Congress Limits Institutional Acquisition of Single-Family Homes

Federal policy targeting institutional ownership of single-family rental housing has evolved from executive action into a far-reaching statutory framework affecting nearly all aspects of the US housing market. Following Executive Order 14376, which declared an administration policy that large institutional investors should not acquire single-family homes that could otherwise be purchased by families, Congress has passed the 21st Century ROAD to Housing Act, which would impose a broad acquisition ban on covered “large institutional investors.”

KEY TAKEAWAYS

• The 21st Century ROAD to Housing Act (the Act) prohibits large institutional investors from acquiring most single-family homes in the United States, with specific exceptions.
• The Act defines “large institutional investor” as entities with investment control of 350 or more single-family homes, capturing a broad spectrum of ownership structures.
• Several exceptions permit continued institutional activity in new construction, renovation, and certain homeownership programs.
• Homes owned pre-enactment are not subject to divestment.
• The final impact will depend on forthcoming regulations, and companies should assess their compliance strategies for current and future acquisitions.

The Act would limit institutional investment in existing US single-family residential rental housing, subject to stated exceptions. The Act, awaiting the president’s signature, contains 10 other provisions relating to housing affordability measures and does not provide funding for the initiatives. Separately, the US Congress appended to this housing bill a ban on the issuance of a central bank digital currency by the Federal Reserve, a prohibition that sunsets on December 31, 2030.

LEGISLATIVE UPDATE

On January 20, 2026, President Donald Trump signed Executive Order 14376, which provides that it is the policy of the president’s administration that “large institutional investors should not buy single-family homes that could otherwise be purchased by families.” Among other things, Executive Order 14376 instructed the secretary of the Treasury to develop definitions of “large institutional investor” and “single-family home.”

Passed by Congress on June 23, 2026, the Act would prohibit any large institutional investor (LII) from purchasing or contracting to purchase (directly or indirectly) any single-family home, subject to enumerated exceptions, as of the date of enactment. The bill defines “LII” broadly to include for-profit entities engaged in owning, renting, or managing single-family homes that, alone or in concert with others, have investment control of 350 or more single-family homes, with attribution rules capturing control through ownership, general partner or managing member status, or investment manager or adviser roles.

“Single-family home” is defined to mean a structure containing two or fewer dwelling units intended for residential occupancy by a single household, excluding manufactured homes. In addition, the bill defines “purchase” to include any transfer or acquisition of a single-family home through merger, acquisition, or bulk purchase.

The enumerated exceptions allow LIIs to purchase single-family homes that are acquired:

• by an LII as newly constructed, renovated, or a rental conversion for sale and not as a residence rented pending sale;
• pursuant to a build-to-rent (BTR) program where the LII purchases newly constructed single-family homes to be managed as rental properties;
• pursuant to a renovate-to-rent program that (1) substantially rehabilitates homes that do not meet elements of local building codes and (2) requires making improvements to the single-family home in an amount not less than 15% of its purchase price;
  • pursuant to a rent-to-own “homeownership program” that (1) requires rent and other fees that are in line with the relevant market, (2) is legally treated as a consumer credit transaction secured by real property (meaning existing consumer credit laws apply), (3) provides that rental payments are reported to credit bureaus (if the tenant agrees), and (4) requires the LII to contribute “meaningful” financial support to the tenant to acquire the home (including price concessions);
• pursuant to a homeownership program or program to “boost” homeownership established by the LII that (1) provides for positive credit reporting of rental payments to consumer reporting agencies for any renter that opts into such reporting, (2) gives the tenant a right of first refusal and a 30-day first look exclusive period if the LII decides to sell the home, and (3) “may entail” meaningful financial support from the LII to the renter for the purchase of the rented home or an entirely different home;
• in satisfaction of legitimate debt collection or repossession;
  • by a lender or mortgage servicer for the purposes of loss mitigation, but not as a long-term strategy;
• from another LII that either owned the single-family home on the date of enactment of the Act or purchased the single-family home in compliance with the Act; and
  • from an investor not covered under the Act, so long as the purchase occurred not more than two years after the effective date of the Act.

Notably, the Act does not require the LII to divest or otherwise sell any single-family home that it purchased prior to the date of enactment of the Act.

The Act also authorizes the secretary of the Treasury, in consultation with the secretary of Housing and Urban Development, the director of the Federal Housing Administration, and the chair of the Securities and Exchange Commission, to issue regulations to carry out these provisions with a mandate to consider market-disruption mitigation while also limiting the ability to alter key statutory definitions and thresholds.

ANALYSIS

The final regulations implementing the Act will determine whether the institutional investment in the scattered site single-family rental market is merely limited or severely curtailed. LII investment restrictions are part of a broader set of interventions made by the Act across the residential housing market, including provisions to streamline housing development, boost small-dollar mortgage lending by FHFA, raise the cap on certain financial institution public welfare investments from 15% to 20%, and establish a pilot program to convert abandoned commercial or industrial buildings into attainable housing.

The Act also requires public reporting by the Consumer Financial Protection Bureau on loan-originator compensation and how it affects the availability of small-dollar mortgages, requires federal housing agencies to share research and market data and report to Congress on ways to reduce housing affordability and construction inefficiencies, and requires new disclosures to inform military veterans of the VA Home Loan program.

On June 24, 2026, President Trump postponed a planned signing ceremony, stating on social media that it would be delayed pending congressional action on the SAVE America Act. House Speaker Mike Johnson indicated after meeting with the president that he expects the bill to become law.

On June 29, the Act was formally presented to President Trump, who now has 10 days (excluding Sundays) from presentment to sign the bill. If he takes no action within that window and Congress remains in session, the bill becomes law without his signature.

NEXT STEPS

LIIs will have opportunities to continue to invest in the single-family housing market under the exceptions determined by Congress in the Act. Ensuring the actions are consistent with the exceptions will allow LIIs to comply with the Act and provide a record in support of broadened exceptions in the future.