Condos and Townhomes in 2025: Small Footprint, Big Investment Potential
- David Marsh
- Jun 13
- 2 min read
Once upon a time, condos and townhomes were dismissed as “starter homes” or “retirement pads.” But in 2025? They’re the goldilocks zone of real estate — not too big, not too pricey, just right. And for buyers, investors, and even downsizing boomers, they’re a smart play in a tight market.
Whether you’re buying your first place, scaling your rental empire, or snagging a vacation unit in Temecula, Grand Funding has the loan options (and personality) to make it happen.
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Why Condos and Townhomes Are Trending in 2025
• Affordability: You get location and style without the McMansion price tag
• HOAs (finally) doing something right: More modern developments = better amenities and maintenance
• Remote work + urban exodus = hybrid living — think: low maintenance + high walkability
• Fewer repairs, faster turnaround: For investors, condos mean less maintenance and faster tenant turnover
In short? Less is more — and the ROI on these compact castles can be mighty.
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Types of Loans for Condos and Townhomes
🏘️ Conventional Loans: Your most common option, with 3–20% down depending on use (owner-occupied vs. investment)
📈 DSCR Loans: Perfect for investors buying condos as rentals — based on income, not your W-2s
💰 FHA Loans: Available if the condo is in an FHA-approved complex — 3.5% down
🛠️ Renovation Loans: For that “fixer-upper with character” in a great HOA
We’ll help you pick the right fit based on your strategy: live, rent, flip, or hold.
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What Lenders Look For in 2025 (Spoiler: It’s Not Just You)
When buying a condo or townhome, you’re buying into a community — and lenders care about that. Here’s what they’re digging into:
• HOA financials: They want to know the HOA isn’t one plumbing emergency away from bankruptcy
• Occupancy ratio: Too many renters? Some lenders say nope
• Litigation flags: If the complex is being sued? Yeah… not ideal
With Grand Funding, we help pre-screen buildings and avoid deals that’ll give your underwriter a panic attack.
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For Investors: Condos Still Cash Flow
Especially in cities like Phoenix, San Diego, and Riverside — where single-family prices are wild, but rents are strong. Condos often offer:
• Lower price per door
• Predictable expenses (thanks HOA!)
• Strong rental demand among young professionals and retirees
Throw in the fact that many new developments now allow Airbnb and short-term rentals? It’s a no-brainer.
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Bonus Tip: If the condo complex isn’t FHA-approved, we’ll help you find a workaround — portfolio lenders or DSCR options are opening doors (pun intended) in ways they weren’t five years ago.
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