The U.S. Treasury has proposed rules clarifying which institutional homebuyers would face restrictions on purchasing additional single-family homes beginning January 7, 2027. The October 23 proposal addresses a 350-home control threshold, exceptions for new rental construction and major repairs, and purchase rights for certain renters. Its details affect property companies and prospective buyers.
Key Takeaways
- The federal purchase restriction takes effect January 7, 2027, under a law enacted July 11, 2026. Treasury’s October 23 regulations are still proposed.
- Covered for-profit companies generally must control at least 350 single-family homes, including through certain related entities.
- Qualifying newly built rentals and extensively repaired homes may remain eligible for purchase under defined exceptions.
- Certain renter programs would provide a 30-day first opportunity to purchase a home. Comments on the proposal close November 23.
The Treasury Department’s new proposal places the 350-home threshold at the center of planned federal purchase restrictions on institutional homebuyers, detailing when large corporate owners could continue acquiring single-family houses after the law takes effect next year. The department published its proposed regulations in the Federal Register on Friday, October 23, 2026.
The restrictions were established by the 21st Century ROAD to Housing Act, enacted July 11. Treasury is now proposing interpretations of the law’s definitions, permitted purchases and penalty provisions. The document does not impose an immediate purchase ban or require companies to sell houses they already own.
The law covers contracts as well as completed acquisitions. Its definition includes buildings with no more than two residential units but excludes manufactured homes.
Institutional Homebuyers Face a 350-Home Control Threshold
The restriction generally covers for-profit entities that own, rent, manage or hold single-family homes and directly or indirectly control at least 350 qualifying properties. Control may be shared through related companies, so ownership records under one corporate name do not necessarily establish whether the threshold is met.
Under the statute, control can involve authority over property decisions, management of an owning entity or specified equity rights. Treasury proposes standards for passive ownership and fee-based management. A property manager without the necessary control rights would not automatically qualify because it oversees hundreds of houses.
Not every corporate buyer would be restricted. The statute excludes certain permitted acquisitions when calculating the threshold and does not require covered firms to sell houses purchased before July 11, 2026. Existing properties can remain in a company’s portfolio without a mandated sale.
Broader market data provide context but do not identify every company covered by the law. Realtor.com Economic Research reported that corporate-structured buyers purchased approximately 224,000 U.S. homes during the first half of 2026, a 7% annual decline. Those purchases represented 10.7% of transactions, and smaller buyers accounted for about two-thirds of purchases in the report’s corporate-buyer categories.
The research measures buyers using recorded transactions, not the statute’s legal test of control. Separately, figures on starter-home supply and pricing show that starter-priced properties made up 36.2% of active listings in August 2026, compared with 38.1% in August 2019. Neither measure establishes how many homes the new restriction might make available to individual purchasers.
New Construction and Major Repairs Remain Eligible for Exceptions
The law permits certain acquisitions involving new rental construction, substantial rehabilitation, homeownership programs and transfers among eligible owners. Treasury proposes conditions to distinguish those transactions from ordinary purchases of existing houses.
For a build-to-rent transaction, the proposal would require purchase within 18 months of a newly constructed home’s occupancy approval. The home could not previously have been occupied by an owner-occupant and would need to be rented first after purchase. The exception would cover mixed communities with rental and owner-occupied properties.
Renovate-to-rent purchases face different standards. A home would need to have structural or major-system deficiencies under local building codes when acquired, and the purchaser would need to resolve all material deficiencies. Total qualifying improvements must equal at least 15% of the purchase price attributed to the house, excluding land value.
Treasury also proposes a 10% spending benchmark for structural or core-system work as one route to establish substantial rehabilitation. That benchmark would not replace the separate 15% overall improvement requirement. Ordinary cosmetic work alone would not qualify a transaction for the rehabilitation exception.
Qualifying programs would need written policies or procedures adopted before the relevant purchase, under Treasury’s proposal. Additional exceptions address certain foreclosures, existing debt obligations, transfers between covered corporate owners and, for a limited two-year period, qualifying purchases from sellers outside the restricted category. Eligibility would still depend on the statutory conditions applicable to each transaction.
Renter Purchase Rights and Civil Penalties Receive New Detail
Some permitted housing programs would give participating renters a defined opportunity to buy the homes they occupy. Under Treasury’s proposed framework for one such program, owners would provide written notice of a planned sale and give eligible renters a 30-day first-look period before marketing the property or negotiating with competing purchasers.
The proposal also outlines a right of first refusal. If a company later receives an acceptable outside offer at or below the amount previously offered by the renter, the renter would receive at least five business days to match the material financial terms. These protections apply to qualifying programs rather than every rental owned by a large company.
A separate homeownership-program exception addresses optional positive rent reporting, specified credit-contract treatment and financial support for a tenant’s purchase. Those requirements do not automatically give every renter a chance to buy the home.
The statute authorizes civil penalties of up to the greater of $1 million or three times the property’s purchase price for a prohibited acquisition. Treasury proposes counting one purchase involving multiple covered entities as one violation when calculating the maximum penalty, without removing potential responsibility from firms involved.
The proposed restrictions also arrive during a period of uneven buyer demand. Reports on housing market shifts toward buyers describe expanding choices in some locations alongside elevated borrowing costs. Those conditions are separate from the new rules, and neither Treasury nor the cited sales data establishes a specific future change in national home prices.
For institutional homebuyers, the remaining regulatory questions concern documentation, corporate control and eligibility for permitted purchases. Treasury is accepting public comments through November 23, 2026, before finalizing the proposal’s provisions. The statutory purchase restriction is scheduled to begin January 7, 2027, regardless of whether every implementation detail is settled beforehand.
Frequently Asked Questions
When does the federal purchase restriction take effect?
The law schedules the restriction to begin January 7, 2027. Treasury’s October 23, 2026 proposal explains possible implementing rules that remain subject to public comment.
Which companies fall under the 350-home threshold?
Covered institutional homebuyers generally are for-profit businesses with direct or indirect control of at least 350 qualifying houses. Ownership arrangements and exceptions affect how the threshold is determined.
Can large companies still buy newly built rental homes?
Yes, qualifying build-to-rent purchases can fall within a statutory exception. Treasury proposes conditions concerning previous occupancy, intended rental use and an 18-month window after occupancy approval.
Do renters automatically get the first chance to buy?
No. The proposed 30-day first-look period applies to specified qualifying homeownership programs, not every company-owned rental property.
Must covered firms sell their existing houses?
No. The statute does not require covered firms to sell qualifying houses purchased before July 11, 2026. It primarily addresses future acquisitions and contracts to purchase.
