The U.S. Department of the Treasury has proposed rules to implement the 21st Century ROAD to Housing Act, which restricts large institutional investors from purchasing additional single-family homes. The proposed restrictions are scheduled to take effect January 7, 2027, and generally apply to investors that control at least 350 single-family homes.
The proposal outlines exceptions for build-to-rent (BTR) and renovate-to-rent strategies. BTR acquisitions would be limited to newly constructed homes that have never been owner-occupied and are purchased within 18 months of completion. For renovate-to-rent properties, investors would need to acquire homes that fail key building code standards and spend at least 15% of the purchase price, excluding land, on improvements.
The rules also address programs designed to help renters transition to homeownership. Eligible renters would receive 30 days to make an offer before an investor could market the property to other buyers. Treasury also proposes guidelines for qualifying financial assistance, including a safe harbor of up to $5,000 for renters who have lived in a home for at least five years.
Additional provisions clarify which investors fall under the restrictions, including how passive minority investments in funds are treated. Certain foreclosure-related sales and transactions involving homes already owned by large investors would remain permitted.
The proposal marks the first phase of Treasury's planned rulemaking to implement the law. Public comments are due 30 days after its scheduled October 23, 2026, publication in the Federal Register. The National Association of Realtors is reviewing the proposal and plans to provide further updates.
The proposed rules could have significant implications for institutional single-family rental operators and build-to-rent developers, particularly regarding acquisition strategies, development timelines, and compliance requirements as the new restrictions approach.
Source: National Association of Realtors
