If you have heard talk about a new federal reporting rule connected to certain home purchases, you are not alone. A new rule from the Financial Crimes Enforcement Network, known as FinCEN, is designed to increase transparency in a narrow set of residential real estate transactions. The goal is to help prevent money laundering and other criminal activity by identifying the true owners behind legal entities purchasing residential property without financing. The rule took effect on March 1, 2026.
FinCEN is a bureau of the U.S. Department of the Treasury that collects and analyzes information to combat financial crimes such as money laundering and terrorist financing. Under the new Residential Real Estate Rule, certain professionals involved in closings and settlements will be required to file a Real Estate Report with FinCEN for transactions that meet specific criteria.
It is important to know that this rule does not apply to every transaction. It applies only when a residential property is transferred in a non-financed purchase, the buyer is a legal entity or trust, and the transaction is not exempt. Non-financed means there is no mortgage or financing by a regulated institution subject to the Bank Secrecy Act. Covered buyers include entities such as an LLC or corporation and certain trusts. Several types of transfers are exempt, including transfers related to a death, divorce, or court supervision, transactions involving a qualified intermediary such as a 1031 exchange, transfers to a bankruptcy estate, certain no consideration transfers to trusts where an individual is the settlor or grantor, and certain easements.
When the rule is triggered, the reporting person will file information about the parties and the property. Sellers who are individuals may be asked to provide their name, date of birth, address, and a tax identifying number. Entities and trusts may be asked to provide names, trade names, addresses, tax identifying number, and trust information. The buyer entity or trust must provide identifying information as well. The rule also requires information about beneficial owners of the buyer entity or trust, including names, dates of birth, citizenship, and tax identifying numbers. Beneficial owners generally include individuals who own or control at least 25 percent of the entity, as well as individuals who exercise substantial control over the entity.
In practice, the reporting person may request information directly from the buyer or a representative. If the buyer or representative provides beneficial ownership information, they must provide a written certification that the information is accurate. Reporting persons can generally rely on the information provided unless they know it is unreliable. The reports filed with FinCEN are not public and are for FinCEN’s use only.
The rule applies nationwide with no minimum sale price. It covers residential real estate designed for one to four families, including single-family homes, townhomes, condominiums, and cooperatives. It can also include vacant land when the buyer intends to build a one to four-family residence. Commercial real estate is not included.
FinCEN does not charge a fee to file the Real Estate Report through its E-Filing System. However, some professionals responsible for filing may charge a fee for their service.
Here is the practical takeaway. If you are buying a home with a mortgage, this rule usually will not apply. If you are purchasing residential property in cash through an LLC, corporation, or trust, you should expect additional questions and documentation starting March 1, 2026. For Realtors and closing professionals, the best approach is simple preparation. Know which transactions are covered, communicate early with the parties involved, and plan for a smooth documentation process.
This information is based on guidance and FAQs provided by the National Association of Realtors to help real estate professionals and the public understand the new rule. For additional updates and resources, visit www.nar.realtor.
These FAQs are intended to provide an informational overview. For legal or tax advice, consult the appropriate professional. If you have questions about how this may affect a specific transaction, a local Realtor can help you understand the process and coordinate with the closing professional. #That'sWhoWeR
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