Beginning in 2026, new federal reporting requirements issued by the Financial Crimes Enforcement Network (FinCEN) will affect certain residential real estate transactions across the United States. These regulations, known as the FinCEN Residential Real Estate Reporting Rule, are designed to help prevent money laundering and increase transparency in property purchases made through legal entities such as LLCs, corporations, and trusts.
For homebuyers, real estate agents, and investors, the most noticeable change will be that title companies and settlement agents must collect additional information before closing in certain transactions.
Why FinCEN Created These Real Estate Reporting Requirements
Federal regulators have identified residential real estate as a potential channel for concealing illicit funds, particularly when property is purchased without a mortgage and through an entity such as an LLC or trust.
Under the new FinCEN rule, certain non-financed residential real estate transfers involving legal entities must be reported to the federal government. Title companies and settlement agents are responsible for collecting the required information and submitting the report to FinCEN through a secure electronic system.
The goal of the rule is to provide transparency about who ultimately owns or controls entities purchasing residential property.
What This Means for Realtors and Homebuyers
If a transaction falls within FinCEN’s reporting requirements, our office will need to collect additional documentation and identifying information before closing.
This may include:
- Identification information for individuals who own or control an LLC, corporation, or trust purchasing the property
- Copies of government-issued identification
- Information about the ownership structure of the purchasing entity
- Confirmation of whether the transaction is financed or an all-cash purchase
This information is submitted to FinCEN as part of a confidential federal report and is not recorded in public property records.
Which Real Estate Transactions Are Most Likely to Be Affected
Most traditional home purchases will not be impacted by the new rule.
However, additional reporting may apply when:
- Residential property is purchased without bank financing
- The buyer is an LLC, corporation, partnership, or trust
- The transaction involves cash or private financing
These types of transactions are often referred to as non-financed entity purchases.
How the FinCEN Rule May Affect the Closing Process
To comply with federal law, title companies must ensure that the required information is collected before closing can take place.
To help keep your closing on schedule, we recommend:
✔ Informing your title company early if the buyer will be purchasing through an LLC or trust
✔ Providing requested identification and ownership information as soon as possible
✔ Confirming whether the purchase will involve mortgage financing or a cash purchase
Providing this information early allows us to complete the required FinCEN real estate report without delaying the closing process.
Our Commitment to a Smooth Closing
Our team is committed to making every real estate closing as smooth and efficient as possible while complying with new federal regulations.
These new FinCEN reporting requirements for real estate transactions simply add an additional compliance step for certain transactions. By working together and providing requested information early, we can ensure that your closing proceeds on schedule.
If you have questions about FinCEN real estate reporting requirements or how they may apply to an upcoming closing, our office is happy to help guide you through the process.