Publication
FinCEN Residential Real Estate Reporting Rule Now in Effect
By Zach Cooper and Eric Pezold
Key Takeaway
Effective March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) requires federal reporting of certain residential real estate transactions under the new Residential Real Estate Reporting Rule (31 CFR § 1031.320). This rule expands anti-money laundering oversight to non-financed transfers — including certain foreclosures — that were previously outside regulatory reach.
Transactions Subject to Reporting
A transaction triggers reporting when all three of the following apply:
- Residential real estate — Includes 1–4 family homes, condominiums, co-ops, townhouses, and vacant land intended for residential construction.
- Non-financed transfer — The purchase involves no mortgage from a traditional financial institution subject to anti-money laundering (AML) requirements. This includes all-cash deals and transactions funded through private or hard-money lenders.
- Buyer is a legal entity or trust — LLCs, corporations, partnerships, and most trusts (statutory and non-statutory) are covered. Transfers solely to individuals are not reportable.
What Must Be Reported
When a transaction is reportable, the reporting person must file a Real Estate Report with FinCEN. The report requires disclosure of key information about the transaction and the beneficial owners of the purchasing entity or trust, including:
- The identity and contact information of the transferee entity or trust
- Beneficial ownership information for individuals who directly or indirectly own or control the transferee
- The address and legal description of the property transferred
- The purchase price and date of closing
- The method of payment, including cash, wire transfers, cashier’s checks, cryptocurrency, or funds provided by private lenders
- Information identifying the reporting person and other professionals involved in the closing
The reporting person must also maintain supporting records for the transaction and provide additional documentation to FinCEN upon request.
Application to Foreclosures
Foreclosure sales and related transfers may be reportable if they meet the three-part test above — particularly where the acquiring party is an entity or trust and no AML-regulated financing is involved. Lenders, servicers, and investors acquiring Real Estate Owned (REO) properties through entities should evaluate whether reporting obligations apply.
Key Exemptions
The rule provides limited exemptions, including but not limited to:
- Transfers resulting from death, divorce, or court order
- Bankruptcy or court-supervised transfers
- Gifts to the transferor’s own revocable trust (no consideration)
- Transfers of easements
- Traditional mortgage-financed purchases
Exemptions are narrowly construed and should be evaluated on a transaction-by-transaction basis.
Filing Deadline and Responsibility
The Real Estate Report must be filed by the later of either:
- The last day of the month following the month in which closing occurs, or
- 30 days after the date of closing
Filing responsibility generally falls on settlement agents, title companies, or escrow providers, though legal professionals may be designated depending on transaction structure.
Action Items
- Review pipeline transactions closing on or after March 1, 2026, for reporting triggers
- Update due diligence procedures to capture beneficial ownership information for entity and trust buyers
- Confirm reporting responsibility in closing instructions and engagement letters
- Build additional time into closings for information gathering and compliance review
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 17 locations throughout the United States and in Mexico, including Phoenix and Tucson, Arizona; Los Angeles, Orange County, Palo Alto and San Diego, California; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno-Tahoe, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
