Beginning March 1, 2026, select professionals involved in real estate closings and settlements are required to report information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network for non-financed transfers of residential real estate to legal entities or trusts.
The Department of the Treasury has long recognized that the illicit use of residential real estate can be used for money laundering or the storage of wealth for illicit actors. FinCEN steps that up as a threat to U.S. economic and national security. This new reporting requirement is designed to increase transparency in the residential real estate sector and to deter money laundering.
The new requirement does not apply to transfers of property to individuals. The names are out there so they can be checked against the various sanctions lists. The new requirement does not apply to financed transactions. The lender should be running the KYC check.
Transfers covered by this reporting requirement make up a small fraction of the market, but they have a high risk for involvement in money laundering and other crimes. This reporting requirement will presumably help law enforcement investigate suspicious residential real estate transfers .
In light of the reporting requirement, the residential real estate geographic targeting orders that FinCEN issued in October 2025 expired on February 28, 2026.
What is residential real estate? Under the Residential Real Estate Rule, residential real property means:
- Real property located in the United States containing a structure designed principally for occupancy by one to four families;
- Land located in the United States on which the transferee intends to build a structure designed principally for occupancy by one to four families;
- A unit designed principally for occupancy by one to four families within a structure on land located in the United States; or
- Shares in a cooperative housing corporation for which the underlying property is located in the United States.
What is a non-financed transaction that is subject to the report?
“a transfer that does not involve an extension of credit to all transferees … that is both (1) secured by the transferred property and (2) extended by a financial institution subject to anti-money laundering (AML) program requirements and Suspicious Activity Report (SAR) reporting obligations. Transfers that are financed by a lender without an obligation to maintain an AML program and a requirement to file SARs are treated under the rule as non-financed transfers that must be reported if other criteria making a transfer reportable are met.”
- The person listed as the closing or settlement agent on the closing or settlement statement;
- If no person described above is involved, the person that prepares the closing or settlement statement for the transfer;
- If no person described above is involved, the person that files with the recordation office the deed or other instrument that transfers ownership of the residential real property;
- If no person described above is involved, the person that underwrites an owner’s title insurance policy for the transferee with respect to the transferred residential real property, such as a title insurance company;
- If no person described above is involved, the person that disburses in any form, including from an escrow account, trust account, or lawyers’ trust account, the greatest amount of funds in connection with the residential real property transfer;
- If no person described above is involved, the person that provides an evaluation of the status of the title; or
- If no person described above is involved, the person that prepares the deed or, if no deed is involved, any other legal instrument that transfers ownership of the residential real property, including, with respect to shares in a cooperative housing corporation, the person who prepares the stock certificate.
Does this work?
Sean Hundtofte and Ville Rantala did some research. They noted a significant decline in corporate cash purchases of high-end real estate after the FinCEN Geographic Targeting Orders were first put into effect in 2016.
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