What Happened?

If you have been competing with large investment firms for a home to buy, a federal ban on those firms purchasing single-family homes takes effect Jan. 7, 2027. The 21st Century ROAD to Housing Act created a ban on large institutional investors buying single-family homes, and the U.S. Department of the Treasury (Treasury) has proposed a rule defining who is covered and how the exceptions work, according to a Legis1 review. ​

The ban applies to "large institutional investors," defined as for-profit entities that, alone or together with others, control at least 350 single-family homes. Four categories of purchases would still be allowed:

  • Build-to-rent: An investor may purchase homes intended to be built and rented out.
  • Renovate-to-rent: An investor may buy a structurally deficient home if it spends at least 15 percent of the structure's purchase price on improvements, with cosmetic work excluded.
  • Homeownership programs: Contracts must give renters positive credit reporting at no charge and a right to buy at fair market value minus the investor's financial support.
  • Boost-homeownership programs: Contracts must include positive credit reporting, a 30-day right of first refusal to buy, and meaningful financial support.

Why Does it Matter to Me?

To qualify for any exception, an investor must have written policies in place before the purchase; a firm cannot label a purchase as excepted after the fact. Treasury also proposed a passive-investor test to limit circumvention through layered ownership structures: an entity is not counted toward the 350-home threshold through a second entity only if none of its directors, officers, employees, or designees serve as a director or officer of that second entity, and it has no right to make, direct, or prevent decisions on buying, selling, holding, leasing, renovating, or managing a single-family home.

On penalties, a single transaction involving more than one large institutional investor counts as one violation, carrying a maximum civil penalty of the greater of $1 million or three times the purchase price; separate purchases of different homes remain separate violations.

Both Sides, Now

Treasury Secretary Scott Bessent said the department sought to give families a fair chance to buy homes in their communities, and Treasury said the proposal supports affordable homeownership while avoiding unnecessary disruption to housing supply, construction, rehabilitation, and investment. Congress passed the 21st Century ROAD to Housing Act to create the ban; Treasury is carrying out that law through this rulemaking, without a separate congressional vote required.

The opposing view holds that institutional landlords provide rental housing and that restricting their purchases could disrupt housing supply. In March 2026, the Federal Trade Commission (FTC) sent 444,131 checks totaling more than $47.2 million to consumers who paid Invitation Homes undisclosed fees or other deceptive charges between January 2021 and September 2024, after the FTC alleged the company deceived renters about lease costs and unfairly withheld security deposits.

What Happens Next?

This proposed rule is Phase 1 of a phased rulemaking; future rounds are expected to address additional excepted-purchase categories, compliance procedures, reporting, and enforcement. Public comments are due Nov. 23, and can be submitted at regulations.gov under docket TREAS-DO-2026-0529. The statutory ban takes effect Jan. 7, 2027, under the 21st Century ROAD to Housing Act, and Treasury is writing the rules that define who is covered before that date.

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