Real Estate

Treasury Proposes Rules for Ban on Large Investors Buying Single-Family Homes From Jan. 7

Treasury's proposed rule details how a ban on home purchases by investors controlling 350 or more single-family homes would work from Jan. 7, 2027. Public comments are due Nov. 23.

Oct 24, 2026 - 12:14

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The U.S. Treasury Department has proposed regulations spelling out how a new federal ban on single-family home purchases by large institutional investors will operate when it takes effect on January 7, 2027. The department announced the proposal on Thursday, October 22, 2026, and it was published in the Federal Register on Friday, October 23, opening a public comment period that runs through November 23, 2026.

What the law prohibits

The rules implement Section 1001 of the 21st Century ROAD to Housing Act, which was enacted on July 11, 2026, according to the Federal Register notice. Treasury said the law codifies key requirements of President Donald Trump's Executive Order 14376, "Stopping Wall Street from Competing with Main Street Homebuyers."

Beginning January 7, 2027, a large institutional investor generally may not buy, or enter into a contract to buy, a single-family home unless the transaction qualifies as an "excepted purchase," Treasury said in a press release. The statute defines a large institutional investor by reference to, among other things, whether an entity is in the business of investing in, owning, renting, managing or holding single-family homes and has direct or indirect investment control over at least 350 such homes.

"Treasury is working to ensure American families and workers have a fair shot at purchasing homes in their communities by increasing housing supply and limiting large institutional investors' role in the market, while supporting a strong, stable housing market and avoiding unnecessary disruption," Treasury Secretary Scott Bessent said in the release.

Build-to-rent and renovate-to-rent exceptions

Under the proposal, a qualifying build-to-rent program would cover homes that were never occupied by an owner-occupant, are purchased within 18 months of receiving a certificate of occupancy and are first occupied by renters after the purchase. HousingWire reported that the exception would apply both to fully rental communities and to communities that mix owner-occupied and rented homes. Treasury rejected treating older homes in existing rental communities as "newly constructed," writing that such an interpretation "would effectively render 'newly constructed' meaningless," according to the outlet.

For renovate-to-rent programs, an investor would have to buy homes that do not meet structural or core-system elements of local building codes, resolve all material deficiencies and spend at least 15% of the purchase price on improvements. The notice offers a non-exclusive safe harbor for the rehabilitation requirement when at least 10% of the purchase price goes to structural or core-system work.

Homeownership programs and transfers

Treasury also proposed safe harbors for programs meant to help renters buy homes. An investor would be deemed to provide "meaningful financial support" to a renter of at least five years if the support equals at least the lesser of $5,000 or 2.5% of the price, rising to 3.5% after seven years of renting. The percentage would be calculated on the lower of the purchase price or the Federal Housing Administration's one-unit loan limit for the county. Some programs would also have to give renters a right of first refusal and a 30-day "first look" period.

The proposal also sets conditions, tied to director and officer overlap and to "property control rights," for when an investor in a home-owning company counts as passive. Treasury further proposed that homes bought in compliance with the law could keep changing hands between large investors, provided each transfer qualifies for an exemption. "A contrary interpretation could impair market liquidity and orderly disposition of single-family homes without materially advancing the purposes of the Act," the department wrote, according to HousingWire.

Penalties

The statute allows Treasury, or the Justice Department at Treasury's request, to seek civil penalties of up to the greater of $1 million per violation or three times the purchase price of the property. The proposed rule would treat a prohibited purchase involving more than one large institutional investor as a single violation, a provision Treasury said is intended to keep a single purchase from producing total penalties above the statutory limit. Treasury estimated that 100 to 300 respondents would be subject to the rule's information-collection requirements.

Related housing measures

On October 22, President Trump signed an executive order directing the Federal Housing Finance Agency to set up a mortgage insurance cancellation pilot through Fannie Mae and Freddie Mac, expand alternatives to lender's title insurance for eligible refinances and create a manufactured-housing task force, The Real Estate Roundtable reported. Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, welcomed Treasury's proposal but urged the department to prevent investors from circumventing the restrictions, according to the Roundtable.

Comments on the proposal can be filed on Regulations.gov under docket TREAS-DO-2026-0529 through November 23.