Underwriting difference between condo & townhome?

I am in the process of buying a condo/townhouse and my lender had to get a second appraisal done after they found it is part of a condo complex. The structure of the unit is what I would consider a townhouse. There are 8 units attached side by side all in a row. Each unit is 2 stories tall. I work as an appraiser, but I mostly work in the construction lending niche and don’t have to make this distinction. The person in my office that handles our refinance work told me that as far as the appraiser regs are concerned this could go on a URAR as a fee-simple attached townhome, which is how it was originally done, or on a CONDO form. This apparently only became an issue when considering the amount of insurance coverage needed. The exterior fire insurance is covered by the complex. I simply wish to know for my own personal understanding.

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