Treasury moves to curb big home investors

The U.S. Department of the Treasury has released proposed regulations to implement new limits on large institutional investors’ ability to purchase single-family homes. The rules, issued on October 22, 2026 under the 21st Century ROAD to Housing Act, would restrict entities that already control substantial single-family portfolios from expanding their holdings, with the aim of supporting more affordable homeownership for households seeking to buy homes.

Beginning on January 7, 2027, a large institutional investor generally may not purchase, or enter into a contract to purchase, a single-family home unless the transaction qualifies as an excepted purchase under the law. Treasury said the regulations are part of broader efforts to make homeownership more accessible for young and working families while maintaining a strong and stable housing market.

The ROAD to Housing Act defines a large institutional investor in part by whether an entity is engaged 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 properties. The proposed rules clarify that an entity is considered to be in this business when it engages in these activities for income or financial gain, and not incidentally to another line of business.

Under the law, these investors are barred from purchasing additional single-family homes once they meet the threshold, unless a specific exception applies. The framework is intended to limit the role of large investors in the single-family market while preserving legitimate business activity that supports housing supply and financing.

The proposed regulations recognize that housing-market participants use a variety of ownership, investment, construction, servicing, and property-management structures. To address this complexity, the ROAD to Housing Act permits several categories of excepted purchases, including transactions made pursuant to build-to-rent programs, renovate-to-rent programs, homeownership programs, and other initiatives designed to boost homeownership.

The proposal would also provide non-exclusive safe harbors for several statutory requirements, such as determining whether a home has been substantially rehabilitated under a renovate-to-rent program. Additional safe harbors cover standards for assessing whether renters have received meaningful financial support under certain homeownership programs, and whether a renter has been granted a right of first refusal with a 30-day first-look period.

Treasury’s proposed approach states an objective of providing clarity without unnecessary disruption to housing supply, homebuilding, rehabilitation activity, or capital formation. To that end, the rules clarify certain purchases involving debts previously contracted, loss mitigation, and transfers between large institutional investors that are intended to protect housing-market liquidity.

The regulations further clarify how to calculate the maximum civil penalty when a single prohibited purchase involves more than one large institutional investor. These enforcement details are meant to support consistent application of the law’s restrictions across complex ownership and investment structures in the single-family market.

Treasury said the proposed regulations implement Section 1001 of the ROAD to Housing Act and codify key requirements of Executive Order 14376, “Stopping Wall Street from Competing with Main Street Homebuyers,” and are part of a broader effort to restore the path to affordable homeownership and ensure families have a fair chance to purchase homes in their communities.

Members of the public are invited to submit comments on the notice of proposed rulemaking within 30 days after its publication in the Federal Register. Following the comment period, Treasury will consider feedback in finalizing the regulations before the restrictions on large institutional investors’ home purchases take effect on January 7, 2027.