On July 11, 2026, the 21st Century ROAD to Housing Act (H.R. 6644) became law, enacting a broad bipartisan package aimed at addressing housing affordability and expanding homeownership opportunities. The legislation seeks to increase housing supply and improve access to homeownership through reforms affecting residential development, housing finance and the single-family housing market.
Most notably, H.R. 6644 also includes new restrictions targeting large institutional investors (LIIs) in the single-family housing market, reflecting policymakers' efforts to preserve housing opportunities for owner-occupants.
How H.R. 6644 Addresses Housing Affordability
H.R. 6644 takes a novel legislative approach by seeking to advance a policy objective through restrictions on a class of investors. Rather than focusing solely on increasing the supply of housing or expanding access to financing, the law places limits on who can participate in a segment of the housing market.
Therefore, it reflects a willingness by Congress to place limits on investor activity in an effort to address a broader policy concern.
Understanding the New Restriction on Institutional Investors in Single-family Homes
Section 1001 of H.R. 6644 prohibits large institutional investors from directly or indirectly purchasing single-family homes. However, it also provides several significant exceptions for institutional investment, particularly for development, rehabilitation and certain homeownership-related activities.
H.R. 6644 includes several important definitions and exceptions that define the scope of the restriction, which are summarized below.
Large Institutional Investor
Large institutional investor is defined as an investment fund, corporation, general or limited partnership, limited liability company, joint venture, association, or other for-profit entity engaged in the business of:
- Investing in, owning, renting, managing or holding single-family homes, and
- Directly or indirectly has investment control of 350 or more single-family homes (excluding excepted purchases)
Single-family Home
Single-family home is defined as a structure that contains two or fewer dwelling units intended for residential occupancy by a single household, excluding manufactured homes.
Purchase
Purchase is defined as any purchase, transfer, or other acquisition of a single-family home, including through mergers, acquisitions, construction, foreclosure, or bulk purchases, whether or not for cash consideration.
Excepted Purchases
Excepted purchases are excluded from both the general prohibition and the calculation of the 350-home threshold. These categories include:
- Newly constructed, renovated and rental-conversion properties for sale
- Qualifying build-to-rent programs consisting of newly constructed homes
- Qualifying renovate-to-rent programs
- Qualifying rent-to-own and other homeownership-focused programs
- Certain debt satisfaction, foreclosure, and loss-mitigation activities
- Certain purchases from other large institutional investors involving properties owned before enactment of, or acquired in compliance with, H.R. 6644, as well as purchases from non-covered investors made before January 7, 2029
- Newly constructed, renovated, or rental-conversion properties in age-restricted communities
- Single purchases or combinations of purchases that otherwise qualify as excepted purchases
When the Institutional Investor Restrictions Take Effect
H.R. 6644 applies prospectively to future acquisitions and does not require investors to divest existing holdings. The restrictions generally take effect on January 7, 2027, 180 days after enactment, providing affected investors with a transition period before the new rules apply. Absent further congressional action, the institutional investor provisions are scheduled to sunset on January 7, 2042. H.R. 6644 also includes compliance and reporting requirements for covered investors.
Potential Impact of H.R. 6644 on the Single-family Housing Market
How Institutional Investor Activity Has Historically Influenced Housing Markets
While much has been written about the effects of large institutional investment in single-family homes since their rise to prominence after the financial crisis in 2008, a more detailed look at the data reveals certain nuances. Several studies and datasets have approximated large institutional investment in single-family homes at approximately 3% or less across the country.
However, the majority of those investments are significantly concentrated in just a small number of large Southwest and Southeastern MSAs like Phoenix, Las Vegas, Dallas, Houston, Charlotte, and Atlanta, among others. It should be noted that the definition of a “large institutional investor” varies between each of the more recent studies and the definition used in the legislation, ranging from ownership of 350 units to 1,000 or more.
How Large Institutional Investors May Adapt Their Investment Strategies
Given the prospective nature of H.R. 6644, the effect on large institutional investors will likely be less disruptive than if the requirements applied to exiting assets. Even so, most large institutional investors do rely on scale, particularly to minimize expenses (lawn care, repairs, appliances, etc.) and to allow faster turns to reduce vacant days on the market.
As such, those entities will need to assess where they are in their thesis and planned capital deployment and consider if they should continue with their existing portfolio or change strategy. Some may perhaps shift capital to build-to-rent or multifamily investments.
The effect of these decisions will, of course, impact the concentrated locations most prominently. Smaller investment entities are likely to be unaffected by the restrictions. However, the limitations now placed on some large institutional investors could create opportunities for smaller investors and individual home buyers.
Your Guide Forward
As the housing market adapts to the changes introduced by H.R. 6644, investors, developers, homebuilders, and housing stakeholders should evaluate how the new restrictions, exceptions, and compliance requirements may affect their growth strategies and investment plans. Cherry Bekaert's Real Estate & Construction, Tax, and Advisory professionals can help organizations assess the implications of the legislation, identify planning opportunities within the law's exceptions, model potential business impacts, and develop strategies to navigate an evolving single-family housing landscape with confidence.
Related Insights
