Condo vs. Co‑op in DC: What Buyers Should Know

Thinking about buying an apartment in DC but not sure whether a condo or a co-op fits you best? You are not alone. These two options look similar when you tour, yet they work very differently once you own. In this guide, you will learn the key differences in ownership, monthly costs, financing, rules, and resale, plus a DC-specific checklist to help you make a confident choice. Let’s dive in.

Condo vs co-op basics

What you own

• Condo: You receive a deed to your unit plus a shared interest in common areas. You are responsible for your unit and pay association fees for building expenses.
• Co-op: A corporation owns the building. You buy shares in that corporation and receive a proprietary lease to occupy a specific apartment.

This difference affects your closing documents, how you finance the purchase, and how taxes are reported. For a high-level overview, review resources from NAR and HUD.

How transfers work

• Condo sales transfer by deed and record in land records.
• Co-op sales transfer your share certificate and proprietary lease, and the co-op updates its shareholder records.

DC market context

Both forms exist across Washington, DC. You will often see co-ops in older or pre-war buildings and condos in many newer developments. For building registrations or permits, you can explore DC Department of Buildings resources via the former DCRA portal at dcra.dc.gov.

Monthly costs and taxes

What monthly fees cover

• Condo HOA fees typically include common area care, building insurance for shared elements, management, reserves, and sometimes utilities. You usually carry an HO-6 policy for the interior.
• Co-op maintenance often covers more items in one payment, such as the building’s property taxes, any underlying co-op mortgage, building insurance, staff, utilities, and reserves. Co-op fees can look higher because they include costs a condo owner pays separately.

Taxes and deductions

• Condo owners are billed property tax at the unit level. Mortgage interest and property taxes may be deductible if you itemize, subject to IRS rules.
• Co-op shareholders usually receive documentation from the co-op that shows their share of building property taxes and any mortgage interest that may be deductible.

Tax rules can be nuanced. Review current IRS guidance at irs.gov and consult a tax professional about your situation. For local billing and assessments, see the DC Office of Tax and Revenue at otr.cfo.dc.gov.

Reserves and assessments

Both condos and co-ops should maintain healthy reserve funds for future capital work. Low reserves or frequent special assessments are red flags. Ask for the reserve study and current reserve balance during your review.

Financing in DC

Condos and loan options

• Conventional financing is common for many condo projects that meet investor eligibility rules.
• FHA and VA loans require project approval. Checking a building’s approval status early helps you focus your search. You can review program resources on HUD’s site.

Co-ops and loan options

• Co-ops are financed with share or stock loans. These are often portfolio loans held by the bank.
• Lenders may require higher down payments, strong reserves, and a thorough review of the co-op’s financials, including any underlying mortgage and owner-occupancy ratios.
• FHA and VA financing for co-ops is limited and handled case by case.

In DC, buyers needing FHA or VA financing usually have more choices in condos than co-ops. If you are considering a co-op, work with a lender experienced in co-op underwriting.

Marketability and resale

• Condos typically draw a broader buyer pool, including FHA and VA buyers and some investors, which can help with resale.
• Co-ops may have board approvals, sublet restrictions, and other policies that narrow the buyer pool. Co-ops can still offer attractive prices in sought-after locations if you are comfortable with governance rules.

Rules, boards, and approvals

Board approval and interviews

• Co-ops generally require a full application, financial review, references, and an interview. Boards can approve or deny under their rules, subject to fair housing laws.
• Condos usually have limited vetting. Associations may require registration or basic applications but typically cannot reject buyers without a clear contractual reason.

Lifestyle rules to review

• Subletting: Co-ops often restrict subletting, while condos are usually more flexible, sometimes with caps.
• Renovations: Both forms have approval processes. Co-op boards can be stricter on in-unit alterations and contractor rules.
• Pets, smoking, and short-term rentals: Policies vary by building. Short-term rentals are frequently restricted in both types.

Fair housing in DC

Boards and managers must follow federal and DC fair housing laws. If you are concerned about governance or enforcement, you can ask for meeting minutes, house rules, and any litigation history during diligence. Learn more from HUD’s Fair Housing resources.

How to choose in DC

Start with your big picture, then test the details.

• Financing needs: If you rely on FHA or VA, an approved condo community will likely give you more options.
• Long-term plans: If you want the option to rent in the future, verify rental or sublet policies upfront. Condos are often more flexible.
• Board oversight: If interviews and tighter renovation rules concern you, a condo may fit better. If you value a more controlled building culture, a co-op could appeal.
• Budget: Compare the total cost of ownership. Add mortgage, monthly fees, taxes, insurance, and typical utilities for each building.
• Building style and feel: Many new or waterfront developments are condos. Older walk-ups and boutique pre-war buildings are more often co-ops.

DC buyer due diligence checklist

Review these items before you make an offer or during your contract review period.

For both condos and co-ops

• Governing documents: Bylaws, declaration or proprietary lease, and house rules.
• Financials: Current budget, recent income and expense statements, balance sheet, and reserve study.
• Meeting minutes: Board minutes for the last 12 to 24 months to spot planned projects or recurring issues.
• Insurance: Master policy details and what you must insure personally.
• Litigation: Any pending or threatened litigation.
• Assessments: History of special assessments and any planned charges.
• Management: Management company name and contract terms.
• Capital projects: Planned improvements and how they will be funded.
• Pet, rental, and renovation policies.

Additional for condos

• Unit deed and any exclusive-use areas.
• FHA or VA approval status if you will use those loans.
• Project data such as owner-occupancy and investor ratios.

Additional for co-ops

• Offering plan, share certificate, and proprietary lease.

• Details on any underlying mortgage and balance outstanding.

• Sublet policy and shareholder occupancy requirements.

• Board application requirements, approval timeline, and interview expectations.

• Transfer process, including any fees or right of first refusal.

• Annual statements used for tax reporting of your share of taxes and interest.

Financing steps

• For condos: Ask your lender about project warrantability and whether any building issues could affect approval.
• For co-ops: Use a lender with co-op experience who will review the co-op’s financials and policies.

Where to find reliable information in DC

• Listing agent or MLS: Often provides core documents or a path to request them.
• Management company: Frequently supplies budgets, minutes, insurance certificates, and questionnaires.
• Local attorney or knowledgeable real estate agent: Especially helpful for co-op proprietary leases and complex condo documents.
• Government and investor resources: Review FHA and project guidance from HUD and investor eligibility tools from Fannie Mae. For building records and permits, check the Department of Buildings via dcra.dc.gov. For tax questions, visit DC Office of Tax and Revenue.

Next steps

Choosing between a condo and a co-op in DC comes down to how you plan to live, how you plan to finance, and how much structure you want from your building. If you weigh total monthly costs, loan options, board rules, and the building’s long-term health, you will land on the right fit. When you are ready to compare specific communities or review documents, connect with ONE Residential for clear guidance and a streamlined search.

FAQs

What is the core difference between a condo and a co-op?

• A condo gives you a deed to your unit, while a co-op gives you shares in a corporation plus a proprietary lease to live in a unit.

Are co-op maintenance fees in DC tax deductible?

• Parts of your co-op payment may be deductible if they represent your share of property taxes or mortgage interest, per IRS guidance; ask a tax professional.

Can you use FHA or VA loans for DC co-ops or condos?

• FHA and VA loans are widely used in approved condo projects, while availability for co-ops is limited and handled case by case; check HUD resources.

Why do co-op fees look higher than condo fees?

• Co-op fees often include building taxes, insurance, staff, utilities, and any underlying mortgage, while condo owners pay some of those items separately.

How does a co-op board approval process work?

• Expect a detailed application, financial review, references, and an interview; final approval is by the board subject to fair housing laws.

Where can you verify DC property tax information for a condo?

• Visit the DC Office of Tax and Revenue for property tax billing and assessment information.

What building documents should you review before buying?

• Review bylaws or proprietary lease, house rules, budgets, reserve study, meeting minutes, insurance, litigation, and any assessment history.