US Treasury proposes rules for institutional investor ban on single-family homes

The U.S. Treasury Department has released a 96-page proposal detailing how a federal restriction on large institutional investors purchasing single-family homes will operate starting January 7, 2027. The regulations implement Section 1001 of the 21st Century ROAD to Housing Act, which defines large institutional investors as those controlling 350 or more single-family homes.

The proposal includes specific exemptions to distinguish between market interference and necessary housing development. Under the “build-to-rent” exception, newly constructed homes may qualify if acquired within 18 months of receiving a certificate of occupancy. The “renovate-to-rent” exception requires properties to have structural or core-system deficiencies, with rehabilitation expenditures totaling at least 15% of the purchase price.

Treasury Secretary Scott Bessent stated the goal is to ensure American families and workers have a fair opportunity to purchase homes by increasing supply and limiting the role of large institutional investors. While the legislation aims to increase housing availability, some industry experts note that institutional holdings currently represent less than 1% of the nation's single-family housing stock.