As of March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) is enforcing its new “Residential Real Estate Rule,”[1] which requires certain professionals involved in real estate closings and settlements to submit reports to FinCEN regarding non-financed transfers of residential real estate to legal entities or trusts.[2]  While the Rule became effective December 1, 2025, reporting requirements were postponed to reduce business burden.[3]

The Residential Real Estate Rule expands the Department of Treasury’s efforts to increase transparency and combat and deter money laundering through the illicit use of residential real estate. Transfer of an ownership interest in real property must be reported if the following conditions apply:

  1. The property is residential real estate;
  2. The property is transferred without financing from a bank or similar financial institution;
  3. The property is transferred to a reportable transferee entity or trust; and
  4. The transfer is not covered by an exception.

What constitutes residential real estate?

Residential real estate includes real property containing a dwelling or unit designed for occupancy by one to four families—single-family homes, town houses, condominium units, etc.—or on which the transferee intends to build such a dwelling or unit.[4] Shares in a cooperative housing corporation also constitute residential real estate. A timeshare transfer may be subject to reporting if it meets both the definition of residential real estate and an ownership interest.[5]

What constitutes a non-financed transfer?

A non-financed transfer means that the property is transferred without financing (i) secured by the property, and (ii) from a financial institution subject to anti-money laundering program and suspicious activity reporting requirements.[6] There is no consideration or value threshold, so neither the value of the property nor the sale price are relevant to determining applicability of the reporting requirement. Therefore, all cash purchases, seller-financed transactions, and gift transfers are “non-financed” for purposes of the Rule. If there are multiple transferees, the transaction is reportable with respect to any transferee receiving ownership in the property via a non-financed transfer.

What constitutes a reportable transferee?

A reportable transferee is any purchaser of residential real property that is not an individual. So long as at least one of the transferees in a transaction is reportable, the transfer is reportable.

Corporations, limited liability companies, partnerships, estates, associations, and statutory trusts are examples of reportable transferee entities. However, the Rule excludes sixteen types of transferee entities from the reporting requirement—including governmental authorities, banks and credit unions, securities brokers and exchange or clearing agencies, insurance companies, state-licensed public utilities, and subsidiaries of excepted entities.

A reportable transferee trust includes any legal arrangement when an individual places assets under the control of a trustee for the benefit of one or more beneficiaries or for a specified purpose. Testamentary trusts are not a reportable transferee, as they fall within the exception for transfers occurring as a result of death.

What transfers are excepted from the Rule?

Transfers of residential real property do not need to be reported for (i) a grant, transfer or revocation of an easement, (ii) a transfer resulting from the death of an individual (i.e., pursuant to a will, trust, operation of law, or contractual provision), (iii) a transfer incident to divorce, (iv) a transfer made to a bankruptcy estate, (v) a transfer supervised by a court, (vi) a transfer for no consideration made by an individual (with or without their spouse, if applicable) to a trust of which that individual, their spouse or both are the settlors or grantors, (vi) a transfer to a qualified intermediary for purposes of a like-kind exchange pursuant to IRC Section 1031,[7] or (viii) a transfer for which there is no reporting person.

How and when is a transfer reported?

The appropriate reporting individual for the transfer must submit a Real Estate Report, in the form provided by FinCEN, electronically through FinCEN’s free Bank Secrecy Act (BSA) E-Filing System at https://www.bsaefiling.fincen.gov. There is no fee for submitting a Real Estate Report directly through this system.[8] The Real Estate Report must be filed by the last day of the month following the month in which the date of closing occurred or thirty (30) calendar days after the date of closing, whichever is later.

What information must be reported?

The Real Estate Report must include information necessary to identify the reporting person, the residential real property being transferred, the transferor, the transferee entity or trust and its beneficial owners, certain individuals representing the transferee entity or trust (i.e., the signing individuals), any trustee that is an entity (if the transferee is a trust), total consideration paid for the property, and certain information about any payments made by the transferee entity or trust. Reported information will include, but is not limited to, full legal names and trade or “doing business as” names, physical street addresses, citizenship information, unique tax identification numbers (including social security numbers), and the amounts, sources and methods of payment for the transaction.

Who must report a transfer?

A Real Estate Report must be filed by the appropriate reporting individual, which is determined either by way of the “reporting cascade” set forth in the Rule or by way of a written designation agreement between the persons described in the cascading reporting order. If no person is performing the first function in the cascading order, the person performing the next function is the reporting individual, etc.:

  1. The person listed as the closing or settlement agent on the closing or settlement statement;
  2. The person that prepares the closing or settlement statement;
  3. The person that files the deed or other transfer instrument with the recording office;
  4. The person that underwrites an owner’s title insurance policy for the transferee;
  5. The person that disburses the greatest amount of funds in connection with the transfer;
  6. The person that provides an evaluation of the status of the title; or
  7. The person that prepares the deed or other transfer instrument.

If none of the above functions are performed, the transfer is not reportable. Transferees, transferors and beneficial owners cannot file a Real Estate Report unless they engage in one of the above functions or are designated by agreement for purposes of the transaction at issue.

Bottom Line

The closing process for nearly all real property transfers will need to adjust to FinCEN’s Residential Real Estate Rule. Failure to comply, whether negligently or willfully, could expose reporting individuals to civil penalties, criminal fines, and/or imprisonment. Winthrop & Weinstine’s Real Estate attorneys are tracking the industry-wide effort to implement these new reporting requirements. For more information, feel free to reach out to our Real Estate team, or your regular Winthrop contact.

[1] Anti-Money Laundering Regulations for Residential Real Estate Transfers, 89 Fed. Reg. 70258 (Aug. 29, 2024), https://www.federalregister.gov/documents/2024/08/29/2024-19198/anti-money-laundering-regulations-for-residential-real-estate-transfers.

[2] Financial Crimes Enforcement Network, Residential Real Estate Rule, https://www.fincen.gov/rre (last visited Feb. 21, 2026).

[3] Press Release, Financial Crimes Enforcement Network, FinCEN Announces Postponement of Residential Real Estate Reporting Until March 1, 2026 (Sept. 30, 2025), https://www.fincen.gov/news/news-releases/fincen-announces-postponement-residential-real-estate-reporting-until-march-1.

[4] The reporting individual may reasonably rely on information provided by the transferee to determine its intent for the land, absent knowledge of facts that would reasonably call into question the reliability of the information provided to the reporting person. See FinCEN, Residential Real Estate Reporting Frequently Asked Questions, U.S. Dep’t of Treasury, https://www.fincen.gov/system/files/shared/RREFAQs.pdf (issued Feb. 13, 2026).

[5] Ownership interest means rights held in residential real estate property that are demonstrated via a deed or, in the case of a cooperative housing corporation, through stock, shares, membership, certificate, or other contractual agreement evidencing ownership. Transfer of an interest in an assignment contract would not be considered a transfer of residential real property Id.

[6] Reporting individuals should reach out to lending institutions if they are unsure on whether they are subject to these programs and requirements. Id.

[7] A transfer from a qualified intermediary to the person conducting a like-kind exchange remains reportable if the exchanger constitutes a transferee entity or trust. Id.

[8]  Id.

March 3, 2026