21st Century ROAD to Housing Act is Law: Impact on Large Institutional Investors

On July 11, 2026, H.R. 6644, the “21st Century Revitalizing Opportunities in the American Dream to Housing Act” (Act) automatically became law after no action was taken by President Trump within the required timeframe. The Act is a landmark piece of federal housing legislation with significant implications for large institutional investors in the single-family housing market. The Act has undergone significant revisions, and many controversial provisions related to large institutional investors have been modified. The Act will be effective 180 days after enactment, and will currently sunset 15 years after the effective date.

Notably, build-to-rent projects are now exempt as a qualifying excluded purchase under the Act, and the previously proposed seven-year divestment requirement has been eliminated from the final version of the Act. Ownership projects are also exempt, but the conversion of a rental project to for-sale would require multiple compliance steps to protect existing renters, including “meaningful financial support” for those renters, which could be mandatory.

IMPACT ON LARGE INSTITUTIONAL INVESTORS

Section 1001 of the Act, titled “Homes Are for People, Not Corporations,” establishes a federal prohibition on the purchase of additional single-family homes by large institutional investors, as those terms are defined below, unless the purchase is excepted under the Act.

Relevant definitions include:

• Large Institutional Investor: Any for-profit entity or business arrangement that is a legal entity (i) engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes; and (ii) alone or in concert with one or more other entities, directly or indirectly has investment control (as defined) of 350 or more single-family homes in the aggregate.
• Purchase: Any purchase, transfer, or other acquisition of a single-family home, including through mergers, acquisitions, construction, foreclosures, or bulk purchases, whether or not for cash consideration.
• Single-Family Home: A structure containing two or fewer dwelling units intended for residential occupancy, excluding manufactured homes. This could be interpreted to include townhomes, particularly if they are individually plotted.
• Investment Control: If an entity owns the single-family home; has primary authority or fiduciary responsibility to make material investment or management decisions; is or controls the general partner or managing member; is or controls the investment manager or advisor; owns or controls more than 25% of any class of equity interests of the entity that owns the single-family home (unless the entity is a passive investor); or otherwise controls the owner entity. 

EXCEPTED PURCHASES

The purchase prohibition does not apply to the following excepted purchases:

• Build-to-rent programs involving newly constructed single-family homes managed as rentals, whether as part of a community made up exclusively of renter-occupied single-family homes or as part of a community made up of both owner- and renter-occupied homes.
• Newly constructed, renovated, or rental-conversion properties for sale (not as a residence rented pending sale).
• Renovate-to-rent programs that substantially rehabilitate single-family homes not meeting structural or core system elements of local building codes, with improvements of at least 15% of the purchase price.
• Homeownership programs that: (i) require rental payments and fees not greater than those collected by the large institutional investor on similarly situated homes; (ii) are subject to a contract treated as a consumer credit transaction secured by a dwelling or real property; (iii) provide for positive rental payment reporting to consumer reporting agencies (with renter opt-in); and (iv) require “meaningful financial support” from the large institutional investor, including price concessions, for the renter’s purchase of the single-family home.
• Programs to boost homeownership providing: (i) positive rental payment reporting to consumer reporting agencies (with renter opt-in); (ii) right of first refusal and a 30-day “first look” period; and (iii) optionally, “meaningful financial support” from the large institutional investor for the renter’s purchase of a single-family home (whether the home the renter occupies or another home).
• Debt satisfaction situations where the large institutional investor has a contractual right to repossess the single-family home.
• Loss mitigation or servicing compliance acquisitions by mortgage servicers, lenders, or other entities with a legal right to a single-family home, solely as a result of foreclosure, deed-in-lieu of foreclosure, enforcement of a security interest, or operation of law following borrower default (and not as a long-term investment strategy).
• Purchases from other large institutional investors that owned the single-family home on the date of enactment of the Act or purchased it in compliance with the Act.
• Transitional purchases from non-covered investors, provided the purchase occurs within two years after the effective date of the Act.
• Senior housing projects that are newly constructed, renovated, or rental conversions intended and operated for occupancy by households with one or more members aged 55 years or older and satisfy specified HUD standards.
• Any of the purchases described above whether purchased through a single purchase or combination or series of purchases.
• The prohibition also does not apply to any purchase of a single-family home in connection with a restructuring or other reorganization of ownership of single-family homes that were owned or purchased on or before the Act’s enactment.

HUD REPORTING REQUIREMENTS

The Act provides that large institutional investors must notify HUD within 180 days of enactment and by December 31st of each year thereafter: (i) confirming of their status as a large institutional investor and (ii) identifying the number of single-family homes under their direct or indirect investment control, organized by city and state (with an exception for cities where they own 10 or fewer single-family homes).

ENFORCEMENT AND IMPLEMENTATION

Section 1001 imposes civil penalties of up to $1 million per violation or three times the purchase price involved, whichever is greater. The civil penalties would be transferred to HUD for homeownership expansion activities.

HUD may issue additional regulations to implement the Act, including regulations to minimize market disruptions and mitigate negative impacts to the housing market, consumers, and communities.

IMPLICATIONS

The restrictions on large institutional investors are not retroactive. There is also no requirement to dispose of or otherwise sell any single-family home. Therefore, current portfolios are not affected by the Act. Any purchase of additional single-family homes by large institutional investors after the Act is effective (180 days after enactment) would need to qualify for an exception under the Act, which is open to interpretation by HUD and reviewing courts.

Please contact us with any questions about the Act and its implications.