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 allcash deals, noconsideration transfers, and hardmoney loans), and
- At least one buyer or transferee is a legal entity, such as:
- LLC
- Corporation
- Partnership
- Trust
If all three are true, the transaction falls under RRER—and additional reporting is required.
If Your Deal Does Qualify, What Happens Next?
Buyer Agent Pro Tip:
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
- Trust or entity details
- Identification of all beneficial owners (including address, SSN, or passport number)
- Banking details
- Source of funds
For Sellers
- Individual identity information, or
- If a trust/entity: documentation about that trust/entity and its beneficial owner(s)
For the Property
- Legal description
- Full property details involved in 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.
