House Revises SFR Purchase Ban
May 19, 2026
Chairman French Hill and Ranking Member Maxine Waters released an amendment late last Wednesday to the version of the 21st Century ROAD to Housing Act, which passed out of the Senate in March. The housing bill includes changes to the large institutional investor ban on single-family rental purchases.
- Click here for the amended bill text.
- The SFR provision is on page 287 and found in Title X Section 1001 and entitled the Home-Ownership for Main Street Act.
- The House plans to vote on the bill this Wednesday using the suspension calendar, which will require a 2/3 majority.
Why it matters: The Committee incorporated many CREFC members’ concerns in the updated language while still delivering on President Trump’s demand to limit SFR.
Key revisions include
- Eliminating the 7-year build-to-rent (BTR) divestment provision,
- Narrowing the single-family home definition to be less expansive.
- However, there is a new federal Renter Outreach complaint process that would require HUD to accept and track complaints of all large, institutional investors.
Go deeper: The general structure of the ban is the same with a blanket large institutional investor purchase prohibition and several exemptions.
A few key points include:
- Prohibition: The general purchase prohibition is similar to the Senate’s version, but there is a listed exception that grandfathers any restructure or reorganization of homes owned prior to the enactment. There is also a rule of construction that says nothing in the bill is intended to require divestment or selling homes purchased before the date of enactment.
- Effective Date: 180 days after enactment. 15-year sunset (same as Senate)
- Covered Single Family Home (SFH) Definition: The definition is narrower than the Senate bill and would seem to solve concerns around multiple home on a single parcel.
- The definition now explicitly exempts:
- Property comprised of multiple rental homes or units that cannot be legally sold without subdividing the property
- Homes, when occupied, that have always been occupied by a renter
- Homes owned for less than 365 days
- Rented by military personnel
- Homes under an active first-look period for HUD
- Rented by bedroom occupancy
- Manufactured homes [this was exempted in the Senate bill too]
- Large Institutional Investor (LII) Definition: The definition tracks the Senate one with 350 or more homes owned by for-profit companies, directly or indirectly, after the date of enactment. Government, nonprofits, and community land trusts are excluded.
- Investment Control: There is a more detailed definition of investment control and a test for a passive investor. This section will require more analysis on its impact. Property management or owning a fractional interest of an LII are not to be construed as investment control.
- Excepted Purchases: Like the Senate bill, the House exempts several SFH purchases that would not count toward the 350. The House language seems to more clearly exempt activities not targeted by the purchase ban. The exemptions include:
- Build-to-Rent: Owner purchases, constructs, or constructs and retains a newly constructed covered SFH to be managed as a rental property. Communities of all rental or mixed rental and ownership are covered. There is not a divestment mandate.
- Grandfathering Clause: Purchased from other LII owned at date of enactment or purchased through exempted purchase. This is a much cleaner grandfathering clause, as the Senate bill had a two-year time limit on some purchases.
- Contiguous Community: Acquired as part of a community of five or more contiguous units
- Planned Rental Community: Planned, permitted, financed, and constructed as part of a united rental community on a single platted, parcel, where an owners or affiliate operates as single rental facility and the individual structures are not offered for sale.
- New construction, renovated for sale or rental conversion for sale and not as a residence rented pending sale
- Renovate to Rent Program: The House version has less restrictive standards.
- Pursuant to Home Ownership Program
- Acquired as part of debt previously contracted in good faith
- Undertaken by a mortgage servicer or lender that has a legal right to purchase.
- Newly constructed 55+ housing
- Disability care, community-based services approved by Medicare/Medicaid
- Any combination of the above purchases.
- Regulation and Rulemaking: The bill has a much narrower mandate for regulation than the Senate version. HUD, FHFA, SEC, and Treasury are charged with rulemaking along several parameters.
- New Federal Rental Outreach Resource: HUD to establish renter outreach resources for LII renter disputes. HUD will establish procedures to investigate and provide LII owners with complaint information. While LII do not have to respond, they do have to provide their renters with initial and annual written notices to renters about the program and identify who the LII point of contact for disputes.
What they’re saying: Key Senate leaders including Majority Leader John Thune (R-SD), Senate Banking Committee Chairman Tim Scott (R-SC), and Ranking Member Elizabeth Warren (D-MA) continue to call for the House to pass the Senate version.
- White House staff and HUD Secretary Turner did not reject the House bill, but offered feedback on technical amendments, which the House made.
- President Trump has not yet weighed in on the bill directly, though House leaders have highlighted how the updated SFR language aligns with the January 20 Executive Order on the issue.
What’s next: The House will plan to vote on Wednesday, and it is unclear when or if the Senate will take up the bill. Additional intervention from Trump could shift action on the issue.
Contact David McCarthy (dmccarthy@crefc.org) with questions.