Multifamily developers with active or planned build-to-rent (“BTR”) or single-family rental (“SFR”) strategies should treat the Senate-passed 21st Century ROAD to Housing Act as an immediate transaction and underwriting issue. In its current form, the Act would do more than simply regulate scattered-site SFR acquisition by institutional investors—it would also impact many planned or active BTR projects and would require that the homes comprising BTR projects be sold after seven years.

1.      Background and Legislative Status

On March 12, 2026, the U.S. Senate passed the 21st Century ROAD to Housing Act (the “Act”), which contains critical provisions for multifamily developers and capital partners with active or planned build-to-rent (BTR) or single-family rental (SFR) strategies.[1]

The Act traces back to two different bills: (1) the Senate’s ROAD to Housing Act of 2025 (S. 2651), which moved through the Senate Banking Committee in 2025 and later appeared in the Senate-passed National Defense Authorization Act before falling out of the final defense bill, and (2) the House’s Housing for the 21st Century Act (H.R. 6644), which passed the House on February 9, 2026.[2] On March 2, 2026, Senate Banking Committee Chair Tim Scott and Ranking Member Elizabeth Warren released the combined 21st Century ROAD to Housing Act, and, on March 12, 2026, the Senate passed it by a vote of 89–10.[3] Buried within Section 901 of the Act (“Section 901”) is a restriction that would prohibit a broad category of institutional investors from purchasing or constructing single-family homes.[4]

Importantly, the House-passed bill (H.R. 6644) did not include the institutional-investor restriction now codified in Section 901.[5] As a result, the House now must either take up the Senate text inclusive of the institutional-investor restriction or negotiate a reconciled version before the Act can reach the President.[6]

The Act enjoys unusual bipartisan momentum and White House support, but it also faces headwinds in the House, where leaders have signaled that they are unlikely to simply pass the Senate version unchanged.[7] [8]

2.      What Section 901 Does

Section 901 prohibits a “large institutional investor” from purchasing, or entering into a contract to “purchase,” any “single-family home.”[9] The statute defines “purchase” broadly to include mergers, acquisitions, foreclosures, bulk purchases, and, critically, new construction.[10]

A “single-family home” is defined as “a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household,” excluding manufactured homes.[11] On the face of the text, triplexes and fourplexes should fall outside Section 901. Accordingly, acquisition or construction of three- and four-unit townhome projects—a common design—should be excluded from the restrictions of Section 901. The statute is less clear on hybrid formats such as duplex communities and cottage-style layouts that are part of a BTR project. Those questions will likely turn on any future Treasury guidance and project-level facts, such as whether the homes are separately platted.[12]

The definition of “large institutional investor” is broad enough to reach many of the structures commonly used in horizontal rental development. It covers a for-profit entity engaged in “investing in, owning, renting, managing, or holding single-family homes” if, beginning after enactment, the entity directly or indirectly controls at least 350 single-family homes in the aggregate, excluding homes acquired in excepted purchases.[13]

The operative prohibitions, disposition rules, and penalties do not begin until 180 days after enactment, and they sunset 15 years after that effective date.[14] Violations of Section 901 carry significant penalties, inclusive of civil penalties of up to the greater of $1,000,000 per violation or three times the purchase price of the home.[15]

3.      The Statutory Exemptions

Section 901 contains a series of enumerated exemptions to the general prohibition on institutional ownership of single-family homes.[16] While the statute includes several technical and programmatic carve-outs, two categories are of primary importance for developers: (1) grandfathered and pre-enactment activity and (2) the build-to-rent exemption.[17]

First, Section 901 effectively grandfathers existing portfolios and pre-enactment activity.[18] The institutional investor prohibition applies only to homes “purchased” after enactment, and the statute expressly provides that institutional investors are not required to divest homes owned prior to that date.[19] Because “purchase” is defined to include construction, this raises an important timing issue for developers: homes that are completed prior to enactment should be deemed to be purchased before enactment and fall outside the scope of the prohibition.[20]

Second, a significant exception for developers is the BTR exemption in Section 901(a)(2)(B). This provision allows large institutional investors to acquire newly constructed single-family homes for use as rental housing, including within BTR communities.[21] But that exception to the institutional investor restriction comes with a major catch: subsection (c) requires homes acquired or constructed under the BTR exemption to be sold to an individual homebuyer within seven years.[22]

This build-to-rent exemption, while intended to provide relief for BTR developers, is especially problematic for any single-family rental strategy paired with the Low-Income Housing Tax Credit (“LIHTC”) program. Tax credit equity investors generally must own LIHTC projects for at least the 10-year tax credit period to receive the full benefit of the LIHTC credits.[23] A forced sale at year seven would obviously disrupt this expectation. Moreover, the LIHTC program explicitly requires a 15-year compliance period and a 30-year extended-use period during which the units must be rented to individuals at certain income levels.[24] These LIHTC requirements are patently incompatible with the Section 901 requirements for individual homeownership after seven years, and make the BTR exemption largely unusable for LIHTC-based SFR or BTR strategies.

4.      Implications for Multifamily Developers

Even with the exemptions, active BTR and SFR projects will be materially affected by the Act. Because homes purchased or constructed before enactment are expressly grandfathered, developers should evaluate whether to defer starting construction on new single-family homes that are likely to deliver into the post-enactment regime and instead accelerate vertical completion and certificates of occupancy on homes already underway. That will not be the right answer for every deal, but Section 901 makes timing, platting, and completion assumptions far more consequential than they were a month ago.

Capital markets are already reacting. Executive Order 14376 directed agencies to stop facilitating certain large-investor single-family acquisitions and specifically told the Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac to refrain from insuring, guaranteeing, or securitizing purchases of single-family homes by large institutional investors.[25] Subsequent industry reporting indicates that the Senate’s seven-year forced-sale concept has already caused lenders and equity providers to pause upcoming BTR projects.[26]

That does not mean the Act is uniformly negative for multifamily developers. Outside Section 901, the Act contains several supply-side provisions that may create meaningful opportunities for housing developers, including a higher cap on bank public-welfare investments, CDBG eligibility for new affordable housing construction, NEPA streamlining, planning and implementation grants tied to housing production, an innovation fund rewarding measurable supply gains, HOME reforms, and provisions that could simplify voucher inspection treatment for LIHTC and other assisted properties.[27]

5.      What You Should Do Now

First, audit active and planned BTR and SFR projects against the Act. That means identifying whether the sponsor or investors could trip the 350-home threshold, whether the product fits the two-unit definition of single-family, and whether a seven-year sale requirement may apply to completed homes.

Second, revisit the structuring of new or upcoming BTR projects. Sponsors considering BTR or SFR projects should assess how the Act could affect their deals.

Third, stay engaged during the House process and consult counsel before making new acquisitions or capital deployment decisions. Section 901 is not yet law, and the House could revise or remove the seven-year disposition requirement. But the Senate vote, White House support, and early capital-markets reaction mean this issue already warrants close attention.

[1]21st Century ROAD to Housing Act, H.R. 6644, 119th Cong. § 901 (as passed by Senate, Mar. 12, 2026), https://www.govinfo.gov/content/pkg/BILLS-119hr6644eas/pdf/BILLS-119hr6644eas.pdf.

[2]Housing for the 21st Century Act, H.R. 6644, 119th Cong. (as passed by House, Feb. 9, 2026), https://www.congress.gov/bill/119th-congress/house-bill/6644/text/eh.

[3] Press Release, U.S. Senate Comm. on Banking, Hous., and Urban Affairs, U.S. Senate Passes Chairman Scott’s Historic Housing Affordability Legislation (Mar. 12, 2026), https://www.banking.senate.gov/newsroom/majority/us-senate-passes-chairman-scotts-historic-housing-affordability-legislation.

[4] Section 901, titled “Homes Are For People, Not Corporations,” states that “[n]o large institutional investor may purchase, or enter into a contract to directly or indirectly purchase, any single-family home.” H.R. 6644, 119th Cong. § 901(b)(1).

[5]Office of Mgmt. & Budget, Exec. Office of the President, Statement of Administration Policy, H.R. 6644 – Housing for the 21st Century Act (Feb. 9, 2026), https://www.whitehouse.gov/wp-content/uploads/2026/03/SAP-HR6644.pdf.

[6]Cong. Rsch. Serv., R48849, Housing for the 21st Century Act (updated Mar. 13, 2026), https://www.everycrsreport.com/reports/R48849.html.

[7] Melissa Quinn, Senate Approves Sweeping Bipartisan Housing Bill, but Roadblocks Remain in the House, CBS News (Mar. 12, 2026), https://www.cbsnews.com/news/senate-housing-bill-21st-century-road-to-housing-act/.

[8] Housing Fin., Senate Passes 21st Century ROAD to Housing Bill, https://www.housingfinance.com/policy-legislation/senate-passes-21st-century-road-housing-bill.

[9] H.R. 6644, 119th Cong. § 901(b)(1).

[10] Id. § 901(a)(5).

[11] Id. § 901(a)(3).

[12] Under the Act, “the Secretary of the Treasury may issue regulations . . . to carry out the purposes of [the Act], including regulations to . . . further clarify the application of the terms ‘large institutional investor’, ‘single-family home’, and ‘excepted purchase.’ ” Id. § 901(b)(4)(A)(iii).

[13] Id. § 901(a)(4)(A).

[14] Id.

[15] Id.

[16] Id. § 901(a)(2).

[17] Id. §§ 901(b)(3)(A), 901(a)(2)(B).

[18] Id. § 901(b)(3)(A).

[19] Id.

[20] Id. There is no guidance in the statute on what level of completion would be needed for a home to be considered “purchased” prior to enactment.

[21] Id. § 901(a)(2)(B), which states:

The term “excepted purchase” means any purchase of a single-family home that is . . . pursuant to a build-to-rent program where the large institutional investor purchases newly constructed single-family homes to be managed as rental properties, whether as communities exclusively of renter-occupied single-family homes or as communities of single-family homes that are both owner- and renter-occupied

[22] Id. § 901(c)(1)(A), which states:

With respect to the purchase by a large institutional investor of a single-family home described in [the BRT exception], the large institutional investor shall dispose of the single-family home to an individual homebuyer not later than 7 years after the date of purchase.

[23] See 26 U.S.C. § 42(f)(1).

[24] 26 U.S.C. §§ 42(i)(1), 42(h)(6).

[25] Exec. Order No. 14,376, 91 Fed. Reg. 3023 (Jan. 23, 2026), https://www.federalregister.gov/documents/2026/01/23/2026-01424/stopping-wall-street-from-competing-with-main-street-homebuyers.

[26] John Burns Rsch. & Consulting, Congress’ Housing Bill Is Already Freezing Homebuilding-And It Hasn’t Even Passed (Mar. 24, 2026), https://jbrec.com/insights/21st-century-road-to-housing-act-btr-impact/.

[27] Bipartisan Pol’y Ctr., What’s in the 21st Century ROAD to Housing Act? (Mar. 10, 2026), https://bipartisanpolicy.org/explainer/whats-in-the-21st-century-road-to-housing-act/.

April 3, 2026