A major change is coming to residential real estate transactions—and it’s designed to help keep illicit money out of the U.S. housing market. Beginning March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) will roll out new nationwide reporting requirements that affect certain types of purchases.
If you work in real estate, or you’re planning to buy or sell property, here’s what you need to know about the FinCEN Residential Real Estate Rule (RRER) and how to prepare.
Why This Rule Exists?
FinCEN’s goal is simple: increase transparency and reduce the risk of money laundering in real estate. To do this, the agency is requiring settlement teams to gather additional information for transactions that fall into higher-risk categories. While this may sound daunting, understanding whether your deal qualifies is the first step to ensuring a smooth closing.
Does RRER Apply to All Transactions?
Short answer: No.
The rule applies only when all three of these conditions are met:
- The buyer is making a residential purchase, and
- The purchase is not financed by a traditional lender (this includes all-cash deals, no consideration transfers, and hard money loans), and
- At least one buyer or transferee is a legal entity, such as:
- A limited liability company (LLC) purchasing property
- A corporation acquiring real estate
- A partnership involved in the transaction
- A trust holding title to the property
2. The purchase is not financed by a traditional lender (this includes all-cash deals, no consideration transfers, and hard money loans), and
- At least one buyer or transferee is a legal entity, such as:
- A limited liability company (LLC) purchasing property
- A corporation acquiring real estate
- A partnership involved in the transaction
- A trust holding title to the property
If all three are true, the transaction falls under RRER—and additional reporting is required.
If Your Deal Does Qualify, What Happens Next?
If a transaction meets RRER criteria, the settlement team must gather additional information from both the buyer and seller. To avoid delays, early communication is crucial.
Buyer Agent Pro Tip:
At the offer or contract stage, ask buyers:
“Will you be purchasing under your personal name(s), or under a trust or other entity?”
If a trust or entity is involved, alert the settlement team immediately so the proper documentation can be collected up front.
What Information Will Need to Be Collected?
Under the new rule, the following information becomes mandatory:
For Buyers
- Details about the purchasing trust or legal entity
- Identification of all beneficial owners (including address, SSN, or passport number)
- Banking information used for the transaction
- Documentation showing the source of funds
For Sellers
- Individual identity information for the seller, or
- If a trust/entity: documentation about that trust/entity and its beneficial owner(s)
For the Property
-
The property’s legal description
-
Complete property details related to the transfer
These requirements cannot be waived—noncompliance may lead to penalties.
How to Make the Process Smoother?
To prevent bottlenecks at the closing table, here’s what agents and clients can do:
- Ask early whether a trust or legal entity will be part of the purchase.
- Notify your closing team immediately if the answer is yes.
- If a buyer changes course—for example, switching from personal purchase to trust purchase—tell the settlement team right away.
Proactive communication ensures compliance and keeps the closing timeline on track.
The Bottom Line
The new FinCEN Residential Real Estate Rule represents a significant shift, but with the right preparation, buyers, sellers, and agents can navigate it confidently. The key is identifying entity-based purchases early and coordinating closely with your settlement team.
Reach out anytime—we’re here to help guide you through every step of the process.
