By Marilyn Kennedy Melia
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When it comes to the roof over their heads, most people want the same thing: A house of their own.
“Surveys clearly indicate a preference among all age groups for homeownership, and homeownership in single-family homes,” says Robert Dietz, chief economist at the National Association of Home Builders.
But lots of people also need an affordable price tag to be able to buy.
Enter the townhouse. These attached single-family homes account for about 12 percent of all new single-family construction starts, according to the NAHB. The share is expected to rise.
When zoning prohibits a single-family detached home from being constructed on a small lot, townhomes, which average about 12 percent less per square foot, are prevalent, says Tracy Cross of consulting firm Tracy Cross & Associates, Schaumburg, Illinois.
Condominiums are often confused with townhouses, notes Rick Palandri of Academy Mortgage, Bloomingdale, Illinois.
Condos are a form of ownership. “A condominium owner owns from the walls in,” says Palandri, “and the condo association owns everything outside the walls.” A townhouse is a structure with units connected on one or both sides. It might or might not be a condo. “Some townhome owners own the outside and even the lot,” says Palandri.
Mortgage approval is more rigorous for the purchase of a condominium townhouse. The lender scrutinizes the association for financial strength and the building for structural soundness.
Lenders will add any homeowner’s association fee when calculating the monthly debt load of a mortgage applicant, but otherwise financing is similar to that of a single-family home.
Home inspections on a townhome may uncover special issues, however. For example, shared roofs and attic spaces may not have the proper fire barrier, says Randy Sipe, president of the American Society of Home Inspectors. “If the owners are responsible for the roof, it doesn’t do much good to replace one side.”
When needed repairs involve a neighboring unit, it may be necessary to work with the adjoining unit owner to solve the issue.
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