"The controversial provision banned institutional investors from purchasing single-family homes. While it included narrow carve-outs for renovate-to-rent projects, it didn't provide exemptions for build-to-rent communities. It also mandated that new BTR communities be sold to individual homeowners within seven years of completion."
"Section 1001 of the updated House legislation similarly defines single-family homes as duplexes, as well as traditional detached and attached single-family properties. Manufactured housing isn't included in the definition. The section further states that no large institutional investor may purchase, or enter into a contract to directly or indirectly purchase, any single-family home."
"To discourage those firms from buying more properties, the legislation would institute a civil penalty in an amount that is not more than $1,000,000 per violation, or 3 times the purchase price of the property involved, whichever is greater. However, there are exemptions to this penalty for any single-family property that is: newly constructed, renovated, or a rental conversion for sale by a large institutional investor and not as a residence rented pending sale."
The House approved legislation on February 9 with a 390-9 vote, and the Senate passed its version on March 12 by an 89-10 vote. The Senate version added Section 901, which banned institutional investors from purchasing single-family homes and reduced build-to-rent supply under construction. The ban included narrow carve-outs for renovate-to-rent projects but lacked exemptions for build-to-rent communities, and it required new build-to-rent communities to be sold to individual homeowners within seven years of completion. The House later released an updated version of the 21st Century ROAD to Housing Act that overhauled Section 901. Section 1001 defines single-family homes to include duplexes and detached or attached single-family properties, excludes manufactured housing, prohibits large institutional investors from purchasing or contracting to purchase such homes, and imposes civil penalties up to $1,000,000 per violation or three times the purchase price, with exemptions for certain newly constructed, renovated, or rental-conversion sales not rented as residences pending sale.
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