The 21st Century ROAD To Housing Act: Congress Passes Final Bill

This update supplements our March 20, 2026 article analyzing the bill titled 21st Century ROAD to Housing Act, passed by the Senate on March 12, 2026, as an amendment to H.R. 6644 (the “Senate Bill”), and its implications for institutional real estate investors, particularly with respect to build-to-rent (“BTR”) development. On May 20, 2026, the House passed its own amendment to the Senate Bill (the “House Amendment”), which made several significant changes – most notably, eliminating the 7-year forced disposal requirement for BTR communities and removing the renter “first-look” and right-of-first-refusal (“ROFR”) provisions from the BTR exception. Following further reconciliation between the chambers, both houses passed identical text, which was enrolled and presented to the President (the “Final Bill”): the Senate on June 22, 2026 (85–5), and the House on June 23, 2026 (358–32). The Final Bill largely preserves the House Amendment’s changes to the Senate Bill and adds several further provisions relevant to institutional investors.

The Final Bill now sits on President Trump’s desk. However, on June 24, 2026, the President postponed a planned signing ceremony, stating on social media that it would be delayed pending congressional action on the SAVE America Act. House Speaker Johnson indicated he expects the bill to be signed. The President has 10 days (excluding Sundays) from presentment to sign the bill; if he takes no action within that window and Congress remains in session, the bill becomes law without his signature.

Final Bill Overview

On the issues of greatest concern to the commercial real estate industry, the Final Bill includes a prohibition that bars “large institutional investors” from purchasing single-family homes, subject to a defined list of statutory exceptions (each, an “excepted purchase”). One of those exceptions covers BTR communities; the core prohibition and its terms are described in greater detail below. The Final Bill preserves the following key changes that the House Amendment made to the more restrictive bill the Senate had passed:

• The 7-year forced disposal requirement for BTR is eliminated. The Senate Bill required institutional investors acquiring BTR homes, newly constructed homes for sale, and renovate-to-rent homes to dispose of those properties to individual buyers within seven years. The House Amendment removed this requirement, and the Final Bill confirms that elimination. BTR communities acquired as excepted purchases under Section 1001(a)(2)(B) are not subject to any forced disposition timeline and can be held for the investor’s intended investment horizon.
• No renter first-look or ROFR on BTR. The Senate Bill imposed a 30-day “first look” period and right of first refusal on BTR homes upon the forced disposition. The House Amendment removed these renter purchase rights from the BTR exception entirely, and the Final Bill does the same. These protections survive only in two separate, voluntary exception categories: the “homeownership program” exception (Section 1001(a)(2)(D)) and the “program to boost homeownership” exception (Section 1001(a)(2)(E)).
• Pipeline BTR projects unaffected. We flagged in our March article that BTR projects already in development or under construction would be subject to the disposal requirement if sold to an institutional buyer after enactment. With the disposal mandate eliminated in the Final Bill, pipeline BTR projects may be acquired by large institutional investors as excepted purchases without any forced disposition obligation.

Core Prohibition Retained

The Final Bill retains the core prohibition from the Senate Bill: no “large institutional investor” – defined as a for-profit entity with direct or indirect investment control of 350 or more single-family homes – may purchase any single-family home after the effective date, subject to eleven enumerated excepted purchase categories. “Single-family home” continues to mean a structure containing two or fewer dwelling units intended for residential occupancy by a single household, excluding manufactured homes. The definition includes duplexes; there are concerns that it may inadvertently sweep in certain attached or small-unit multifamily products. The bill’s prohibition of large institutional investors that “alone or in concert with other entities” acquire “investment control” of single-family homes potentially raises compliance issues for CMBS special servicers and other service providers. The prohibition takes effect 180 days after enactment and is repealed 15 years after the effective date. Civil penalties of up to $1 million per violation or three times the purchase price, whichever is greater, apply to violations.

Other Notable Provisions Affecting Institutional Investors

Beyond the BTR-specific changes discussed above, the Final Bill includes several additional provisions relevant to institutional real estate investors:

• Renter outreach resource. The Final Bill requires HUD to establish a toll-free telephone number and public website to assist renters of properties owned by large institutional investors in raising disputes. Large institutional investors must provide annual written notice of this resource to their renters. This creates new compliance and disclosure obligations for covered entities.
• Annual notification requirement. Each entity satisfying the definition of “large institutional investor” must notify the Secretary annually of its status and identify the number and location of single-family homes under its investment control. This reporting obligation applies regardless of whether the investor has made any new purchases.

Supply-Side Reforms and Their Limitations

The Final Bill is a policy bill and expressly does not provide for new funding, and its supply-side reforms are advanced largely through small incentives and regulatory streamlining rather than mandates or funding for new housing. Viewed as a whole, the Final Bill is best understood as a set of targeted reforms to existing federal housing programs rather than a structural change to the dynamics that drive housing costs, and its overall effect on housing affordability is likely to be modest. Factors such as land availability, local zoning, construction costs, labor, and interest rates are expected to remain the primary drivers of housing prices and rents. The following items give an overview on how the Final Bill aims to address supply-side hurdles for housing:

• Not a funding bill. Section 1202 confirms that no additional funds are authorized to carry out the Act or its amendments. The legislation relies on existing programs and authorities rather than new appropriations. One notable change is the increase in the public welfare investment cap for national banks and Federal Reserve member banks from 15% to 20% (Section 203), which is expected to expand the availability of private capital for affordable housing, particularly through the Low-Income Housing Tax Credit (LIHTC) program.
• Environmental review streamlining – limited reach. The Final Bill retains the environmental review streamlining provisions, including expanded categorical exclusions and statutory categorical exemptions from NEPA review for infill housing projects, acquisitions for affordable housing, rehabilitation, and new construction projects of 15 units or fewer. Retention of this relief is meaningful but narrow: it applies principally to HUD-assisted and federally assisted projects, and does not apply to projects of more than 15 units, leaving the much larger universe of private market-rate development subject to the existing review framework.
• Higher FHA multifamily mortgage insurance limits. The Final Bill (Section 211) substantially increases the per-unit dollar limits across the FHA multifamily mortgage insurance programs, which had not been meaningfully updated in over two decades. By allowing developers to borrow more against FHA-insured multifamily construction and acquisition loans, the change is intended to support higher-density housing production, although its practical impact will depend on market conditions and FHA program capacity.
• Manufactured and modular housing. The Final Bill retains from the Senate Bill the removal of the permanent chassis requirement from the federal definition of “manufactured home” (Section 301), modular housing production reforms (Section 302), and increased FHA Title I loan limits for manufactured housing and property improvement loans (Section 303). These provisions are expected to reduce the costs of manufactured homes, as most purchasers do not require a chassis, and in turn may benefit investors and developers in the manufactured and factory-built housing sectors. Expansion of the use of manufactured homes remains subject to local zoning, which continues to govern where such homes may be sited. Modular housing manufacturers will continue to need to work with local jurisdictions to update building codes to allow for greater use of modular housing components.
• Financial incentives remain modest. The Final Bill carries forward the Innovation Fund (Section 208), which offers competitive grants to communities that demonstrably increase housing supply, authorized at $200 million per year for fiscal years 2027 through 2031 and sunsetting seven years after enactment. These incentives are modest relative to the scale of the national housing shortfall and depend on voluntary local participation.
• No preemption of local zoning. The Final Bill does not preempt local land-use or zoning authority. The new Section 107 directs HUD to publish guidelines and best practices for state and local zoning frameworks, but expressly disclaims any authority for HUD to take adverse action against a jurisdiction that declines to adopt them, and the Innovation Fund likewise may not be used to mandate, supersede, or preempt local zoning (Section 208). Local zoning therefore remains a practical limitation on the bill’s supply-side aspirations.

Implications for Commercial Real Estate

The Final Bill, if signed into law, would impose the first broad federal restriction on institutional ownership of single-family homes. For institutional real estate investors, the key implications are:

• BTR is protected. The most consequential change from the Senate Bill – elimination of the 7-year disposal requirement and removal of the first-look and ROFR from BTR – survives in the Final Bill. BTR developers and investors can operate without a forced exit timeline or renter purchase obligations. Commentators remain concerned that institutional lenders lending on BTR product could run afoul of the legislation. There is an express exclusion from the prohibition for acquisitions of single-family homes by mortgage servicers, lenders, or other entities through foreclosure, deed in lieu of foreclosure, or other enforcement of security interests. Some commentators remain concerned that it is unclear whether the bill could be interpreted to restrict to whom the single-family homes may be sold.
• Acquisition of existing single-family rental homes is prohibited. For entities above the 350-home threshold, the purchase of existing single-family rental homes that do not fall within an excepted purchase category is prohibited. This continues to be the bill’s most impactful restriction on institutional investment strategy.
• Regulatory authority remains broad. The Secretary of the Treasury, in consultation with HUD, FHFA, and the SEC, retains authority to issue implementing regulations, including regulations to minimize market disruptions and mitigate negative impacts on consumers and communities. The scope of this regulatory authority – and how it may be exercised – will be critical areas to monitor.
• New compliance obligations. The renter outreach resource and annual notification requirements described above will impose new disclosure and reporting obligations on large institutional investors that should be factored into operational planning.

Signing Uncertainty

As of the date of this update, the Final Bill has not been signed into law. The President’s stated reason for postponing the signing ceremony relates to separate legislation (the SAVE America Act) rather than to the substance of the Final Bill. As noted above, the President has 10 days (excluding Sundays) from presentment to sign the bill; absent a veto, the bill would become law without his signature if Congress remains in session. Congressional leaders have indicated they expect the bill to be signed. We will provide a further update upon signing or if material developments occur.