, and tenant protections. Treat it as a long-term possibility only if the building and regulations align, not a near-term plan.
What happens if another TIC owner stops paying assessments?
- Many TIC agreements include cross-default or collection procedures. A single owner’s default can create financial stress for others, so you must review the agreement’s default remedies carefully before buying.
