Housing Legislation Banning Large Institutional Investors from Purchasing Single-Family Homes Becomes Law

On July 11, 2026, the 21st Century ROAD to Housing Act (the “ROAD Act”) became law. The landmark housing legislation, which was backed by strong bipartisan support, notably prohibits large institutional investors (“LIIs”) from purchasing single-family homes (“SFHs”).

On June 23, 2026, the House of Representatives passed the bill by a vote of 358 to 32. The Senate passed the legislation the day before by a vote of 85 to 5. On June 29, 2026, the House delivered the bill to the White House.

Although the White House issued two Statements of Administration Policy—one for Senate amendments and one for House amendments—supporting different iterations of the bill, following congressional approval, the president decided that he would not sign the bill due to the fact that the Senate has not passed the Save America Act. As the president did not issue a veto within 10 days of the House’s delivery, the bill became law.

The 21st Century Road to Housing Act

The ROAD Act includes 11 separate titles focused on a wide range of reforms to increase the supply of affordable housing in the United States. This Legal Update highlights Title X, “Home-ownership for Main Street America,” which consists of Section 1001, “Homes are for people, not corporations.”

Under Section 1001, the ROAD Act prohibits any LII from purchasing (directly or indirectly) any SFH, which is defined as a structure with two or fewer units that are intended for residential occupancy by a single household (and is not a manufactured home). There are two exceptions to this prohibition: for “excepted purchases,” and for purchases in connection with restructuring or reorganizing the ownership of an SFH owned or purchased pre-enactment. The Road Act does not require an LII to sell any SFH purchased before enactment. Significantly, the prohibition self-terminates 15 years following enactment.

What is considered an LII?

The ROAD Act defines an LII as an investment fund or other for-profit entity (no matter how it is structured) that (1) is in the business of investing in, owning, renting, managing, or holding SFHs, and (2) after enactment, directly or indirectly has investment control (alone or in concert with others) of not less than 350 SFHs. Any excepted purchase made after enactment does not count toward this total, and LIIs are not prohibited from making any excepted purchase.

An entity is considered to have direct or indirect investment control if it: (1) owns or has primary authority to make material investment or management decisions related to the SFH; (2) is or controls the general partner or managing member of the entity that owns the SFH; (3) is or controls the investment manager, management company, or investment advisor of the entity that owns the SFH; (4) owns or controls more than 25% of the entity that owns the SFH (unless the entity is a passive investor); or (5) otherwise controls the entity that owns the SFH.

What is an excepted purchase?

An excepted purchase is any purchase of an SFH that is:

• Newly constructed, renovated, or a rental conversion for sale by an LII and is not a rented residence pending sale.
• Part of a build-to-rent program in which the LII purchases or constructs newly constructed SFHs to manage as rental properties.
• Part of a renovate-to-rent program that (1) substantially rehabilitates SFHs that do not meet certain local building codes, and (2) makes improvements costing not less than 15% of the purchase price.
• Part of a homeownership program that: (1) requires rent and fees to be no greater than those collected by the LII on similar SFHs that are not part of the program; (2) is subject to a contract with the renter that is considered a consumer credit transaction secured by the dwelling or real property; (3) provides for positive reporting of rental payments to consumer reporting agencies; and (4) requires the contribution of “meaningful” financial support from the LII, including price concessions, for the renter to purchase the SFH (although “meaningful” is not defined).
• Part of a program to boost homeownership that: (1) provides positive reporting of rental payments for any renter who opts into reporting; (2) provides a right of first refusal and 30-day “first look” period; and (3) may include “meaningful” financial support, including price concessions, for the renter to purchase an SFH (whether it be the home the renter occupies or another home).
• In connection with repossession of the SFH to satisfy a debt.
• By a mortgage servicer, lender, or other entity related to loss mitigation or compliance with servicing or investor obligations related to foreclosure, deed-in-lieu, enforcement of security interest, or borrower default.
• Purchased from another LII that either owned the SFH at enactment or purchased the SFH in compliance with Section 1001.
• Purchased from an investor not covered by Section 1001, as long as the purchase is less than two years after the effective date of the legislation.
• Newly constructed, renovated, or a rental conversion that is intended for occupancy as part of a community of households with one or more members aged 55 years or older.
• Made through a single purchase or a combination of the above excepted purchases.

No requirement to dispose certain SFHs

As enacted, the ROAD Act does not require LIIs to dispose of SFHs. Prior to amendment, LIIs would have been required to sell SFHs purchased under certain excepted purchase exemptions to an individual homebuyer no later than seven years after the date of purchase.

Annual notification of status as LII

The ROAD Act requires that each year, each person that satisfies the definition of an LII notify the Secretary of Housing and Urban Development (“HUD”) whether such person is an LII and how many SFHs the LII has direct or indirect investment control as of the date of such notice, along with the city and state where each SFH is located (unless the LII owns 10 or fewer SFH in such city).

Renter outreach program

The ROAD Act requires the Secretary of HUD to establish a renter outreach resource designed to assist renters of residential properties owned by LIIs in notifying federal agencies about disputes relating to the rental of such properties (including Federal law violations), sharing information about such disputes with other Federal agencies, and monitoring and resolving such disputes. The ROAD Act further requires the Secretary of HUD to provide renters who provide information about a potential violation of state law with contact information for the state-specific authority authorized to investigate such information.

In addition, LIIs are required to provide each of their renters with a written notice at first occupancy and annually thereafter about the renter outreach resource and the name, phone number, and email address of the person responsible for receiving and addressing renter disputes for the LII (along with updates as needed).

Enforcement

An LII that purchases SFHs in violation of the ROAD Act is subject to a civil penalty in an amount that is not more than $1,000,000 per violation, or three times the purchase price of the property involved, whichever is greater.

Rulemaking

The ROAD Act empowers the Secretary of the Treasury, in consultation with the Secretary of HUD and the Chair of the Securities and Exchange Commission, to promulgate regulations to carry out the purposes of Section 1001. This includes enacting regulations to minimize market disruptions and to minimize negative impacts on consumers. The regulations, however, are not permitted to alter the scope or type of excepted purchases to undermine the number of SFHs available to individuals, add any category of LII as an eligible class, or alter the quantitative threshold in the definition of LII.

Effective date

The prohibition and enforcement provisions take effect 180 days after enactment, and the prohibition is automatically repealed 15 years after the effective date.

Next Steps

We expect the Secretary of the Treasury to promptly begin rulemaking to implement the ROAD Act in an effort to issue rules prior to the bill’s prohibition becoming effective 180 days after enactment. We will monitor the rulemaking process and will provide updates on key developments.