Redwood Credit Union is among the San Francisco lenders seeing an increase in home buyers turning to tenancy-in-common loans to finance their home purchases in the city
San Francisco's frenzied housing market has led to a surge in Bay Area buyers teaming up to take on properties together.
Bay Area lenders and brokers say they've seen a surge in home buyers taking out tenancy-in-common mortgages to become homeowners. Also known as TICs, these mortgages allow two or more owners to take on a property, typically with multiple units.
"People who would not necessarily buy into a TIC ... are now looking at TICs as a way to get into the market," Compass real estate agent Jessica Johnson told the Business Times, adding that TICs make up about 20% of the available inventory in several of San Francisco's most desirable neighborhoods such as Russian Hill, Nob Hill, the Marina and the Inner Richmond.
The increase comes as San Francisco's housing affordability is expected to worsen as more buyers pour into the market, especially as high-profile IPOs come to market. San Francisco apartment rents are already at record levels due to an "AI demand shock," according to rental marketplace Zumper. San Francisco Mayor Daniel Lurie recently declared a "rent emergency," making several proposals to help protect tenants from eviction.
"Right now, the market is crazy because of the influx of money from AI," Johnson said.
A business that has doubled
Redwood Credit Union, which began offering TIC loans in 2017, said its TIC lending has more than doubled, up 103%, based on dollar volume of TIC loans between the second half of 2024 and the first half of 2026. In that time, the Santa Rosa-based credit union saw its TIC lending go from 61 loans totaling $48.8 million to 109 loans totaling $99.3 million.
"About 50% of the business that we do in San Francisco (for home purchases) is TIC financing," Debbie Ingle, senior vice president of mortgage lending at Redwood, told the Business Times. She credited the credit union's growth in TIC lending in part to hiring loan officers to spread the word that Redwood does this type of financing.
TIC borrowers, in some cases, have rented their units for several years and turned to TIC financing to buy the unit they've long lived in. "It's pretty cool to see these people get to buy their homes in such an expensive market," Ingle said.
TIC lending got a big boost about 20 years ago with the debut of fractional TIC loans that allows buyers to get their own mortgage to purchase a unit in a multifamily property owned as tenants-in-common rather than one mortgage that covers all the TIC owners in the property. Bank of Marin was among the pioneers of fractional TIC loans, debuting them in 2005.
"We have seen an increase in loan volume over the past six months," Misako Stewart, chief credit officer at Bank of Marin, told the Business Times in a statement. "TICs are a popular and affordable housing option for homebuyers because the purchase price for TIC units is typically 10% to 20% lower than comparable condominiums. It allows buyers to purchase properties in established San Francisco neighborhoods with limited housing supply.
"We have seen an increase in demand across the Bay Area, but currently Bank of Marin limits it lending to owner-occupied units in buildings with two to 12 units located in San Francisco," Stewart said.
A smaller purchase price
Another plus for TIC loans, at least from the buyer's perspective, is that units in a building owned as tenancy-in-common typically sell for 10% to 20% less than comparable condos. Redwood's analysis of higher-priced San Francisco neighborhoods found that TIC units sold for 19% less per square foot than condos, $1,163 versus $1,434. The credit union found TIC and traditional condos spent a similar amount of time on the market.
Condos likely fetch higher prices, given the widespread availability of mortgage financing for condos, while TIC units are more of a niche market.
"Over the last 21 years, we have seen TIC lenders come and go, and today there are a limited number of local lenders that provide TIC loans," Stewart said. "We are proud of our commitment to this niche market segment."
Some pioneers of fractional TIC loans have dropped the service after being acquired by larger financial institutions. Such is the case with Sterling Bank & Trust after it was acquired by Everbank, based in Jacksonville, Florida.
"We did not continue this product and type of lending after the acquisition of Sterling Bank was completed," an Everbank spokesperson said.
Dublin-based Patelco Credit Union said it has offered fractional TIC loans for about five years.
"While it is a relatively small part of our mortgage business, we continue to support this financing option for qualified borrowers," Everett Garnick, Patelco's director of home loans, said in a statement. So far this year, the East Bay credit union has made four fractional TIC loans totaling $2.8 million, largely for home purchases rather than refinancings.
"Looking ahead, we expect the market to continue facing headwinds similar to those affecting the broader housing market, particularly affordability pressures and limited inventory," Garnick said.
