The U.S. Congress passed the 21st Century ROAD to Housing Act (the “Housing Act”) and presented it to President Trump on June 29, 2026. At midnight on July 10, 2026, the Housing Act became law because the President did not return it to Congress within ten days (Sundays excepted). The Housing Act includes a wide range of housing reforms designed with the goal of making housing more available and affordable.  This alert focuses on the impact of the Housing Act on institutional investor ownership of single-family rental homes.  The Housing Act does not prohibit institutional investor ownership of manufactured homes. The section of the Housing Act impacting institutional investor ownership of single-family rental homes is Section 1001 (the Section is titled “Homes Are for People, Not Corporations”).  The primary impacts under Section 1001 are (i) a prohibition on purchases of single-family homes (with important exceptions) and (ii) the creation of a “Renter Outreach Resource” managed by the federal government.  Section 1001 uses a number of defined terms, which are summarized in Appendix A to this alert.  The defined terms are indicated in this alert in italics.  The most important – and most extensive – defined term is excepted purchase, which includes, among other programs, purchases of single-family homes pursuant to build-to-rent programs and purchases of single-family homes from other large institutional investors. No Requirement to Dispose When the U.S. Senate passed a version of the Housing Act in March 2026, the legislation included a controversial, perhaps even unconstitutional, provision requiring institutional investors to dispose of certain single-family homes not later than seven years after the date of purchase.  A relief to such institutional investors, the Housing Act, as enacted, does not include that requirement to dispose. Prohibition on Purchases (with Several Exceptions) The Housing Act prohibits the purchase of single-family homes by large institutional investors, excluding any excepted purchase or any purchase of a single-family home in connection with a restructuring or other reorganization of ownership of single-family homes that were owned or purchased on or before the date of enactment of the Housing Act.  The prohibition on purchases takes effect on January 7, 2027 (180 days after the date of enactment of the Housing Act) (the “Effective Date”) and is repealed on January 7, 2042 (15 years after the Effective Date). Excepted purchases (i.e., those not prohibited) are described in detail in Appendix A under the defined term “Excepted Purchase”, but generally include many of the common methods by which institutional investors in single-family rental homes acquire such homes, including but not limited to: (i) build‑to‑rent programs, (ii) renovate‑to‑rent programs, (iii) repossessions, (iv) foreclosures, (v) purchases from another large institutional investor, or (vi) combinations of (i) through (v). Enforcement of Prohibition on Purchases The Secretary of the Treasury, or the Attorney General at the request of the Secretary of the Treasury, may bring an action against a large institutional investor that violates the prohibition on purchases for a civil penalty in an amount that is not more than $1,000,000 per violation, or three times the purchase price of the property involved, whichever is greater. Renter Outreach Resource As described in detail below, the Renter Outreach Resource is a comprehensive program that includes direct reporting of rental disputes by renters to Federal agencies, with investigation and reporting requirements imposed on applicable Federal agencies, and (at a minimum) provision of applicable state agency contact information to renters to facilitate state-level investigation.  In addition, large institutional investors must respond to information requests in connection with any investigation and are required to regularly provide certain information regarding the Renter Outreach Resource to their renters. Establishment of Renter Outreach Resource The Secretary of Housing and Urban Development (the “HUD Secretary”) is required, not later than 180 days after the date of enactment of the Housing Act, to establish the Renter Outreach Resource that consists of a toll-free telephone number and a public website designed to assist renters of residential properties owned by a large institutional investor in –  notifying Federal agencies about disputes relating to the rental of such properties, including disputes about potential violations of Federal law; sharing information about such disputes with other Federal agencies, including other Federal agencies that manage similar disputes; monitoring such disputes; and resolving such disputes, to the extent practicable.   Response to Outreach The HUD Secretary is required to establish reasonable procedures to promptly respond, in writing where appropriate, to a renter who provides information to the HUD Secretary about a dispute using the Renter Outreach Resource and document such responses.  Such responses are required to include, where appropriate, information about –  steps that have been taken by the HUD Secretary or another Federal agency in response to the information about the dispute provided by the renter, including determining the appropriate large institutional investor involved as described in the bullet below “Investigation of Potential Violations of Federal Law;” any responses received by the HUD Secretary or another Federal agency from the large institutional investor related to such dispute; and any outcome of the dispute, to the extent practicable.   Investigation of Potential Violations of Federal Law The HUD Secretary is required to promptly process and investigate any information relating to a dispute received through the Renter Outreach Resource about a potential violation of Federal law that is received from a renter of a residential property owned by a large institutional investor through the Renter Outreach Resource, including –  requesting information from a large institutional investor; determining the appropriate large institutional investor involved in the dispute; and sharing information about such potential violation of Federal law with any relevant Federal agencies, as the HUD Secretary may determine appropriate.   Upon request for information made pursuant to the Renter Outreach Resource, the HUD Secretary is required to provide a large institutional investor the opportunity to respond, including regarding whether such large institutional investor currently owns the property described in such request for information.   Information for Appropriate State Authority When the HUD Secretary receives information about a potential violation of State law or about a dispute received through the Renter Outreach Resource, from a renter of a residential property owned by a large institutional investor through the Renter Outreach Resource, the HUD Secretary is required, at a minimum, to provide the renter with contact information for the appropriate, State-specific, State authority authorized to process and investigate such information.   Notice About Renter Outreach Resource Each large institutional investor is required to –  provide to each renter of a residential property owned by such investor at the time such renter first occupies such home and annually thereafter –  written notice about the Renter Outreach Resource; and the name, phone number, and email address of the person or entity responsible for receiving and addressing renter disputes for the large institutional investor, and update the name, phone number, and email address within 30 days if such information changes prior to the subsequent time at which such notice is required to be provided; and   prominently feature information about the Renter Outreach Resource on a public website of such investor that is accessible by such renter.   Annual Notification Not later than 180 days after the date of enactment of the Housing Act, and not later than December 31st of each year thereafter, each person or entity that satisfies the definition of a large institutional investor is required to –  notify the HUD Secretary each year whether such owner is a large institutional investor; and in such notification, identify how many single-family homes such large institutional investor has direct or indirect investment control of as of the date of the submission of such notice, and the city and State where each such single-family home is located, unless such large institutional investor owns ten or fewer single-family homes in such city. Studies on Large Institutional Investors Not later than two years after the Effective Date, and again not later than ten years after the Effective Date, a GAO report and a HUD report are required to be submitted to the House Banking Committee and the Senate Committee on Financial Services. *     *     * Contacts Tax Cameron N. Cosby Carson Durdel Connie Lee Ameek Ashok Ponda Sarah D. Wellings Private Funds William C. Hanson Real Estate Karen J. Kepler Louis A. Monti John M. Steiner Appendix A Defined Terms in Section 1001 of the Housing Act Consumer Reporting Agency:  The term “consumer reporting agency” has the meaning given the term in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)). Excepted Purchase:  The term “excepted purchase” means any purchase of a single-family home that is –  Newly Constructed, For Sale Home Newly constructed, renovated, or a rental conversion for sale by a large institutional investor and not as a residence rented pending sale;   Build-to-Rent Program Pursuant to a build-to-rent program where the large institutional investor purchases newly constructed single-family homes to be managed as rental properties, whether as communities exclusively of renter-occupied single-family homes or as communities of single-family homes that are both owner- and renter-occupied;   Renovate-to-Rent Program Pursuant to a renovate-to-rent program that –  substantially rehabilitates single-family homes that do not meet structural or core system elements of local building codes; and makes improvements in an aggregate dollar amount of not less than 15% of the purchase price of the single-family home;   Homeownership Program Pursuant to a homeownership program that –  requires rental payments and any other fees that are not greater than those collected by the large institutional investor on other similarly situated single-family homes not covered by the eligible homeownership program; is subject to a contract between the large institutional investor and renter that shall be considered a consumer credit transaction secured by a dwelling or real property; provides for positive reporting of rental payments to consumer reporting agencies for any renter, who shall be informed of and opts into such reporting; and requires contribution of meaningful financial support from the large institutional investor, including price concessions, for the purchase of the single-family home by the renter;   Program to Boost Homeownership Pursuant to a program to boost homeownership that –  provides for positive reporting of rental payments to consumer reporting agencies for any renter who is informed of and opts into such reporting; provides for the right of first refusal and a 30-day ‘‘first look’’ period; and may entail the meaningful financial support from the large institutional investor, including price concessions, for the purchase of a single-family home by the renter (whether it is the home the renter occupies or another home);   Repossession In connection with the satisfaction of debts previously contracted in good faith and where the large institutional investor has the right to repossess the single-family home under such contract;   Foreclosure Undertaken by a mortgage servicer, lender, or other entity that has a legal right to a single-family home, for the purpose of loss mitigation or compliance with servicing or investor obligations, and not as a long-term investment strategy, and is solely as a result of –  a foreclosure; a deed-in-lieu of foreclosure; enforcement of a mortgage, deed of trust, or other security interest; or operation of law following borrower default;   Purchase from Another Large Institutional Investor Purchased from another large institutional investor that either owned the single-family home on the date of enactment of the Housing Act or purchased the single-family home in compliance with Section 1001;   Purchase from Investor Not a Large Institutional Investor Purchased from an investor not covered under Section 1001, so long as the purchase occurred not more than two years after the Effective Date;   Newly Constructed Single-Family Home in Senior Community Newly constructed, renovated, or a rental conversion that is intended and operated for occupancy as part of a community for households with one or more members aged 55 years or older, and satisfies visitability standards established by the HUD Secretary; or   Combination of Foregoing Purchases Purchased through a single purchase or combination or series of purchases described in the foregoing bullet points.   Large Institutional Investor:  The term “large institutional investor” means an investment fund, corporation, general or limited partnership, limited liability company, joint venture, association, or other for-profit entity that is a legal entity structured in a manner that is not aforementioned that –  is engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes; and alone or in concert with one or more other entities, beginning after the date of enactment of the Housing Act, directly or indirectly has investment control of not less than 350 single-family homes in the aggregate, not including any single-family home purchased in an excepted purchase made after the date of enactment of the Housing Act.   A large institutional investor does not include any local, State, Tribal, or Federal government entity or instrumentality thereof. For purposes of the definition of “large institutional investor”, an entity has direct or indirect investment control over a single-family home if the entity –  owns, or has primary authority or fiduciary responsibility to make material investment or management decisions relating to, the single-family home; is, or directly or indirectly controls, the general partner or managing member of the entity that owns the single-family home; is or controls the investment manager, management company, or investment advisor of the entity that owns the single-family home; owns or controls more than 25% of any class of equity interests of the entity that owns the single-family home, unless such entity is a passive investor; or otherwise controls the entity that owns the single-family home.   Purchase:  The term “purchase” includes any purchase, transfer, or other acquisition of a single-family home, including through mergers, acquisitions, construction, foreclosures, or bulk purchases, whether or not for cash consideration.   Single-Family Home:  The term “single-family home” means a structure that contains two or fewer dwelling units that are each intended for residential occupancy by a single household.  The term “single-family home” does not include a manufactured home, as defined in section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5402).

On July 4, 2025, President Trump signed the "One Big Beautiful Bill Act" (the “OBBBA”), which contains amendments to sections 1400Z-1 and 1400Z-2 of the Internal Revenue Code (the “Original Statute”)—the provisions that establish and govern the Opportunity Zone program. Enacted in 2017 by President Trump in his first term, the Original Statute created a framework for incentivizing investment in economically distressed areas by offering timebound tax benefits to investments in qualified businesses and property within designated Opportunity Zones. Through the OBBBA, President Trump enshrined in the Code one of the signature pieces of legislation from his first term by removing the original sunset provisions and making additional enhancements (the “OZ Amendments”), including those described below. Without the OZ Amendments, key provisions of the Opportunity Zone program would have expired on December 31, 2026. Generally, the Opportunity Zone program provides three (3) significant tax benefits for taxpayers who invest capital gains in a Qualified Opportunity Fund (a “QOF”), provided the QOF then invests its cash in qualified property or a Qualified Opportunity Zone Business (a “QOZB”) that is located in a low-income census tract designated by the chief executive of a state or US territory (a “Qualified Opportunity Zone”): First, a taxpayer can defer paying tax on capital gains that are invested in a QOF and subsequently properly invested by the QOF in qualified property or a QOZB; Second, a taxpayer can reduce the amount of capital gains tax ultimately due with respect to capital gains that are invested in a QOF and subsequently properly invested by the QOF in qualified property or a QOZB; and Third, a taxpayer can benefit from tax-free gain with respect to the sale of any QOF interest held for more than 10 years. Changes to Code Section 1400Z-1: Designations of Qualified Opportunity Zones Under the Original Statute, states and territories had one opportunity to designate Qualified Opportunity Zones, all of which designations were scheduled to expire on December 31, 2026. Following the OZ Amendments, however, new Qualified Opportunity Zones may be designated on July 1, 2026, and every 10 years thereafter, with each designation effective for a 10-year period. Also, the OZ Amendments redefine which census tracts are eligible to be designated as Qualified Opportunity Zones. Beginning on July 1, 2026, any census tract, as determined by the most recent decennial national census, in which the median family income does not exceed 70% (lowered from the previous 80% threshold) of the statewide or metropolitan median family income, as applicable, may be designated as a Qualified Opportunity Zone. In addition, any census tract that, as determined by the most recent decennial national census, has a poverty rate of at least 20% and a median family income that does not exceed 125% of the applicable statewide or metropolitan area median family income, as applicable, may be designated as a Qualified Opportunity Zone. Under the Original Statute, only the 20% poverty rate threshold applied; the income limitation is a new requirement introduced by the OZ Amendments. Finally, census tracts that are contiguous with a qualifying census tract can no longer be designated as a Qualified Opportunity Zone. The new designation regime establishes 10-year investment periods for Qualified Opportunity Zones, creating a steady pipeline of new tracts available for QOF investors. This structure offers greater flexibility and certainty for investors seeking to make QOF investing a permanent part of their capital allocation and investment strategies. At the same time, the OZ Amendments introduce stricter criteria for designating Qualified Opportunity Zones, helping achieve the Opportunity Zone program goals of directing benefits to genuinely underserved communities. Changes to Code Section 1400Z-2: Tax Effects of the OZ Amendments Under the OZ Amendments, the payment of capital gains tax that would be due but for the investment of such capital gains in a QOF is deferred for up to five (5) years following the date of the QOF investment or until the investment is sold, whichever comes first. Additionally, if a QOF investment is held for at least five (5) years, the amount of capital gains tax due is reduced by 10%. The OZ Amendments also introduce the concept of a Qualified Rural Opportunity Fund (a “QROF”). A QROF essentially operates in the same manner as a QOF, but for purposes of the qualifying under the Opportunity Zone program, as amended by the OZ Amendments, at least 70% of the assets owned or leased by the QROF must be located in a Qualified Opportunity Zone comprised entirely of a “rural area” or at least 70% of the assets owned or leased by a QOZB that is owned by a QROF must be used in a Qualified Opportunity Zone comprised entirely of a “rural area.” As defined in the OZ Amendments, a “rural area” is either a city or town with a population of less than 50,000 or any urbanized area contiguous and adjacent to a city or town with a population greater than 50,000. The OZ Amendments encourage investment in QROFs by providing a 30% reduction in capital gains tax on qualifying amounts invested—an increase from the previous 10% reduction available for investments in QOFs. Further, the OZ Amendments relax the “substantial improvement” standard for preexisting structures located in a “rural area.” Outside of a “rural area,” a QOF or QOZB must invest at least an amount equal to the purchase price of a preexisting structure in improvements to qualify for Opportunity Zone benefits. For preexisting structures in “rural areas,” however, the required investment in improvements is reduced to 50% of the acquisition price. Finally, the OZ Amendments cap the holding period for each QOF or QROF investment at 30 years. The investment must be disposed of within 30 years of the investment date; otherwise, on the 30-year anniversary, the basis in the QOF or QROF interest is stepped up to its fair market value. The QROF framework dramatically expands the potential of the Opportunity Zone program and unlocks multiple new potential strategies for investors. The reduced “substantial improvement” standard for QROFs could qualify relatively smaller or lower-value rural properties for Opportunity zone benefits by making it possible and profitable to renovate or repurpose existing rural structures that would not meet the cost thresholds for QOFs, such as the revitalization of historic “main street” properties, the adaptive reuse of barns or warehouses for community or light industrial purposes, and small-scale hospitality renovations (e.g., motels, campgrounds, B&Bs). In addition, QROFs can more feasibly support the improvement and expansion of rural infrastructure—such as broadband, water, waste management, or renewable energy installations and facilities for agriculture or forestry—where project costs may not justify high QOF-level improvement requirements or where initial investment outlays and improvement costs are lower. QROFs present potential for smaller workforce or affordable housing projects in rural areas, which may struggle to hit QOF investment thresholds. Moreover, community centers, healthcare clinics, and educational/training centers—often serving populations too small for QOF economics—fit better within the QROF structure. New Reporting Requirements The OZ Amendments impose additional reporting requirements for QOFs, QROFs, and QOZBs. These new reporting requirements include the reporting of the value of the assets purchased and leased, the census tracts in which the qualifying investments are located, and the number of employees located in the Qualified Opportunity Zone, or other information related to the employment impact of the QOF, QROF, and QOZB. For real property, the number of residential units must also be reported. The names, addresses and taxpayer identification numbers of investors that sell an interest in a QOF or QROF must also be identified each year.  Also, the OZ Amendments impose penalties for the failure to file the required information and appropriate funds to the IRS to enable the IRS to make annual reports showing information such as the number of QOFs and QROFs, the employment impact, and the aggregate amount invested. These new reporting requirements enable regulators and the public to better assess whether Opportunity Zone incentives are achieving their intended economic and social benefits, particularly in underserved or rural areas. This regulatory shift, including stricter documentation, regular reporting deadlines, and potential penalties for inaccuracies or omissions, may increase administrative costs, but it also builds greater market confidence in the Opportunity Zone program and helps ensure that tax benefits are tied to demonstrable community impact. Takeaways The OZ Amendments make the tax benefits permanent, ensure that there will be a reduction in capital gains tax due if an investment in a QOF or QROF is held for at least five (5) years, and create a process for new Qualified Opportunity Zones to be designated every 10 years. Additionally, the OZ Amendments' new OZ Statute encourages investment in rural areas by providing additional tax savings to investments in those areas, helping deliver Opportunity Zone benefits to small-scale projects that could create a steady flow of investment to rural communities. Finally, the new reporting requirements create a more robust framework for oversight, improve program credibility, and drive more targeted and responsible investment activity in Opportunity Zones.