Treasury Proposes Initial ROAD to Housing Act Rules for Institutional Investors

Executive Summary

On October 23, 2026, the Department of the Treasury (Treasury) published a notice of proposed rulemaking containing proposed rules (the Proposed Regulations) to carry out the purposes of Section 1001 of the 21st Century ROAD to Housing Act (the Act), which was enacted in July 2026. Beginning January 7, 2027, the Act generally prohibits large institutional investors (LIIs) from purchasing (or contracting to directly or indirectly purchase) single-family homes, subject to exceptions. The Proposed Regulations are not final and are currently in a one-month comment period. Comments are due November 23, 2026. (Act § 1001(b), (f); Notice of Proposed Rulemaking (NPRM), Summary, Dates and § I.A, 91 Fed. Reg. 66799.)

For further background, see our July 13, 2026, client alert “21st Century ROAD to Housing Act: Insights on the Impact to Institutional Investment in the Single-Family Residential Rental Market.”

Treasury’s Phased Rulemaking Approach

Per Treasury’s commentary to the Proposed Regulations, Treasury intends to take a phased rulemaking approach in light of the short implementation period (180 days) before the Act becomes effective on January 7, 2027. In this first phase of proposed rulemaking, Treasury stated that it focused “on issues that Treasury believes would be beneficial to address as soon as possible to provide clarity and minimize market disruption.” Treasury expects to consider further rulemaking on other excepted-purchase categories, compliance procedures, reporting, recordkeeping, and enforcement. The commentary in the Proposed Regulations does not set forth a timetable for those later phases (NPRM § I.C.).

Brief Overview of Key Proposed Implementing Rules

This first phase of Proposed Regulations addresses selected definitions under the Act, purchase exceptions, and penalty calculations. At a high level, it would provide implementation parameters for certain “excepted purchases” under the Act, including (i) program-based exceptions (the build-to-rent program, the renovate-to-rent program, the homeownership program, and the program to boost homeownership), (ii) debt-satisfaction and loss-mitigation excepted purchases, and (iii) LII-to-LII transfers. The Proposed Regulations would also clarify how to determine whether an entity is “in the business of” investing in, owning, renting, managing, or holding single-family homes; whether an entity is a “passive investor” (for purposes of determining whether an entity qualifies as an LII); and how the civil penalty would be calculated if more than one LII is involved in the same purchase that violates the Act. Given that the Proposed Regulations remain subject to public comment and may be modified by Treasury prior to final adoption, we have not provided a summary of the Proposed Regulations in this alert. However, please reach out to your Goodwin contact if you have questions regarding the Proposed Regulations.

Important Provisions of the Act Not Addressed by Proposed Regulations

These initial Proposed Regulations do not address certain key provisions in the Act, leaving significant implementation matters for later guidance or rulemaking, including the form and manner of HUD reporting requirements (for which initial reports are due January 7, 2027, and by December 31 of each year thereafter), the renter outreach resource, compliance and recordkeeping procedures, and other statutory excepted purchases not addressed in this phase of the Proposed Regulations. Market participants should monitor further Treasury and HUD guidance (Act § 1001(c)(5), (c)(8); NPRM §§ I.B–I.C.).

Key Dates and the Rulemaking Process

Comments: Treasury must receive comments by November 23, 2026, and encourages electronic submission through regulations.gov. Submissions should be captioned “Restrictions on Large Institutional Investor Purchases of Single-Family Homes.” (NPRM, Dates and Addresses.)

Finalization: The Proposed Regulations do not specify when a final rule will be issued. Market participants should not assume final regulations will be in place by January 7, 2027, or that the Proposed Regulations will be adopted in their current form without modifications. However, the statutory effective date (January 7, 2027) for the prohibition on purchases by LIIs, the civil penalties for violations of such prohibition, and the reporting to HUD is not conditioned on final regulations being adopted (Act § 1001(c)(8), (f); NPRM §§ I.A–I.C.). Market participants should consider the portions of the Proposed Regulations that may impact their activities while also continuing to prepare for compliance with the provisions of the Act.