350-Home Investor Ban: Who Is Covered, Who Isn't (Treasury Rule)

Who is covered, and who is not

Most coverage of this law is written for the institutions. The reader of this page is more likely a landlord with a handful of rentals or a flipper doing a few projects a year, so the first question is whether the law touches you at all. The statute’s own definition answers it.

“Large institutional investor” in section 1001(a)(3) means an investment fund, corporation, partnership, limited liability company, joint venture, association or other for-profit entity that (I) is engaged, in whole or in part, in the business of investing in, owning, renting, managing or holding single-family homes, and (II) alone or in concert with one or more other entities, directly or indirectly has investment control of not less than 350 single-family homes in the aggregate. Homes bought in an excepted purchase after enactment do not count toward the 350. Treasury’s own summary of the definition, in the rule’s cost section, is “a for-profit entity engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes” that has investment control of at least 350 of them.

The statute then says what counts as “investment control”: owning the home or having primary authority or fiduciary responsibility to make material investment or management decisions about it; being or controlling the general partner or managing member of the owning entity; being or controlling its investment manager, management company or investment advisor; owning or controlling more than 25% of any class of equity interests of the owning entity “unless such entity is a passive investor”; or otherwise controlling it.

Who the statute reaches and who it leaves alone (our reading of section 1001 and the proposed rule)

Two limits on that table. Treasury says it has no number for the covered population: “Reliable data are not currently available regarding how many institutional investors and other entities may be affected.” And the “in concert” wording means that two small investors who coordinate through shared control could be added together; the statute does not define the term and the proposed rule does not either. If your structure includes outside capital, ask counsel about your own facts.

The duplex and manufactured-home lines

Section 1001(a)(5) defines a single-family home as “a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household” and says it “does not include a manufactured home.” A duplex is therefore a single-family home for the 350 count and for the ban; a three-unit building and a manufactured home are not.

What the proposed rule decides, and what it leaves open

Treasury published the proposal on October 23, 2026 as the first phase of a planned sequence: it says it “currently intends to take a phased rulemaking approach” and expects possible later rulemakings on other excepted-purchase categories, compliance procedures, reporting and recordkeeping, and enforcement. The statute also says no regulation may alter the quantitative threshold in the definition of “large institutional investor,” so this rule cannot move the 350.

What each part of the proposed rule does (91 FR 66799, October 23, 2026)

The rule does not interpret the statute’s “newly constructed, renovated, or a rental conversion for sale” exception or the two-year exception for buying from an investor who is not covered; both are statutory and apply as written. It also does not address HUD’s annual notice, which the statute requires of large investors by January 7, 2027 and each December 31 after that: the proposal says HUD will prescribe the form and manner.

The renovate-to-rent math, with land taken out

This is the part of the rule that most coverage skips, and it changes the dollar figure. The statute asks for improvements “of not less than 15 percent of the purchase price of the single-family home.” Treasury would define that phrase as the price of the property minus the land: “the portion of the purchase price of the property attributable to the value of the structure, as calculated by subtracting the tax-assessed value of the land at the time of the purchase.” Tax-assessed land value is the county’s figure, not an appraisal.

The proposed safe harbor in section 36.6(b) deems the “substantially rehabilitates” test met if the investor spends at least 10% of that structure price on structural or core system elements of a home that fails them at purchase and resolves all material deficiencies in those elements. Treasury says the safe harbor “would not reduce the statutory 15 percent improvement requirement”: the investor still needs total improvements of 15% on each home. The safe harbor only answers whether the rehab was substantial.

Renovate-to-rent thresholds for four purchases under the proposed rule (our arithmetic; tax-assessed land values are examples)

Three readings (our arithmetic). The higher the assessed land share, the smaller the required spend: in the second row, land is 60% of the price and the 15% requirement falls from $30,000 to $12,000. The 10% safe harbor is a floor inside the 15%, not an alternative to it, so on the first row a covered buyer would need $14,000 on structural and core systems and $21,000 in total. And the fourth row shows a gap Treasury itself flags: where the assessed land value equals or exceeds the price, the structure price comes to zero or less. Question 15 in the proposal asks whether “the final rule address circumstances in which the tax-assessed value of land equals or exceeds the purchase price of the property.”

Only some work counts as structural. The preamble says “ordinary painting, flooring replacement, landscaping, appliance upgrades, cabinet or countertop replacement” would generally not involve structural or core systems, and the test applies at purchase: “A home would not become eligible for the exception solely because of post-purchase deterioration or damage.” Treasury leaves open whether soft costs, such as permitting, architectural and engineering, inspection, contractor overhead or project management, count toward the 15%, and whether renovations must finish within a set time such as six months.

The rule’s definition of “structural or core system” uses HUD’s code-comparison list, which includes fire safety, light and ventilation, structural loads and seismic design, foundation systems, glass, mechanical, plumbing and electrical.

What it means for flippers and BRRRR investors under 350 homes

If you control fewer than 350 single-family homes, nothing in section 1001 stops you from buying. The renovate-to-rent tests above are conditions a covered buyer must meet to use that exception; you are not asked to meet them. What the law can change for you is the other side of your deal.

• Your buyer pool for a finished flip or a stabilized rental. The statute lets covered investors buy newly constructed, renovated or rental-conversion homes for sale, if not rented pending sale, and it lets them buy from an investor who is not covered for 2 years after January 7, 2027, which we calculate runs to January 7, 2029. After that window, a sale of rentals to a covered investor would need another exception. We do not forecast prices or demand.
• Your competition on distressed homes. A covered buyer using renovate-to-rent can only buy homes that fail structural or core system code elements at purchase and must then spend the 15%. Cosmetic fixers are outside that exception. Whether that moves auction or off-market prices is not something the documents tell us.
• Your own ceiling. The count is by investment control, including through entities you manage. An investor scaling a fund-style business toward hundreds of homes should read the control prongs before crossing the line. The ban restricts purchases, not holdings: section 1001(b)(3) says nothing in it may be construed to “require any large institutional investor to divest or otherwise sell any single-family home purchased before the date of enactment of this Act.”
• Financing. The ban is on the purchaser, not on lenders to small investors; the one lender provision in the rule is the exception for a servicer or lender that acquires a home through foreclosure, deed in lieu or enforcement of a security interest, “and not as a long-term investment strategy.” Our pages on BRRRR, flipping and fix-and-flip loans cover how those deals are financed.

Penalties for a covered buyer who violates the ban (section 1001(d); our arithmetic)

The penalty is a maximum in an action brought by Treasury, or by the Attorney General at its request. Penalties go to HUD for the HOME program to the extent provided in appropriations. The statute and the ban are scheduled to be repealed 15 years after the effective date, which is January 7, 2042 by our arithmetic.

What a reader can do with this

1. Count your homes the statute’s way. Add every single-family home (one or two units) where you or an entity you control owns it, manages it with primary authority, serves as general partner or manager, or owns more than 25% of a class of equity. If the total is under 350, the purchase ban does not apply to you.
2. If you sponsor or invest in a pooled vehicle, read the control language in the documents. The passive-investor test in the proposal turns on director and officer overlap and on any veto, consent or approval right over the homes. A side letter can matter. Treasury says it is “not proposing a safe harbor for minority-investor protective rights.”
3. Plan an exit with the two-year window in mind. A sale to a covered buyer is allowed until January 7, 2029 as a purchase from an investor who is not covered; after that it needs another exception.
4. Check land values before you model a covered buyer’s costs. The assessed land value on the county record sets the structure price in the proposed rule. It is public.
5. Comment if you want to. Treasury’s preamble poses Questions 39 to 55 on renovate-to-rent, including whether to count soft costs and whether to use an alternative to tax-assessed value. Comments are due November 23, 2026 through regulations.gov, docket TREAS-DO-2026-0529.
6. Line up financing for your next deal on its own terms. The rule does not set loan terms.

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What this page cannot see

• The rule is proposed. Treasury can change it after comments, and the final rule may differ on land value, soft costs and timing. Our figures use the text published October 23, 2026.
• The land value in each of our examples is assumed. Tax-assessed land values vary by county and can be outdated or under appeal; Treasury says so in the preamble.
• No count of covered investors. Treasury says it has no reliable data. Our census of single-family landlords lists the public companies that are far above 350 homes, but not private owners.
• “In concert” is undefined. We could not find a definition in the statute or the proposal.
• Not legal advice. Whether a specific structure is inside the definition is a legal question for counsel.

FAQ

Sources: Public Law 119-101, 21st Century ROAD to Housing Act, section 1001 (42 U.S.C. 19521), govinfo.gov, text saved November 3, 2026; Department of the Treasury, “21st Century ROAD to Housing Act Prohibition on Large Institutional Investor Purchases of Single-Family Homes,” proposed rule, 91 FR 66799, document 2026-21675, docket TREAS-DO-2026-0529, federalregister.gov, October 23, 2026, read November 3, 2026. This is analysis of public documents, not investment, legal or tax advice.