In recent years, the heat and mass transfer of transport membrane condenser have been studied numerically in the literature. However, the available numerical models were restricted to the single-phase models. As condensation could occur at the outer surface of the membrane tube of the TMC based heat exchanger, the single-phase flow treatment will be inadequate for analyzing the phase change that occurs inside the membrane tube bundle. The current study aims to model the steady state flow with phase change in the TMC tube bundle using a two-phase flow model with ANSYS/Fluent. The multiphase flow is modeled by Volume Of Fluid (VOF) model. The condensation process was modeled using the Lee model, which was implemented in the governing equations as mass and energy source terms and applied to both the flue gas domain and porous membrane domain. The SST k − ω two-equation turbulence model was used to model the turbulent flow of the flue gas. The CFD results were validated against the existing experimental data from the literature. Using the VOF multiphase model, the results showed that the outlet flue gas temperature and outlet water temperature were less than 1% and 5% errors, respectively, compared to the experimental data. The multiphase model was better in predicting the outlet flue gas temperature than the single-phase model. The numerical results revealed that the percentage of water vapor condensation out of all of water vapor in the flue gas inside the flue gas domain calculated numerically was between 21% to 81%, compared to that reported experimental condensation was 7% to 49%. The effect of flue gas Reynolds number, inlet water temperature, and inlet water vapor mass fraction were also studied.