Mortgage Daily

Published On: December 19, 2022

If you are worried about your property investment or obtaining a mortgage, different housing types are better than others. Here are the three different categories:

  1. Condominiums, townhomes, or co-ops
  2. Multi-unit houses (triplexes, duplexes, or fourplexes)
  3. Single-family homes (modular homes, PUDs, and manufactured houses)


Different housing types will appreciate at different rates and some are easier to buy than others. This is everything you need to know about different housing types.

Homes and More Homes

There are various types of homes in the United States. Every home is unique- even if some seem exactly the same. This is why we break them down into seven categories:

  1. Single-family residence
  2. Condo/co-op
  3. Townhome
  4. Zero-lot-line home
  5. Planned unit development (PUD) home
  6. Manufactured
  7. Modular/prefabricated
  8. Multi-unit

The above categories all have their own unique characteristics that can make them more or less appealing to the purchaser. Reading on will help you discover the pros and cons of each of the above categories and allow you to identify which style best meets your needs. This will make sure you do not miss out on your dream house.

Mortgage lenders also have different lending policies and requirements for different types of homes.

Single-Family Residence

If you asked a child to draw a picture of a house, this is typically the style they would draw. This is because single-family residences are the most popular type of homes. In 2000, detached residences made up 60% of all single-family homes in the U.S.


  • Plot sizes all vary, but they tend to be bigger- this can come with the ability to expand your house, more privacy, and more room for activities.
  • Single-family residences are considered the American dream- think of the white picket fence houses.
  • The amount of square footage is typically more
  • You usually have “freehold/fee simple,” which means you can do whatever you want with it (providing that your mortgage and the laws allow it).


The best thing about single-family residence is you are granted the freedom to do whatever you want with it. This is great because, over time, the needs of you and your family can change.


  • Because you own the residence, you are solely responsible for all repairs and maintenance. You can still borrow from your mortgage lender if you need additional help.
  • It’s common to find this style in suburban or rural areas and not everyone wants to live that type of lifestyle.
  • Even with a single-family residence, your neighborhood may be a part of a homeowners’ association (HOA). While some find HOA rules to be intrusive, they are generally good for the community.
  • If your HOA gets into financial trouble, you may have to pay the cost of correcting this. Even during a good year, you will have to pay an annual fee.

Condos and Co-ops

A condo- also known as a condominium- is a residential unit that you own, located inside of a larger property that you don’t own. You are considered the legal owner of your unit, but someone else owns the common areas, the structure itself, and the surrounding land.

To find out what will be considered yours or common areas, you need to read your purchase documents closely. On top of distinguishing what is yours and what belongs to the company, this will let you know what is your responsibility.

Unlike condos, you do not own your unit with a co-op. Instead, you and the other residents will own the company that owns the larger property. A board will run the show and what you own and control are usually shares in the company.

With co-op and condos, it’s more about ownership rights than the unit itself. These units can commonly be apartment-style properties, and there are many different styles of dwellings, including detached residences.


  • Many co-ops and condos have extra amenities, like gyms, pools, and sometimes 24-hour door staff/security.
  • It’s someone else’s responsibility to repair, clean, and maintain the common areas- this includes the grounds.
  • The locations are often at a premium, so they are commonly accompanied by a sea view or prime downtown location where single-family residences are expensive.
  • The prices are usually lower than the equivalent single-family residence.
  • Condos and co-ops have a great sense of community and allow you to make friends easily.


While these types of residences seem great, there are some cons.


  • You have to pay for your share of the repairs, cleaning, and maintenance costs- and other amenities that the community has.
  • You can be forced to pay massive unexpected bills if your building’s management is not properly funded.
  • Co-ops and condos can be harder to finance, which makes them harder to sell.
  • Some buildings can have problems with messy, noisy, and horrible neighbors making it hard to live there.
  • You will be living in close proximity to a lot of other people and you might not like all of them.


Many people choose to buy a condo or co-op because it’s a lifestyle choice and they like that they don’t have to keep up with yard work and maintenance. Because of the pros listed above, these residences are often appealing to the elderly, the ultra-busy, and people who don’t spend a lot of time at home. The extra amenities and prime locations can make them even more appealing to others.

The close proximity to immediate neighbors may be enough to sway some people.


A townhome may also be called a townhouse, or a terraced house. These are typically two stories high, with some being taller, and one noticeable characteristic is that they share at least one wall with a neighboring property.

You will likely share a wall with two neighbors living in a townhouse. The townhouse at the end of the row only shares one wall.

The word “townhome” is an architectural term that tells a lot about how the structure was built. This does not define the ownership model. You may own outright (fee simple/ freehold) or be a part of a condo or co-op development.


  • They come with extra on-site amenities when part of a co-op or condo, such as pools, gyms, or clubhouses.
  • They are often built where land is at a premium. You can expect their location to be close to downtown, have waterfront views and access, or adjoining a golf course.
  • Many townhomes are a part of a development within an HOA. This is good if you dislike doing repairs and yard work.
  • It’s common for them to provide you with your own backyard. The yard you have may be smaller and less private than a single-family residence.

A townhome will possibly give you more privacy and space than an apartment-style condo while still offering many of the same advantages.


  • You will have to share a “party wall” with at least one neighbor, sometimes two. So, if you get a noisy neighbor, this may be a problem.
  • The only access to your backyard will be through your house unless the property has a gate or an alley to the back.
  • If the property has an HOA, you will have to pay their fees and look into the HOA’s financial health.
  • This isn’t always the cheaper option. In some prime areas like Manhattan, a townhome can go for well over $10.

Much like condos, a townhouse comes with the possibility of troubling neighbors.

Zero-Lot-Line Homes

Zero-lot-line homes are different types of single-family residences. They are closely related to townhomes and can typically be located in areas with HOAs. Zero-lot-line can share characteristics with all of those.

Zero-lot-line refers to the fact that they typically share a wall with the home next to it. It’s common for there to be almost no room between the two residences. These are very similar to the structure of a townhome.

You are more likely to find these styles in high-density areas. They will often come with either no yards or very small yards. This can be great for people who dislike yard work, while people who like to be outside might not like this.

It’s hard to come up with a list of pros and cons because there are a variety of possible configurations. Depending on how the zero-lot-line home is set up, and its ownership model, almost all of the pros and cons for the above-mentioned homes could apply.

Planned Unit Development (PUD) Homes

PUD homes are built within a planned development. It is common for the development to include a combination of different housing types, and sometimes business premises. You may find apartment-style condos, single-family residences, zero-lot-line homes, and townhomes all within the same PUD.

PUD homes can also come with numerous high-end amenities. These will vary depending on the development, but usually include tennis courts, pools, parks, 24-hour security, and hiking trails. Gated communities are often PUDs.


  • Large selection of home types.
  • You can find bars, restaurants, shopping, and medical facilities inside larger PUDs.
  • They have attractive amenities.
  • The HOA or condo management will maintain communal facilities and spaces.

PUDs are a lifestyle choice that offers convenience and awesome amenities that create a real “community” feel.


  • Because of the HOA/condo fees, it will not be cheap.
  • You have to pay for the upkeeping of amenities, even if you never use them.
  • Some may feel that communal costs and HOA rules are oppressive.
  • Your mortgage lender will want to know if you are buying a PUD home.

Before you buy, you have to realize that a PUD home is not just a home, it is a lifestyle that will also cost you extra.

Manufactured Homes

Manufactured homes are a part of a group that includes trailers and mobile homes. Unlike trailers and mobile homes, manufactured homes can count as real estate and can be mortgageable.

To qualify as real estate, the manufactured home must be anchored to its site with approved foundations that have been built after 1976. In addition, it must also have red tags from the U.S. Department of Housing and Urban Development (HUD), this will certify that it meets certain construction and safety standards.


  • Manufactured homes typically are the least expensive to buy.
  • There are modern manufactured parks that are well maintained, tidy, and instill and sense of community.
  • The way these homes are built today are built to be comfortable and spacious.

If you are looking to downsize or looking for something for your retirement, manufactured homes can be a great choice. You can put a manufactured house on leased land or land you own.


  • Unlike most home values appreciating over time, manufactured houses will generally depreciate.
  • There is sometimes a stigma associated with this type of housing.
  • Some park owners can be exploitative, so you need to carefully choose your location.

Shop around for your best mortgage deal. Always look at your options first and never let someone talk you into the park’s finance package without shopping around.

Modular/Prefabricated Homes

While a manufactured and modular/prefabricated home can confuse many people, they are entirely different.

Both modular and prefabricated homes are fabricated in factories and then delivered to the desired site. A manufactured home arrives completed.

A modular home would be delivered to the site in pieces (modules) and then a home builder would construct it. You can use these modules to make anything from a tiny house to a mansion. Each module is drawn up by an architect and fully custom-made in a specialist factory.


  • A mortgage lender would look at a modular home just like they would a traditional single-family residence, so it is just as easy to get a mortgage.
  • It will cost 10-20% less than the traditional single-family residence to construct.
  • Because they are built in a factory, this can improve the quality of their craftsmanship.
  • They can be more energy-efficient than other types of houses.
  • You can have an easier time designing your home and even order one on Amazon.

Many consider modular homes the way of the future because of all the pros.


  • Some home buyers may be wary of modular homes. Even though, home inspectors, real estate agents, and mortgage lenders recognize them to be equal to that of a traditional home.
  • The site of your home has to be prepared properly and a large crane needs to be able to access it.
  • A delay in delivery can occur if there are any accidents during transportation.
  • Some additional work may be needed for your lender to finance the construction stages since these are different from the traditional “stick” builders.

It can take a while for the future to catch up with the popularity of modular homes.

Multi-Unit Homes

If you are looking for two to four units on one property, a multi-unit home is great. They can come completely detached while others can share walls.


  • You can live in one unit and collect rental income from the rest.
  • Great if you love personal space but need a multi-generational home for your family to live together.
  • Certain lends will let you finance multi-unit homes as primary homes, as long as you live in one unit.
  • Many loan programs, like FHA, will allow you to finance a higher amount with a multi-unit property.


  • You might not want to be a landlord and you might not like your tenants.
  • Depending on the lender and program, it can be more difficult to qualify for a home loan.
  • There are higher fees associated with financing two-to-four-unit homes.
  • Multi-unit homes don’t appreciate quickly like single-family homes.

Different Types of Homes

Don’t let all of the options with housing types overwhelm you. The perfect house will find you.

You should factor in your lifestyle, personal needs, and finances when deciding between a PUD, manufactured or modular home, condo/co-op, townhome, zero-lot-line, and single-family residence.

Picking the type of home that you would like is the first step in finding the home of your dreams.

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