US Treasury proposes restrictions on large institutional single-family home buyers

The U.S. Treasury Department has issued a proposed rule to implement restrictions on large institutional investors purchasing single-family rental homes. This rulemaking follows the 21st Century ROAD to Housing Act, which mandates a statutory ban effective January 7, 2027, for for-profit entities that own or control at least 350 single-family homes.

The proposal serves as the first phase of a multi-stage process to define covered entities, exceptions, and enforcement mechanisms. To qualify for statutory exceptions—which include build-to-rent, renovate-to-rent, and homeownership programs—investors must operate under written policies adopted prior to the purchase.

Under the renovate-to-rent exception, investors may only purchase structurally deficient homes if improvements total at least 15 percent of the purchase price, with a specific safe harbor requiring at least 10 percent of spending to be directed toward structural or core system elements. Treasury Secretary Scott Bessent stated the goal is to provide families a fair opportunity to purchase homes in their communities while avoiding disruptions to housing supply and construction.