New FinCEN Rule Requires Reporting of Certain Residential Real Estate Transactions as of March 1, 2026

As of March 1, 2026, certain residential real estate transactions trigger a new federal reporting obligation under regulations issued by the Financial Crimes Enforcement Network, a bureau of the U.S. Treasury Department.

The Residential Real Estate Reporting Rule, codified at 31 CFR § 1031.320, requires designated professionals involved in real estate closings and settlements to report specific non-financed transfers of residential real property to legal entities and trusts. Although the filing obligation falls on closing professionals rather than buyers or sellers directly, the Rule will affect how transactions are structured, documented, and closed.

Clients acquiring residential property through entities or trusts, particularly in all-cash or privately financed transactions, and their sellers, should understand how the Rule may affect their transactions.

Why This Rule Was Adopted

FinCEN adopted the Rule to address concerns that purchases of residential real estate–especially all-cash purchases made through shell companies or trusts–have been used to launder illicit funds. When a purchase is financed by a regulated bank, that institution is subject to anti-money laundering compliance obligations and Suspicious Activity Report (SAR) filing requirements. Until now, though, all-cash and privately financed deals have fallen outside the scope of that regulatory framework, and the Rule is intended to close that loophole by requiring reporting of certain such “non-financed” acquisitions by entities and trusts.

What Transactions Are Covered?

A transaction is reportable if it meets three core elements:

• It involves a transfer of an ownership interest in residential real property.
• The buyer is a legal entity or trust.
• The transaction is “non-financed,” as defined by the Rule.

There is no minimum purchase price threshold: unless an exemption applies, a transfer otherwise covered by the Rule is reportable regardless of the amount involved.

Residential Real Property

The Rule applies to property in the United States containing or intended to contain one to four residential units, including:

• Single-family homes and townhouses
• Condominiums and cooperative units, including co-op shares
• Entire buildings designed for occupancy by one to four families
• Vacant land (even a large tract) on which the buyer intends to build one to four family housing

Mixed-use properties are covered if they include qualifying residential units.

What “Non-Financed” Means

A transaction is considered “non-financed” unless it involves credit that is both (1) secured by the property being transferred and (2) extended by a financial institution that is subject to federal anti-money laundering program and SAR requirements.

As a result, the following transactions (absent an exemption) are reportable if the buyer is an entity or trust:

• All-cash purchases
• Purchases financed by private or hard money lenders
• Seller carryback financing secured by the property

If a regulated bank provides a mortgage secured by the property, the transaction should not reportable.

Entity and Trust Buyers

The Rule applies only when the buyer is a legal entity or trust.  A purchase by an individual taking title in their own name is not reportable.

A “transferee entity” includes a corporation, limited liability company, partnership, statutory (business) trust, and any other form of entity (“any person other than a transferee trust or an individual”), except for certain publicly traded entities and other regulated entities specified in the Rule.

A “transferee trust” includes most domestic and foreign trusts, with only a small number of exceptions.

If multiple buyers are involved, the transaction is reportable so long as at least one buyer is a covered entity or trust (but only information relating to entity buyers must be reported).

Exemptions

Certain transfers are excluded from reporting, including:

• Transfers, such as the grant of an easement, that don’t transfer full ownership
• Transfers resulting from death, such as inheritances
• Transfers incident to divorce
• Transfers to bankruptcy estates incident to the commencement of a bankruptcy proceeding
• Court-supervised transfers
• Certain estate planning transfers made for no consideration, such as an individual transferring property into their own revocable trust
• Transfers to qualified intermediaries in Section 1031 exchanges

There is no exemption based on property value or purchase price.

Who Files the Report?

The Rule establishes a seven-tier reporting cascade, based on participants’ roles in a transfer, to determine which business or professional “engaged within the United States as a business in the provision of real estate closing and settlement services” and involved in the closing must file.  The filing obligation does not fall on the buyer or seller unless it qualifies as such a business and is the “reporting person” determined in accordance with the reporting cascade.

In most transactions, the reporting person will fall within one of the top three tiers:

• The closing or settlement agent
• The person who prepares the settlement statement
• The person who files the deed

Title companies, escrow agents, and real estate attorneys are most likely to serve as reporting persons.

Whoever fills the role highest in the reporting cascade in a given transfer is “the” reporting person for that transfer, but the Rule permits that person to enter into a written designation agreement with a person lower in the cascade allocating the reporting responsibility to that person.  A separate designation agreement is required for each transfer; designation agreements intended to allocate reporting responsibility for multiple transfers are prohibited.

What Information Must Be Reported?

The Real Estate Report must be filed electronically with FinCEN and includes detailed information about:

• The reporting professional
• The property being transferred
• The seller
• The buyer entity or trust
• The total consideration paid, how payment was made, and whether credit was extended by a lender not subject to anti-money laundering and SAR obligations

Most significantly, the report must disclose beneficial ownership information for the buyer entity or trust.

Beneficial Ownership Reporting

For an entity buyer, beneficial owners generally include any individual who—directly or indirectly–owns or controls at least 25 percent of the ownership interests or exercises substantial control over the entity.

For trust buyers, the Rule identifies specific categories of individuals who must be reported, including trustees, certain beneficiaries, and revocable trust grantors.

For each beneficial owner, identifying information such as name, date of birth, residential address, citizenship, and taxpayer identification number (or a specified alternative) must be provided.

Although this information must be collected and reported by the designated reporting professional, buyers should expect to provide certifications confirming the accuracy of beneficial ownership information: only if the information regarding beneficial ownership is so certified may a reporting person rely on it in completing a report.

Filing Deadline

Reports must be filed by the later of:

• 30 calendar days after closing
• The last day of the month following the month in which closing occurred

Transactions closing on or after March 1, 2026, are subject to the Rule.

What This Means for Buyers and Investors

While the filing obligation rests with closing professionals, buyers acquiring residential property through entities or trusts, especially in all-cash or privately financed transactions, should anticipate:

• Requests for beneficial ownership information and written certifications
• Additional documentation during the closing process
• Possible updates to engagement letters or closing procedures

Buyers using layered entity structures or trust arrangements should review those structures in advance to ensure that required information can be provided promptly.  FinCEN does not permit the filing of reports that are missing required information.

Preparing for Implementation

Clients planning residential sales to or acquisitions through limited liability companies, partnerships, corporations, or other entities, or trusts, should consider:

• Confirming how the transaction will be financed and whether it will be considered “non-financed”
• Reviewing entity ownership and control structures
• Coordinating with closing professionals early in the process
• Ensuring internal compliance teams are aware of the new reporting requirements

A copy of the Rule, together with an FAQ, a PDF version of the required form of report, and other explanatory information can be accessed at https://www.fincen.gov/rre. In addition, please find a detailed outline with additional information HERE.

Our team intends to monitor implementation guidance and can assist in evaluating whether specific transactions will be subject to the Rule and how best to structure compliance processes.

Jerome A. “Jerry” Grossman is an Of Counsel Attorney in our San Diego office who has a wealth of experience in commercial real estate finance law and secured financing. He focuses his practice on Uniform Commercial Code secured transactions, real estate secured transactions, and other financing transactions (including securitized financings) – from the initiation stage through workouts and restructurings – and third-party legal opinions. He can be reached at jgrossman@fennemorelaw.com.