Condos explained: What they are and what you must know now

I’m going to go out on a limb and predict condos come back in 2027.

Condos, if you don’t know, are a hybrid type of property. I like them because it’s like dipping your toe into the real estate market: You get to buy something, but the onus of property maintenance and some other costs (insurance, landscaping, common areas … think pools and gyms) are shared by a group of owners.

Buy one, and you own your individual unit outright plus an undivided interest in the common areas. The shared ownership has formed many a love-hate relationship over the years — people who have owned or own condos fall into three distinct camps.

I don’t know if any of you play the “Marry, blank, blank” game … but apply it here.

The biggest thing about owning a condo is that the owners pay into a pool of money to pay for the services and amenities the complex provides. But they give up control of the exterior — though, in return, they’re not replacing the roof by themselves.  

The HOA Board, God bless ‘em, is made up of owners in the complex. That board governs through the CC&Rs, the covenants, conditions and restrictions recorded against the project. 

The rules run with the land, which means every owner past, present and future is bound to comply — whether or not they read them. Pets, parking, rentals, paint color: That document touches on them all.  Break the rules, and the fine becomes a lien, and in California, an association can enforce that lien all the way to foreclosure under the Davis-Stirling Act.

The upside is real. Condos are the first step out of apartment living and toward a house, cheaper to buy and cheaper to keep.

The downside starts with control and ends with financing. Fannie Mae and Freddie Mac evaluate the entire project to determine if they’ll lend on it — this means the project is “warrantable,” and they’ll do a conforming loan for the building: read here 3.5 percent down payments for FHA and 5 percent down for conforming. 

They just tightened up the requirements for condo warrantability in September 2026, which I think will make condos more affordable — or in economist speak, “increasing housing supply via market-rate infill development enhances affordability through filtering.”

If you have any questions for me or a topic to recommend, email me.

Question: What is the difference between a condo and a single-family home?

Answer: A condo is a hybrid type of property. You own your individual unit, but you also own or share an interest in the common areas. The roof, exterior, landscaping, hallways, elevators, pools, gyms and other shared spaces are maintained according to the project’s governing documents. 

These are called covenants, conditions and restrictions (CC&R’s), and they are worth a read before buying a condo.

A single-family home usually gives you ownership of the house and the land underneath it. You control more of what happens outside your walls, but you also inherit more responsibility. If the roof leaks, the driveway cracks or the landscaping dies, there is no association pool of money waiting to handle it.

Question: What are CC&R’s?

Answer: CC&Rs are the rules of the community that outline what owners can and cannot do with their property.

Pets, parking, rentals, renovations, paint colors, balconies, noise and holiday decorations can all be covered. The rules are recorded against the property — this means that when you buy a condo you’re agreeing to comply with the rules.

The homeowner’s association (HOA)  is responsible for enforcing those rules and managing the shared property. HOA’s are usually organized as a board made up of other property owners in the complex.

Question: What are assessments?

Answer: There are a couple of types of assessments: regular and special.

The regular monthly assessment pays for ordinary expenses such as landscaping, insurance, management, utilities, pools, elevators and contributions to the reserve fund.

A special assessment is an additional charge for an unexpected or expensive project. Think roofs, balconies, plumbing, elevators, structural repairs, insurance increases or damage from a major event. It is the HOA’s way of saying, “The regular budget is not enough, and the building still needs to be fixed.”

Before buying, read the HOA docs and resale package. In California, the seller is required to provide important association documents, including information about current assessments, approved special assessments and other financial obligations affecting the property within seven days of acceptance of a buyer’s offer.

The CAR residential purchase agreement states the seller must order HOA docs within three days of purchase acceptance and must deliver them within seven days of acceptance, or the buyer can cancel the transaction.

Each week in America Answers, Inman contributor America Foy answers questions from the industry at large and offers advice on how to handle the situation.