Treasury Proposes Rule to Bar Investors From Buying Single-Family Homes

WASHINGTON — The U.S. Treasury is set to propose a federal rule that would prohibit institutional investors from purchasing single-family homes, a move intended to enhance housing affordability for American families. The proposed regulations, slated for release Thursday, would take effect on January 7, 2027, unless a purchase is categorized as an “excepted purchase.” These exceptions include investments in build-to-rent and renovate-to-rent programs, as well as homeownership initiatives.

Treasury Secretary Scott Bessent stated that the administration's goal is to restore the path to affordable homeownership, particularly for younger and working families. "Treasury is working to ensure American families and workers have a fair shot at purchasing homes in their communities by increasing housing supply and limiting large institutional investors’ role in the market, while supporting a strong, stable housing market and avoiding unnecessary disruption," Bessent said.

The proposed rule implements provisions of the ROAD to Housing Act, which, though passed by Congress, was not signed by President Trump. The act defines institutional investors as entities owning 350 or more homes. The legislation itself aims to streamline regulations and boost housing supply. Despite initial reservations about the bill, which he reportedly called a “yawn,” Trump later signed an executive order that incorporated some of its requirements, even as it became law without his signature.

Populist voices on both the political left and right have long criticized large investment firms for their role in the housing market, arguing that their acquisition of single-family homes drives up prices. Conversely, some policy experts and firms like Blackstone have argued that their market share is small and that government policies restricting new home construction are the primary drivers of high housing costs.

The proposed federal rule will also establish standards for build-to-rent programs and offer protection for renovate-to-rent purchases designed to bring properties up to code. The rule will also outline civil penalties for institutional investors that violate the prohibition. Following its introduction, the proposed rule will be subject to a 30-day public comment period.