Condo or co-op? If you are eyeing a place in Capitol Hill, this choice shapes everything from your financing to your monthly costs and resale timeline. It can feel confusing at first, especially with older buildings, board approvals, and different fee structures in the mix. This guide breaks down the essentials so you can choose with confidence. You will learn how ownership works, how loans differ, what to expect with fees, and what to look for in Seattle’s Capitol Hill buildings. Let’s dive in.
Condo vs co-op basics
Ownership and governance
A condo gives you fee simple ownership of your unit plus a shared interest in the common areas. You become part of a homeowners association that operates under recorded declarations, bylaws, and rules with a board elected by owners.
A co-op is different. A corporation owns the entire building and the land. You buy shares in that corporation and receive a proprietary lease or occupancy agreement for your unit. You become a shareholder and vote for a board that manages the building and approves new buyers.
What it means for you
- Condo ownership is real property. You receive a deed, pay your own property taxes, and can use common mortgage products.
- Co-op ownership is personal property. You buy shares, not a deed, and your right to live in the unit comes from your proprietary lease. Financing, taxes, and resale steps follow a different path.
Financing and approvals
Condo loans in Seattle
Condos are supported by the standard mortgage market. Conventional loans are common, and some buyers use FHA or VA loans when the condo project meets program requirements. Lenders review the building’s budget, reserves, insurance, owner-occupancy, and any litigation to confirm eligibility.
If you plan to use FHA or VA, verify project approval status early. Ineligible projects can limit your loan options and affect timing.
Co-op share loans and board interviews
Co-ops use share or co-op loans, which are less standardized than condo mortgages. Fewer lenders offer them, and many keep these loans in their own portfolios. Boards often ask buyers to show stronger financials, such as higher reserves or lower debt-to-income ratios.
Most co-ops require board approval before closing. Expect an application with financial documents, references, background checks, and usually an interview. Board decisions can add time and uncertainty to your timeline.
Get preapproved early
- For condos, choose a lender with Seattle condo experience who can vet the building quickly.
- For co-ops, talk with lenders who originate share loans, and start gathering tax returns, bank statements, employment letters, and references for the board package.
Monthly costs and taxes
What dues cover
Condo HOA dues typically pay for building maintenance, management, common-area insurance, reserves, and sometimes selected utilities and amenities. As an owner, you usually handle interior upkeep and carry an HO-6 policy for contents and improvements.
Co-op carrying charges often bundle more. They can include building expenses, building insurance, utilities, the building’s underlying mortgage, and property taxes paid by the corporation. Your proprietary lease will outline your interior responsibilities.
Reserves and assessments
Healthy reserves matter in both condos and co-ops. Older Capitol Hill buildings can face envelope, roof, or elevator projects, which may require special assessments if reserves fall short. In a condo, assessments follow HOA voting rules. In a co-op, board decisions can change carrying costs more quickly.
Taxes and insurance
- Condo owners receive a King County property tax bill for their unit and may deduct property taxes and mortgage interest based on federal rules. Consider speaking with a tax professional for your situation.
- In co-ops, the corporation pays property taxes on the whole building, then allocates costs through your monthly charges. The tax breakdown can include mortgage interest and property tax components. A CPA can help you understand deductions.
- Confirm the master insurance policy. Condo policies often exclude interior improvements and personal property, which your HO-6 policy should cover. Co-op coverage is governed by the proprietary lease and building policy.
Resale and rental rules
Market demand in Capitol Hill
Condos generally enjoy a wider buyer pool, supported by conventional financing and familiar ownership. In a high-demand area like Capitol Hill, well-maintained condos and quality conversions often sell readily.
Co-ops are less common in Seattle, which narrows the buyer pool and can lengthen days on market. Board approvals and share loan limits also influence timing.
Renting and subletting
Condo HOAs may allow rentals within set limits, such as a cap on investor units or a minimum lease term. Investor ratios can also affect financing options.
Co-ops often restrict or closely manage subletting. Some prohibit it. Others allow it by board approval or for limited periods. If renting the unit is part of your plan, review policies carefully before you commit.
Capitol Hill due diligence
Capitol Hill has a mix of vintage walk-ups, mid-century buildings, and newer developments. Older buildings can carry unique maintenance needs. Give yourself time and gather documents early.
For condos
- Declaration, bylaws, and rules
- Current budget, income and expense statements
- Reserve study and reserve balances
- Board meeting minutes from the last 12 to 24 months
- Master insurance certificate
- Assessment history and any current special assessments
- Owner-occupancy and rental percentage
- Litigation disclosures and status
For co-ops
- Articles of incorporation, bylaws, and proprietary lease
- Current budget, income and expense, and balance sheet
- Shareholder list and delinquency report
- Board and shareholder meeting minutes
- Offering plan or information memorandum if available
- Corporate tax returns or financial audit if available
- Master insurance and fidelity bond
- Share certificate and transfer procedures
- Sublet, guest, pet, and resale approval policies
Red flags to watch
- Low reserves or no updated reserve study for major systems
- High delinquencies or consistent cash shortfalls
- Ongoing or threatened litigation
- Significant deferred maintenance in older buildings
- Unusually restrictive bylaws or opaque approval criteria
- High investor concentration that could limit financing
- For co-ops, lack of audited financials or inconsistent board practices
Pro tip for older Capitol Hill buildings: review permit history and past major projects, including any seismic retrofits or envelope repairs. A qualified inspector with multi-unit and older-building experience is a smart investment.
Which option fits you
Choose a condo if you want:
- Broad financing options and a conventional mortgage process
- More certainty around closing timelines
- Potentially easier resale and a wider buyer pool
- More flexibility to rent, subject to HOA limits
Choose a co-op if you value:
- A community-oriented building with more control over subletting
- Potentially lower purchase price for the location and space
- A board that actively manages admissions and house rules
- A bundled monthly charge that may include taxes and building debt
Both paths can work well in Capitol Hill. Your comfort with approvals, financing structure, and long-term plans will guide the right fit.
Your next steps
- Get preapproved for the type of property you want. If co-ops are in the mix, confirm your lender does share loans.
- Align your timeline with building realities. If considering a co-op, plan for board approval and potential interview dates.
- Request the full document package early. Read minutes for upcoming projects and owner sentiment.
- Hire an inspector experienced with Seattle’s older building stock. Ask about envelope, roof, mechanicals, and seismic items.
- If you are buying a co-op or a condo with complex issues, consult a real estate attorney. For tax treatment, talk with a CPA.
When you are ready to compare specific buildings in Capitol Hill, a local guide helps you see the full picture. From financing fit to board culture and resale trends, you deserve a clear plan. If you would like hands-on guidance and a thoughtful process, reach out to The Shutes Team. We will help you evaluate options, line up trusted pros, and move forward with confidence.
FAQs
What is the main difference between a condo and a co-op in Seattle?
- A condo gives you a deed to your unit, while a co-op gives you shares in a corporation and a proprietary lease to occupy a unit, which influences financing, taxes, and resale steps.
How do co-op board approvals affect closing in Capitol Hill?
- Co-ops usually require an application, financial documents, references, background checks, and an interview, which can extend timelines and add uncertainty compared with condo closings.
Can I use FHA or VA financing for a Capitol Hill condo?
- Possibly, if the condo project meets program requirements; verify project approval status early, since ineligible buildings can limit FHA or VA loan options.
Why are co-op monthly fees sometimes higher than condo dues?
- Co-op carrying charges often bundle building expenses, property taxes, insurance, utilities, and any underlying building mortgage, which can increase the monthly total.
What documents should I review before buying in a Capitol Hill building?
- For condos, review declarations, bylaws, reserves, budgets, minutes, insurance, assessments, and litigation; for co-ops, add corporate financials, proprietary lease, policies, and transfer procedures.
Do rental rules differ for Capitol Hill condos and co-ops?
- Yes. Condos often allow rentals with limits like caps or minimum lease terms, while co-ops commonly restrict or tightly control subletting and may require board approval.
