After a tumultuous eight months of debate and several rounds of amendments, the “ROAD to Housing Act”, H.R. 6644[1], is now law as of July 11, 2026. The clarity provided by the final legislation—which does not include the divestment provision floated in the earlier Senate version—opens the door for build-to-rent projects to get back on track. Most relevant to institutional investors is Section 1001, titled “Home-Ownership for Main Street America” (the “Act”), which regulates “large institutional investors” and prohibits “large institutional investors” from acquiring more than 350 properties except for specific exclusions including build-to-rent projects.  

Who is regulated by the Act?

Section 1001 regulates “large institutional investors.” A “large institutional investor” means “an investment fund, corporation, general or limited partnership, limited liability company, joint venture, association, or other for-profit entity [] that:

• is engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes; and
• alone or in concert with 1 or more other entities, beginning after the date of enactment of the Act, directly or indirectly has investment control of not less than 350 single-family homes in the aggregate, not including any single-family home purchased in an exception made after the date of enactment of the Act.

An entity has direct or indirect investment control over a single-family home if the entity:

• owns, or has primary authority or fiduciary responsibility to make material investment or management decisions relating to, the single-family home;
• is, or directly or indirectly controls, the general partner or managing member of the entity that owns the single-family home;
• is or controls the investment manager, management company, or investment advisor of the entity that owns the single-family home;
• owns or controls more than 25% of any class of equity interests of the entity that owns the single-family home, unless such entity is a passive investor; or
• otherwise controls the entity that owns the single-family home.

What is required of “large institutional investors”?

Limitation on Acquisition of Single-Family Homes (including duplexes)

After the effective date, on January 7, 2027, a “large institutional investor” may not “purchase” (read acquire), or enter into a contract to directly or indirectly purchase any “single-family home”—defined as a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household, but does not include manufactured homes. 

“Purchase” is broadly defined by the Act and includes “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.” 

However, the restriction on purchases by large institutional investors does not apply to any “excepted purchase.”  Those exceptions include, among others, purchases of single-family homes that are:

• newly constructed, renovated, or a rental conversion for sale by a large institutional investor and not as a residence rented pending sale;
• pursuant to a build-to-rent program where the large institutional investor purchases, constructs, or constructs and retains a newly constructed single-family homes to be managed as a rental property, whether as part of a community made up exclusively of renter-occupied single-family homes or as part of a community made up of single-family homes that are both owner- and renter-occupied;
• purchases from another large institutional investor that owned or purchased the property in compliance with the Act; and
• properties acquired by a lender or mortgage servicer through lawful foreclosure.

The full list of “excepted purchases” is included at the end of this article.  A transaction is also an “excepted purchase” if it is a combination or series of purchases which are each an excepted purchase.  The purchase restriction also does not apply to any transaction that is a 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” July 11, 2026. 

Notice to Renters of Renter Outreach Resources

The Act establishes a new “Renter Outreach Resource” within HUD which will provide a toll-free telephone number and a public website designed to assist renters of residential properties that are owned by “large institutional investors.”  HUD will “promptly process and investigate” any disputes or complaints submitted through the “Renter Outreach Resource” which could include referral to other federal agencies and/or requesting information from the large institutional investor about the dispute.

Each large institutional investor must provide each of their renters with written notice about the Renter Outreach Resource and written notice of the name, phone number, and email address of the person or entity responsible for receiving and addressing renter disputes for the large institutional investor.  Such notice must be provided at the time the renter first occupies the home and annually thereafter.  Any changes to the contact information for the person responsible for receiving and addressing renter disputes must be provided to the renter within 30 days after the change.

If the large institutional investor maintains a public website that is accessible by such renter, it must prominently feature information about the Renter Outreach Resource. 

Annual Notification to the Secretary of Housing and Urban Development

By January 7, 2027, a large institutional investor must submit a notification to the Secretary of Housing and Urban Development and an annual notification by December 31^st of each following year. The notification must (1) include a statement of whether the owner is a “large institutional investor” and (2) identify how many single-family homes (including duplexes but excluding manufactured homes) the large institutional investor has direct or indirect investment control of as of the date of the notice.  The notice must include the city and State where each single-family home is located, unless the large institutional investor owns 10 or fewer single-family homes in that city.

Unfortunately, there is some ambiguity with respect to the specifics of how single-family homes will be reported, particularly regarding passive investors.

The Act authorizes the Secretary of the Treasury to implement regulations to carry out the requirements of the Act and to mitigate negative impacts on consumers and communities.  Institutional investors should continue to monitor for guidance and/or regulations clarifying the reporting requirements.

What are the penalties?

The provisions of the Act are enforceable by an action by the Attorney General or Secretary of State for a per violation civil penalty of the greater of $1,000,000 or 3 times the purchase price of the property involved. 

When is the Act effective?

The requirements of the Act will become effective on January 7, 2027—180 days after its enactment.  The prohibitions against purchases are subject to a 15-year sunset provision and would expire on December 20, 2041, unless extended.

Next Steps

Institutional investors should continue to monitor guidance or proposed regulations from the Secretary of the Treasury clarifying the passive investor exception and reporting requirements.

Entities should be aware of newly introduced legislation regarding ownership of single-family homes at the federal and state levels.  Although there is no assurance that new bills will gain traction in Congress or ultimately be passed, early awareness of legislation is crucial.  

On the heels of the ROAD to Housing Act, legislation was introduced on July 13, 2026—the Protecting American Homes from Hedge Funds Act, H.R.9657—which would impose a tax penalty equal to 50% of the fair market value of the single-family home (1-4 unit residential property) on newly purchased properties and on properties owned above the “maximum permissible units” set by the bill (which essentially imposes a 10-year divestment requirement). 

State legislatures, including in California, Georgia, Minnesota, North Carolina, and New York, have also explored or introduced various constraints on institutional ownership of single-family homes with proposals ranging from acquisition or ownerships caps, to enhanced ownership transparency and reporting, or registration requirements.  

As always, Hunton stands ready to help you navigate these and other regulatory challenges.

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List of Excepted Purchases

The term “excepted purchase”' means any purchase of a single-family home that is:

• newly constructed, renovated, or a rental conversion for sale by a large institutional investor and not as a residence rented pending sale;
• pursuant to a build-to-rent program where the large institutional investor purchases, constructs, or constructs and retains a newly constructed single-family homes to be managed as a rental property, whether as part of a community made up exclusively of renter-occupied single-family homes or as part of a community made up of single-family homes that are both owner- and renter-occupied;
• pursuant to a renovate-to-rent program that (i) substantially rehabilitates single-family homes that do not meet structural or core system elements of local building codes; and (ii) makes improvements in an aggregate dollar amount of not less than 15% of the purchase price of the single-family home;
• pursuant to a homeownership program that requires rental payments and any other fees that are not greater than those collected by the large institutional investor on other similarly situated single- family homes not covered by the eligible homeownership program; is subject to a contract between the large institutional investor and renter that shall be considered a consumer credit transaction secured by a dwelling or real property; provides for positive reporting of rental payments to consumer reporting agencies for any renter, who shall be informed of and opts into such reporting; and requires contribution of meaningful financial support from the large institutional investor, including price concessions, for the purchase of the single-family home by the renter;
• pursuant to a program to boost homeownership that (i) provides for positive reporting of rental payments to consumer reporting agencies for any renter, who shall be informed of and opts into such reporting; (ii) provides for the right of first refusal and a 30-day ‘‘first look’’ period; and (iii) may entail the meaningful financial support from the large institutional investor, including price concessions, for the purchase of a single-family home by the renter (whether it is the home the renter occupies or another home);
• in connection with the satisfaction of debts previously contracted in good faith and where the large institutional investor has the right to repossess the single-family home under such contract;
• undertaken by a mortgage servicer, lender, or other entity that has a legal right to a single-family home, for the purpose of loss mitigation or compliance with servicing or investor obligations, and not as a long-term investment strategy, and is solely as a result of— (i) a foreclosure; (ii) a deed-in-lieu of foreclosure; (iii) enforcement of a mortgage, deed of trust, or other security interest; or (iv) operation of law following borrower default;
• purchased from another large institutional investor that either owned the single-family home on the date of enactment of this Act or purchased the single-family home in compliance with this section;
• purchased from an investor not covered under this section, so long as the purchase occurred not more than 2 years after the effective date of the Act; or
• newly constructed, renovated, or a rental conversion that is intended and operated for occupancy as part of a community for households with 1 or more members aged 55 years or older, and satisfies visitability standards established by the Secretary of Housing and Urban Development.

[1] The full text of the legislation is available here: H.R.6644 - 119th Congress (2025-2026): 21st Century ROAD to Housing Act | Congress.gov | Library of Congress.