New FinCEN Rule for Non-Financed Residential Real Estate Deals

For all-cash transactions where purchaser is a legal entity, including trusts, a new FinCEN rule starts March 1, 2026.

On March 1, 2026, FinCEN's new reporting rule for non-financed residential real estate goes into effect. This means that any qualifying property transfers on or after March 1st must be reported to FinCEN. It does not affect transfers before March 1st.

Briefly, here are some of the highlights from FinCEN's recent announcement.

What does FinCEN define as residential real property?

Residential real property includes single-family houses, townhouses, condominiums, and cooperatives, including condominiums and cooperatives in large buildings containing many such units, as well as entire buildings designed for occupancy by one to four families. These properties are reportable even if there is also a commercial element.

What kind of transfers have to be reported?

While this is often referred to as applying to "all-cash" purchases, the rule applies to a few other scenarios, too.

Under FinCEN's new rule, a reportable transfer is a non-financed transfer to a transferee entity or transferee trust of an ownership interest in residential real property. Transfers that are financed by a lender without an obligation to maintain an AML/CFT program and a requirement to file SARs are treated under this rule as non-financed transfers that potentially must be reported.

The rule applies to purchases of residential real property for any amount, as well as transfers of ownership for which no consideration is exchanged, such as a gift.

What information has to be reported?

Information that is required includes:

• the reporting person must submit information necessary to identify themselves;
• the residential real property being transferred;
• the transferor;
• the transferee entity or transferee trust;
• the individuals representing the transferee entity or transferee trust in the transfer;
• the beneficial owners of the transferee entity or transferee trust;
• the total consideration paid for the property, along with certain information about any payments made by the transferee entity or transferee trust.

Who has to report that information?

FInCEN has a "cascade" list to help transaction participants determine who should be the reporting person. Essentially, the answer depends on how the property transfer is set up. Feel free to contact our office if you have questions about "reporting person" identification and responsibilities.

The above is a very brief overview of the new FinCEN rule. FinCEN's full documentation is at their website: https://www.fincen.gov/rre.

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Questions about your specific transaction or portfolio?

Contact Scott Meyer at 469-916-7700 x115 or via email. We’ll evaluate your transaction and help you comply with FinCEN rules and regulations.

When It Matters™, you can count on us.