TIC Home Loans Explained: California's Most Misunderstood Financing
TIC Home Loans Explained: California's Most Misunderstood Financing
Last reviewed: September 2026
Tenancy-in-Common financing is one of the most misunderstood mortgage products in California real estate — and one of the most useful, if you actually understand how it works.
What Makes TIC Different From a Condo
A condo purchase gives you individually recorded ownership of your unit, governed by a large HOA. A TIC is co-ownership of an entire small building — the agreement between owners spells out who has exclusive rights to which unit, and each owner typically carries their own separate loan tied to their fractional share.
Why Buyers, Sellers, and Agents All Need to Understand This
For buyers, the appeal is usually price — TIC units commonly sell for 10-15% less than a comparable condo in the same building or neighborhood. For sellers and listing agents, TIC can be the difference between a property sitting on the market and moving, especially in San Francisco and Los Angeles where fractional ownership is more established and buyers know what they're looking at.
The financing side is where most transactions actually get stuck — not because TIC loans are inherently harder to underwrite, but because most lenders simply don't offer them. A conventional underwriter unfamiliar with fractional ownership will often flag the file rather than process it correctly.
What a Realtor Should Know Before Listing or Showing a TIC
If you're representing a buyer or seller on a TIC property, the two questions worth asking upfront are: does the lender actually close TIC loans regularly, and can they explain the appraisal process (which values both the whole building and the individual fractional share) clearly enough that your client isn't surprised mid-transaction.
Buying, selling, or listing a TIC property in San Francisco or Los Angeles? We work with TIC-savvy listing teams in both markets and close these regularly.
Mike Belfor, Branch Manager and Mortgage Loan Originator, American Pacific Mortgage, NMLS #264700.
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