For a lender a condo v. townhome is important.
If the legal description states it is a condo, the development needs to be approved by FNMA or FHA and VA.
If the legal description does not state 'condo', then the development will not need be approved by the above entities.
The lender will not be concerned with owner occupancy or whether or not the development is in current litigation.
The HOA fees are generally less than a condo as the townhome owner is responsible for more of their property than a condo owner.
The condo owner owns its own 'air space', but shares the land equally with all other condo owners.
In a town house (non condo), how much property and common area space will be different for each development.