Treasury Proposes Barring Large Investors From Buying Single-Family Homes Starting January 7, 2027

The Treasury Department proposed rules on October 22, 2026, to bar large institutional investors from buying single-family homes from January 7, 2027. The proposal is Treasury’s first attempt to say how the ban will work in practice, and most of it is about the exceptions.

The ban itself is already law. Congress wrote it into Section 1001 of the 21st Century ROAD to Housing Act, H.R. 6644, a broad housing bill that cleared the Senate 85 to 5 on June 22. President Trump said he wouldn’t sign it, arguing that Congress should pass the SAVE America Act first, and he didn’t. The bill became law without his signature on July 11. The ban starts 180 days later. Treasury says the rule also codifies key parts of Executive Order 14376, “Stopping Wall Street from Competing with Main Street Homebuyers,” which the President signed on January 20.

Photo: Carol M. Highsmith, Library of Congress, public domain via Wikimedia Commons

Who counts as a large investor

The statute fixes the line at 350 homes. An entity is covered if it’s 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 of them. Treasury can’t move that number, and it can’t narrow the exceptions Congress wrote.

What Treasury can do is define the words around it. The proposal says “in the business of” means holding homes for income or financial gain, so a company that owns houses incidentally to some other business falls outside. It also sets tests for when a fund investor is passive and so doesn’t have its stake counted: no shared directors or officers, and no rights to control the properties. A covered investor that breaks the ban faces a civil penalty of up to $1 million or three times the purchase price, whichever is greater. The proposal treats one prohibited purchase involving several investors as a single violation.

Three ways to keep buying

Most of the notice deals with the purchases Congress exempted. There are three main ones.

Build-to-rent. A large investor may still buy new homes to rent out. Treasury proposes that the home be bought within 18 months of getting its certificate of occupancy, never have been lived in by an owner, and be first occupied by renters. It asks whether 18 months is the right window and whether a minimum rental period should apply. Nothing in the proposal stops the investor from selling the house later.

Renovate-to-rent. An investor may buy a home that fails key building code standards if it fixes the problems and spends at least 15 percent of the purchase price on improvements. The price counts the structure only; the tax-assessed value of the land is subtracted. A safe harbor covers an investor that spends at least 10 percent on structural or core systems and resolves every material deficiency in them. Treasury asks whether the work should have to be finished within a set period, such as six months, but proposes no deadline.

Homeownership programs. Purchases tied to programs that help renters buy are also exempt. Those programs need a right of first refusal and a 30-day “first look” for renters before the home goes to other buyers. The safe harbor for “meaningful financial support” toward a renter’s purchase is the lesser of $5,000 or 2.5 percent of the price after five years of renting, rising to 3.5 percent after seven. The percentage is taken from the purchase price or the local FHA one-unit loan limit, whichever is lower.

Foreclosure-related purchases and transfers of existing homes between large investors can also continue under the proposal.

What the rule leaves open

The ban stops new purchases. It doesn’t force anyone to sell. An earlier version of the bill would have required certain exempt homes to be sold to individual buyers within seven years, and that requirement was dropped before passage. The prohibition also expires on its own 15 years after it takes effect.

So the large rental companies keep the homes they own, and they keep a route to growth through new construction. The exceptions Congress chose point investor money toward building and repairing houses and away from bidding on existing homes against first-time buyers. How strict that line turns out to be depends on details like the 18-month window and the 15 percent test, which is why the comment period matters.

Treasury doesn’t say how many investors cross the 350-home line or how many homes they hold. The notice gives no count. It does note that covered investors will file an annual notice with HUD, in a form HUD will set, which should eventually produce that number.

Treasury Secretary Scott Bessent said the rule aims to give families “a fair shot at purchasing homes in their communities” while avoiding unnecessary disruption to the market. Treasury calls this the first of several rulemakings under Section 1001. Comments are due 30 days after the notice appears in the Federal Register, where it was scheduled for publication on October 23.

The rule lands while Washington is also deciding what to do with the mortgage giants that sit underneath the whole market. The planned public offering of Fannie Mae and Freddie Mac is still stalled, with Treasury’s own claim on the two companies growing.