and What Treasury Decides Next
by Tyler Craddock
The 21st Century ROAD to Housing Act is now law. The Senate passed H.R. 6644 on June 22 by 85–5, the House agreed the next day 358–32, and it became Public Law 119-101 on July 11, 2026. Section 1001 takes effect January 7, 2027. For investors and property managers, the provisions that matter most are the ones that changed between the Senate and House versions.
Section 1001, “Homes Are for People, Not Corporations,” generally bars a large institutional investor from purchasing additional single-family homes. The law defines that investor as a for-profit entity engaged in investing in, owning, renting, managing, or holding single-family homes and holding direct or indirect investment control of at least 350 of them.
Investment control reaches ownership, primary decision-making authority, control of a general partner or managing member, and equity stakes above 25%. Qualifying purchases made after enactment are excluded from the count, and homes owned before enactment are not subject to divestment.
The section’s title telegraphs the goal: keep more existing homes available to individual buyers. The harder question, and the one that consumed the build-to-rent debate, was how to do that without also discouraging investment that adds housing.
The Senate-passed version treated build-to-rent as an exception to the acquisition restriction but attached a condition. Covered homes would have to be sold to individual buyers within seven years. At disposition, renters would receive a 30-day “first look” and a right of first refusal.
The Association’s Concerns
NARPM opposed the mandatory disposition requirement. Build-to-rent communities are underwritten as long-term rental assets, with debt and equity priced to hold. Housing providers told lawmakers that a fixed exit date would sit badly against construction lending terms, equity commitments, and operating plans written for a longer horizon. NARPM argued the requirement would push capital away from projects that add rental units rather than absorb existing ones.
We raised a second concern about the definition itself of an institutional investor. The original version was broad enough to capture professional managers who run large portfolios on behalf of other owners. The Senate-approved version of the legislation modified that language to try and make it clearer that property agreements are not the intended target of this provision. A third-party manager may collect rent, coordinate maintenance, communicate with residents, and carry out an owner’s instructions without owning the home or making the owner’s investment decisions.
A management agreement should not, by itself, establish direct or indirect investment control. The question should be whether an entity owns the property or holds authority over material investment decisions—not how many homes it services under contract for independent owners.
NARPM took both concerns to House members and staff, alongside investors, builders, lenders, and rental-housing providers who supplied their own market and operational detail.
The House Amendment
The House amendment struck the seven-year disposition requirement. It also removed the general renter first-look and right-of-first-refusal conditions from the build-to-rent exception; those terms survive in a separate homeownership-oriented exception, but they no longer attach to every qualifying build-to-rent community. The enacted law kept the House approach to build-to-rent properties and the Senate approach to the definition of an institutional investor as it relates to property management agreements.
Under the law, a qualifying build-to-rent transaction is an “excepted purchase.” A covered investor may purchase, construct, or construct and retain newly built single-family homes as rental property, in an all-rental community or in a neighborhood mixing owner- and renter-occupied homes. There is no federal seven-year forced-sale deadline. Renovate-to-rent also qualifies where improvements total at least 15% of the purchase price, along with several other specified transactions, including purchases from non-covered sellers within two years of enactment.
This is not a blanket exemption. Covered investors remain subject to the acquisition restriction on anything that does not fit an exception. They must report to HUD within 180 days of enactment and by December 31 each year, notify renters of HUD’s outreach resource at first occupancy and annually after that, and post contact information publicly. Penalties run to the greater of $1 million per violation or three times the purchase price.
Likewise, the enacted law was an improvement with respect to how the law applies with respect to property management agreements and whether they count toward the 350-home limit in that it creates more certainty that they do not. That stated, NARPM is working with Treasury, which writes the implementing rules. We want the rules to say plainly that an ordinary management agreement, standing alone, does not convert a third-party manager into a large institutional investor—while still reaching arrangements that hand a manager real authority over material investment decisions.
The test should be actual authority, not the label on the contract. Managers whose client portfolios sit near the 350-home line have reason to read their own agreements now, before the comment period opens.
Lessons Learned
There is a practical lesson here. Opposition alone rarely moves a bill. Lawmakers needed specifics: how a seven-year clock prices into a construction loan, what a management agreement delegates, which transactions add units and which merely transfer them. Those details are what separated existing-home acquisition from investment that creates new supply.
The work is not finished. The law directs federal studies of institutional ownership, housing affordability, and the effect of the purchase restriction, and those findings will feed the next round of proposals. Treasury’s rulemaking is the immediate front, but state legislatures have their own institutional-ownership bills pending, and the definition fight will be refought there.
Congress removed a provision that threatened build-to-rent viability while keeping restrictions aimed at institutional purchases of existing homes. What remains unsettled is whether Treasury treats third-party management as investment control. For a management company with 400 homes under contract and none on its balance sheet, that reading decides whether January 7, 2027, is a calendar item or a business-model problem.
