Treasury proposes rules for ban on large investors buying single-family homes

The Treasury Department proposed rules on October 23 to clarify how a new federal ban on purchases of single-family homes by large institutional investors will work, in a notice of proposed rulemaking in the Federal Register. Comments are due by November 23, 2026.

What the law does

Section 1001 of the 21st Century ROAD to Housing Act, "enacted on July 11, 2026, is intended to promote homeownership opportunities for American families by prohibiting purchases of single-family homes by large institutional investors," subject to "excepted purchases," Treasury says. The prohibition takes effect 180 days after enactment, on January 7, 2027.

A large institutional investor is an entity engaged in the business of investing in, owning, renting, managing or holding single-family homes that, alone or with other entities, has direct or indirect investment control of "not less than 350 single-family homes." Investment control includes owning or controlling more than 25% of any class of equity of the entity that owns the home, unless the holder is a passive investor.

What the proposal says

The proposal defines terms the statute leaves open:

• Build-to-rent: homes that were not occupied by an owner-occupant before purchase, are bought within 18 months of receiving a certificate of occupancy, and are first occupied by renters.
• Renovate-to-rent: an investor substantially rehabilitates homes that do not meet structural or core system elements of local building codes, resolves all material deficiencies, and spends at least 15% of the purchase price on improvements.
• Homeownership programs: rental contracts that include terms such as positive reporting of rental payments, financial support for the purchase and the renter's right to buy the home.

Under the statute, Treasury or the Justice Department can sue for a civil penalty of up to "the greater of $1 million per violation or three times the purchase price of the property involved." The proposal would deem a purchase that violates the ban with respect to more than one large institutional investor a single violation when calculating that maximum.

What to watch

Treasury calls this "the first phase" of a phased approach and says it expects to consider later rulemakings on other excepted-purchase categories, compliance procedures, reporting and recordkeeping, and enforcement. A separate annual notice to the Department of Housing and Urban Development about homes under investors' control is outside this proposal.