Fungirl , buying a town home or condo does not change the down payment or closing costs needed for the transaction, they would be very similar. Your monthly payments including your condo fees could be higher than the town home payment however, so you really need to see a Good Faith Estimate on both. The reason you may need less for the new condo to get in, is probably because the seller is paying some or all of your closing costs. Those can most times be negotiated to have the seller pay them on a town home as well. You really need to have an agent working on your behalf to help you with the many questions you have.