TIC Financing in California | Loan Options and Requirements

 

Why TIC Financing Is Different

If you’re looking to buy a Tenancy in Common (TIC) in San Francisco or Los Angeles, you’ve probably realized that standard mortgages don’t apply. Unlike condos or single-family homes, TICs require specialized loan programs because of their unique ownership structure.

Historically, TIC buyers faced:

• High down payment requirements (25–30%)
• Limited lender availability
• Strict underwriting standards

But things have changed. Today, new TIC loan programs allow as little as 15% down with loan amounts up to $2 million, making TICs much more accessible to buyers and investors.

For a broader overview of how TIC loans fit into the market, check out our guide to TIC loans in San Francisco and Los Angeles.

 

TIC Loan Options Available Today

Here are the most common financing options for TIC buyers in California:

• Owner-Occupied TIC Loans
  • Down payments as low as 15%
  • Loan amounts up to $2 million
  • Minimum FICO: 660–700 (depending on LTV)
• Investment TIC Loans (Non-Owner-Occupied)
  • Typically 20–25% down required
  • Loan amounts up to $2 million
  • Rental income may be used for qualification, depending on the lender
  • Learn more in our guide to buying TICs as investment properties.
• Self-Employed TIC Loans
  • Qualify using 12–24 months of bank statements instead of tax returns
  • Both personal and business bank statements may be accepted
  • Great for freelancers, business owners, and gig workers

 

Who Can Benefit from TIC Financing?

First-Time Buyers

• Take advantage of 15% down programs to buy in high-cost areas.
• Access prime San Francisco and Los Angeles neighborhoods where condos may be out of reach.
• Curious about TIC ownership basics? Start with our What Is a TIC? guide.

Self-Employed Borrowers

• Qualify with bank statements instead of tax returns.
• Ideal for buyers with fluctuating income or heavy business write-offs.

Investors

• Purchase TIC units as rental properties with down payments starting around 20–25%.
• Benefit from strong rental demand in central neighborhoods.
• See our in-depth blog on TICs as investment properties for strategies and risks.

Co-Buyers

• Friends, couples, or families can purchase TICs together.
• Programs often allow flexibility with mixed credit profiles and documentation.

 

Documentation & Income Requirements

• W-2 Employees: Provide recent W-2s and pay stubs.
• Self-Employed: Use 12–24 months of bank statements in place of tax returns.
• Investors: Some lenders may allow projected rental income to help with qualification.

 

TIC Financing Example

Scenario: Purchasing a TIC unit in San Francisco for $1,000,000

Item	Amount	Notes
Purchase Price	$1,000,000
Down Payment (15%)	$150,000
Loan Amount	$850,000
Monthly Loan Payment	$5,655	Based on 7.000% interest rate (7.250% APR), 30-year fixed
Shared Expenses (taxes, insurance, maintenance)	$1,000	Estimated monthly
Total Monthly Cost	$6,655	Before HOA-like shared expenses

This example is for illustrative purposes only. Actual rates, APRs, expenses, and qualification requirements will vary. Always consult a mortgage professional to review accurate numbers for your situation.

 

Steps to Get a TIC Loan

Financing a TIC is different from a regular mortgage, but the process is straightforward if you work with the right lender. Here’s a checklist:

1. Get Preapproved with a TIC-Experienced Lender
   • Not all lenders offer TIC loans, so start with one who does.
   • A pre-approval letter shows sellers you’re serious and qualified.
2. Review the TIC Agreement
   • Confirm that the agreement allows your intended use (primary residence, investment, or co-ownership).
   • Lenders will also review this document during underwriting.
3. Gather Your Documentation
   • W-2 borrowers: pay stubs, W-2s, and tax returns.
   • Self-employed borrowers: 12–24 months of bank statements.
   • Investors: rental history and/or projected income may be requested.
4. Submit Your Loan Application
   • Provide your documentation, credit information, and property details.
   • Expect slightly different underwriting standards than a condo or single-family home.
5. Appraisal and Underwriting
   • The property will be appraised, and your lender will underwrite both your finances and the TIC agreement.
6. Loan Approval and Closing
   • Once approved, you’ll sign closing documents and officially secure your financing.
   • Congratulations, you now own a share of the building with exclusive rights to your unit!

 

Pros and Cons of TIC Financing

Pros:

• Lower down payment (as little as 15%)
• Access to high-cost markets like SF & LA
• Options for self-employed borrowers
• Investor financing now available

Cons:

• Fewer lenders compared to condos
• Interest rates may be slightly higher than standard mortgages
• TIC agreements can affect refinancing or renting

 

FAQs About TIC Financing in California

1. What’s the minimum down payment for a TIC loan? As little as 15% down for owner-occupied TICs. Investors usually need 20–25%.
2. Can self-employed buyers qualify for TIC financing? Yes. Many lenders allow self-employed buyers to qualify with 12–24 months of bank statements instead of tax returns.
3. What’s the maximum loan size for a TIC property? Up to $2 million, which is ideal for higher-cost markets like San Francisco and Los Angeles.
4. Can I use rental income to qualify for a TIC investment loan? Sometimes. Some programs allow projected rental income for qualification, but it depends on the lender.
5. Are TIC loan rates higher than regular mortgages? Typically, yes but the difference is often small compared to the benefit of accessing a TIC property with a lower down payment.

 

Final Thoughts: Financing Your TIC Purchase

TIC financing has come a long way in California. With options for 15% down, loan amounts up to $2 million, and programs for both self-employed buyers and investors, TICs are now more attainable than ever.

Standard Disclaimer

All examples, rates, and figures provided in this article are for illustrative purposes only and may not reflect current market conditions. Actual interest rates, APRs, loan terms, property expenses, and rental income will vary depending on the borrower’s qualifications and the specific property. This content is not a commitment to lend. Always consult with a licensed mortgage professional to receive personalized, accurate numbers and guidance for your situation.