Single-family investor restrictions take effect under ROAD Act

A bipartisan housing package that includes a proposal by Sen. Raphael Warnock (D-Ga.) to limit large private equity firms and institutional investors from expanding their single-family home portfolios has become law after President Donald Trump neither signed nor vetoed the legislation within the constitutionally required 10-day window.

The 21st Century ROAD to Housing Act took effect July 11 without the president’s signature. Warnock’s office described the measure as the most significant federal housing package in a generation.

“I hear from Georgians across the state who have been clamoring for action from Washington on the affordable housing crisis, and this legislation is proof that when we center the people instead of the politics, we can get good policy done,” Warnock said in a statement. “I’m proud to have contributed to increasing our nation’s housing supply and lowering costs for hardworking Georgia families.”

The law prohibits large institutional investors that own or control at least 350 single-family homes from purchasing additional properties. The prohibition applies broadly to acquisitions — including purchases, transfers, mergers and bulk acquisitions — but does not require companies to sell homes they owned before the law took effect.

The legislation includes several exceptions. Institutional investors may continue to acquire newly constructed homes through build-to-rent developments; substantially rehabilitated homes through renovate-to-rent programs; homes purchased as part of qualifying lease-to-own and homeownership initiatives; properties acquired through foreclosure or other loss-mitigation activities; certain age-restricted housing communities; and transactions involving homes already owned by other institutional investors under specified conditions.

The new law addresses a January executive order issued by Trump that directs federal agencies to limit the role of large institutional investors in the single-family housing market. While the executive order focused on restricting the use of federal housing programs and called for legislation to codify the policy, the ROAD Act package establishes statutory limits on future purchases by covered institutional investors.

The broader housing legislation also includes provisions to increase housing supply; reform rural housing programs; encourage local governments and financial institutions to invest more in housing construction; provide grants and forgivable loans for home repairs and weatherizations; and penalize local governments that fail to meet housing goals.

The housing package also incorporates Warnock’s Appraisal Modernization Act, a measure intended to improve fairness in the home appraisal process.

The law comes as lawmakers and housing advocates continue to debate the role of institutional investors in the housing market. According to Warnock’s office, corporate investors own more than 72,000 single-family rental homes in the Atlanta metro area — more than one in four such properties in the region — and have expanded their presence into other parts of Georgia.

Warnock has argued that large private equity firms have made it more difficult for first-time and other prospective homebuyers to compete by purchasing homes in bulk and treating housing as an investment asset rather than as a place for families to live.