New federal legislation, the 21st Century ROAD to Housing Act, now restricts large institutional investors owning 350 or more single-family homes from acquiring additional properties. The law took effect July 11 without President Donald Trump's signature.
This legislation marks a significant federal intervention aimed at increasing housing affordability and accessibility for individual homebuyers by limiting the purchasing power of large institutional investors in the single-family housing market.
A significant federal housing package, the 21st Century ROAD to Housing Act, has officially become law, taking effect on July 11 without President Donald Trump's signature. The legislation, championed by Senator Raphael Warnock, aims to curb the expansion of large institutional investors into the single-family housing market.
The core provision of the act prohibits entities that own or control a minimum of 350 single-family homes from acquiring any additional properties. This restriction encompasses various transaction types, including purchases, transfers, mergers, and bulk acquisitions. However, it does not mandate the sale of homes already held by these investors prior to the law's enactment.
The ROAD Act includes several carve-outs, allowing institutional investors to continue acquiring newly constructed homes through build-to-rent developments, substantially rehabilitated properties via renovate-to-rent programs, and homes acquired through specific lease-to-own and homeownership initiatives. Other exceptions cover properties obtained through foreclosure, certain age-restricted communities, and transactions involving homes already owned by other institutional investors under defined conditions.
This new law builds upon a January executive order from President Trump that sought to limit the role of large institutional investors in the single-family housing market. While the executive order focused on federal housing programs and called for legislative action, the ROAD Act codifies these policies into statutory limits on future purchases.
Beyond investor restrictions, the broader housing legislation encompasses provisions designed to boost housing supply, reform rural housing programs, incentivize local governments and financial institutions to invest in housing construction, and provide grants for home repairs and weatherization. It also includes measures to penalize local governments that do not meet their housing goals.
Additionally, the package incorporates Senator Warnock's Appraisal Modernization Act, intended to foster greater fairness in the home appraisal process. The law arrives amid ongoing debate about the impact of institutional investors on housing affordability, with Warnock's office highlighting that corporate investors own a substantial portion of single-family rental homes in the Atlanta metro area, exacerbating competition for prospective homebuyers.