What Is the Difference Between a Condo and a Townhome in Texas?

Condos and townhomes are often confused for the same thing — and they are not. The difference between them matters for how you own the property, what you are responsible for, what your HOA dues cover, and how you finance the purchase. Here is the full breakdown.

What Is a Condo?

A condominium is an individual unit within a larger building or complex where the owner holds title to the interior of their specific unit but shares ownership — through an HOA — of the common areas, exterior structure, roof, hallways, parking areas, and land. In a condo, you typically own from the walls inward. The HOA owns and is responsible for maintaining everything outside those walls, including the building envelope, roof, landscaping, and common amenities. Condo HOA dues are generally higher than townhome or single-family HOA dues because they cover more — including exterior maintenance, building insurance, and amenity operations.

What Is a Townhome?

A townhome is an attached single-family home that shares one or more walls with adjacent units but is owned as a standalone structure, typically including the land directly beneath the unit and sometimes a small private yard. In most Texas townhome configurations, the owner holds title to the full structure — including the roof and exterior — rather than just the interior. HOA dues for townhomes typically cover only shared common areas, landscaping, and community amenities rather than the exterior maintenance and insurance that condo associations cover. The owner is generally responsible for their own roof, exterior maintenance, and individual unit insurance.

How Financing Differs

The ownership structure distinction between condos and townhomes has meaningful implications for financing. Condos require additional underwriting review from lenders because the buyer is purchasing into a shared ownership structure where the financial health of the HOA and the occupancy ratios of the building affect the individual unit's value. Fannie Mae and Freddie Mac have specific condo project approval requirements — including minimum owner-occupancy ratios and HOA reserve fund standards — that must be met before conventional financing can be used. FHA and VA loans have even stricter condo approval requirements. Townhomes are generally financed the same way as single-family homes, with no additional project-level review required.

What to Ask Before Buying Either in Texas

Before purchasing a condo or townhome in Texas, buyers should request and review: the HOA's current financial statements and reserve fund balance; the declaration of covenants, conditions, and restrictions (CC&Rs); the current monthly dues and any pending special assessments; the HOA's master insurance policy and what it covers versus what the unit owner is responsible for insuring; and the occupancy ratio of owner-occupied units versus rentals, which affects financing eligibility. Your agent and lender can help you understand how these factors affect your specific purchase.

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