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Marcie Geffner A Allison Martin Updated Wed, December 3, 2025 at 11:43 PM GMT+8 7 min read Townhouses have distinctive features that attract home buyers seeking efficient living arrangements. If you’re considering buying a townhome, the process is similar to what you’d expect when buying a single-family home. However, there are a few unique factors to consider before making a purchase.
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MORE: See our picks for the best mortgage lenders for first-time buyers.
What is a townhouse?
A townhouse is a housing unit with two or more stories. It's typically tall and narrow, and it usually shares at least one exterior wall with one or two similar homes next door.
Townhouses are sometimes built in rows. When built in this manner and sharing external characteristics with neighboring homes, they may also be referred to as "rowhouses," as well as "townhouses," or "townhomes." A rowhouse that's at the end of a row and attached on only one side is still called a rowhouse.
Pros and cons of townhouses
Like other housing types, townhouses come with advantages and disadvantages.
Pros
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Fewer exterior walls. Because townhouses share walls with other units, they have fewer exterior walls than standalone houses. A townhouse can be less vulnerable to wind, rain, and toppled trees — and the extensive (and expensive) damage those conditions can cause.
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Flexible space. With two or more stories, a townhouse can be configured for separate living areas. For example, a children's playroom on one floor might be isolated from a home office or a family member's living quarters on another floor.
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Less noise than with some home types. With no separate housing unit above the ceiling or beneath the floor, townhouses may have less noise from neighbors than buildings with stacked dwelling units.
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Less yardwork. Due to their architectural design, townhouses typically have less outdoor space per unit. For owners, that means a smaller yard to mow, fewer trees to trim, and less overall outdoor maintenance.
Cons
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Interior stairs. In townhouses with two or more stories, there are often many interior stairs. Walking up and down these stairs daily may be difficult for people with mobility issues. You might be able to find a townhouse with a private elevator or add one to the home after buying.
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More noise than with some types of homes. Since townhouses typically share one or two full walls with a separate dwelling unit, certain sounds from neighbors' homes may be more noticeable than they would be in a detached home. There's a reason why shared walls are sometimes referred to as "party walls."
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How to buy a townhouse
Still interested in buying a townhome? This step-by-step breakdown will help you navigate the purchasing process with confidence.
Step 1: Secure a mortgage preapproval
If your credit profile and overall financial health are in good standing, the first step is to get preapproved for a mortgage.
Ideally, you want to get preapproved with at least three mortgage lenders so you can compare rates and fees to find the best deal. Doing so also helps you determine how much townhome you can afford.
Getting preapproved for a mortgage also shows sellers that you are a serious buyer who can afford to buy their townhouse.
Step 2: Find an experienced real estate agent
The real estate agent you select should have experience with townhome transactions. Instead of navigating a sea of properties, a seasoned agent can help you find a place that suits your unique needs and budget. They’ll also have in-depth knowledge of how townhouses work in your area.
Another key benefit is having a licensed professional guide you through the home-buying process and advocate on your behalf as needed. This is particularly important once you find the right home and begin the process of negotiating the price, or if you encounter any issues after the offer is accepted but before the deal closes. More on this shortly.
Step 3: Shop around and negotiate an offer
Again, the real estate agent can help you find the perfect townhome at the right price. Once you’ve found the best fit, you’ll need to submit a formal offer on the house. The offer should be for a reasonable amount. Your agent will provide real estate "comps" (comparable properties) in the area to help determine a fair price.
Sometimes, the seller accepts quickly in hopes of closing the deal sooner rather than later. However, if there’s stiff competition for the property or if the seller feels they are being low-balled, several rounds of negotiations may be required to reach a price point and terms that work for both parties.
Step 4: Seal the deal
You’ll need to take a few more steps before you can take possession of the property. For starters, the loan will need to undergo underwriting, which involves the lender verifying the contents of your loan application and confirming that you are a suitable candidate for a mortgage. The lender will also order a home appraisal, and the underwriter will review it to ensure you’re paying a fair price for the townhome.
In the meantime, it’s worth scheduling a home inspection to confirm the home is in solid shape to avoid any surprises later on. If there are material issues, it could be grounds to renegotiate a lower purchase price, or in some instances, to walk away from the deal.
But if everything checks out, you’ll receive a “clear to close” from the underwriting team. At that point, all that’s left is to sign the closing documents, settle any unpaid balances (if applicable), and get the keys to your new place.
Financing a townhouse purchase
Because a townhouse is an architectural style and not a form of ownership, financing for this type of home may not differ in any material way from getting a mortgage for a detached house. Most buyers opt for conventional or government-backed loans.
Conventional loans are ideal for buyers with strong financial profiles, including those with high credit scores, and feature competitive interest rates.
Government home loans, such as FHA and VA loans, offer more flexible lending guidelines and cater to first-time homebuyers, as well as those with lower credit scores, limited financial reserves, or higher debt-to-income ratios.
Some townhouses are also condos or co-ops. If that's the case, the financing requirements for that type of home would also apply to the townhouse. If you're unsure about a townhouse's ownership structure, ask for details before making an offer to buy it.
If you appreciate the special architectural style of a townhouse, this type of home might be a good fit for you. Still, it’s vital to familiarize yourself with the purchasing process so you can move forward with confidence and ensure you get the best deal on a mortgage.
More types of houses
Trying to decide if a townhouse is right for you? See how it stacks up against other types of homes.
Buying a townhouse: FAQs
What credit score do you need to buy a townhome?
It depends on the type of mortgage you select. Conventional mortgages typically require a credit score of at least 620, but a higher score generally results in better terms. If your score is lower, a government-backed mortgage may be a better option. To qualify for an FHA loan, you need a credit score of 580 (or 500 with a 10% down payment). VA and USDA loans do not impose minimum credit score requirements, but many lenders prefer applicants with a credit score of at least 640.
Is it hard to get a loan for a townhouse?
Not necessarily. If you meet the lending guidelines, the process should be relatively smooth. It’s worth shopping around, though, and asking the lender you select about specific documentation requirements and any additional information you should know or take care of to avoid hiccups during the application process.
What down payment is needed to purchase a townhouse?
Again, the minimum down payment requirement varies by home loan. A down payment of at least 3% is needed for a conventional loan. FHA loans require 3.5% down (or 10% if your credit score is between 500 and 579), while VA and USDA loans are available with no money down.
Laura Grace Tarpley edited this article.
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