The Department of the Treasury released a proposed rule on October 22 to implement the 21st Century ROAD to Housing Act’s restrictions on large institutional investors buying single-family homes. Beginning January 7, 2027, investors that control at least 350 single-family homes generally may not buy additional homes unless the purchase falls under one of the exceptions in the law.
The proposal explains how those exceptions would work. Build-to-rent purchases would be limited to newly built homes that have never been owner-occupied and are bought within 18 months of completion. Renovate-to-rent purchases would apply only to homes that fail key building code standards when purchased, and the investor would need to fix those problems and spend at least 15% of the purchase price, excluding land, on improvements. For programs that help renters become buyers, the proposal defines what counts as meaningful financial support toward a renter’s purchase, with a safe harbor of up to $5,000 for renters of five years or more. It also gives renters 30 days to make an offer before an investor can list or market the home to other buyers. The proposal also clarifies which investors are covered, including when a minority investor in a fund is considered passive. Foreclosure-related sales and sales between large investors of homes they already owned could continue.
Treasury describes this as the first of several rulemakings on the law. Comments are due 30 days after the proposal is published in the Federal Register, which is scheduled for October 23. NAR is reviewing the proposal and will share updates with members.
