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- BREAKING: Highlights & Implications from Trump's Executive Order on Institutional SFR
BREAKING: Highlights & Implications from Trump's Executive Order on Institutional SFR
New details from White House tonight: Build-to-rent communities excluded from the order, while scattered-site SFR faces suddenly murky regulatory outlook
Jay Parsons
January 20, 2026
7 Key Highlights, 2 Big Open Questions, and 5 Possible Implications
President Trump just released his executive order on “stopping Wall Street from competing with Main Street homebuyers.” If you missed our previous newsletters breaking down why a ban would bring limited benefit to wanna-be homebuyers and also 11 myths about institutional SFR investors, click those links. Or our podcast episode on the topic, too.
Here are some quick thoughts… with friendly reminder I’m not a lawyer or an investment advisor, so consult one of them if this order may impact you.
7 Key Highlights from the Executive Order
It singles out “large institutional investor” but does not define it. Instead, it orders the Treasury to define it within 30 days.
It doesn’t actually ban institutions from buying houses (at least as far as I can tell, but – of course – consult a legal expert if this could impact you). That’s presumably due to limits of what the White House can do by executive order. But it does order White House staff to “prepare a legislative recommendation to codify the policy” via Congress “so that large institutional investors do not acquire single-family homes that could otherwise be purchased by families.”
Instead, the executive order attempts to discourage and limit institutional homebuying through numerous paths. Most of them are somewhat insignificant – like telling Fannie Mae and Freddie Mac not to help institutional investors buy homes (via mortgages, securitization, etc.) There are plenty of other sources for debt, though, so that’s not a deal killer.
Section 4(b) is maybe most impactful if only for its very open-ended, undefined threats. It orders the Department of Justice and the Federal Trade Commission to “review substantial acquisitions … for anti-competitive effects” and to “prioritize enforcement of the antitrust laws, as appropriate, against coordinated vacancy and pricing strategies by large institutional investors in local single-family home rental markets.”
It orders Department of Housing and Urban Development to create new reporting around institutional investors/buyers of single-family rentals “participating in Federal housing assistance programs,” like vouchers. Such red tape could further disincentivize voucher acceptance even for existing SFR, depending on how its rolled out, if it’s received negatively.
It focuses on acquisitions, but does elude to potential impacts to existing SFR portfolios, too. Specifically, it orders the Treasury to “review the rules and guidance that relate to large institutional investors acquiring or holding single-family homes and consider revising them.” We don’t know exactly what that means, but theoretically it could mean adjusting tax policy in ways unfavorable for SFR owners. In an earlier interview, Treasury Secretary Scott Bessent noted SFR investors “have a tremendous tax advantage” because “they can take depreciation, they can take expensing.”
It carves out build-to-rent communities. Specifically, it calls for “narrowly tailored exceptions for build-to-rent properties that are planned, permitted, financed, and constructed as rental communities.” Such explicit clarity is very encouraging language for BTR developers and investors. On the flip side, that carve-out appears to exclude purchases from homebuilders within for-sale subdivisions – which has been a favored strategy for homebuilders and SFR operators alike.
Two Big Open Questions:
No. 1: What is an institutional investor?
The executive order specifically calls out “Wall Street.” Traditionally, “institutional investors” are defined as those with 1,000+ homes. But Secretary Bessent, in an interview earlier this month, floated much lower numbers. He said: “We want to keep the traditional mom and pop owners in… We will decide what the correct level is. Is it a dozen homes? Is it two dozen? What makes you an aggregator?”
If the threshold is set that low, the biggest impact will NOT be to Wall Street (which represents 0.5% of home sales, and in recent periods has sold more than its bought), but to small and mid-sized local/regional business. Those groups typically represent around 4-6% of home sales, according to data from John Burns Research and Consulting.
But it’s worth noting that the group Bessent said would be excluded (mom-and-pops) are still, by far, the largest chunk of investment buyers. Burns data shows SFR owners with fewer than 10 homes typically comprise 12-15% of home sales in recent years.
No. 2: What about acquisitions of existing SFR portfolios?
This gets messy for a lot of reasons. The executive order specifically states that “large institutional investors should not buy single-family homes that could otherwise be purchased by families.”
We don’t yet know what exactly that means, and I’m no legal expert, but presumably it’d be very difficult/unlikely to force an existing SFR investor to sell an existing SFR portfolio — particularly given that the vast majority of those homes would likely be occupied with renters.
5 Possible Implications
While the executive order doesn’t appear to be an outright ban, it brings a huge cloud of regulatory uncertainty into the SFR business. That alone (along with implied legal threats) will likely discourage LP investors backing institutional SFR funds – at least for the short term until the rules are clarified/codified. Some will fight to keep going. But it won’t shock me if others choose not to. Given many institutional SFR investors were already shifting heavily into build-to-rent, some may determine it’s not worth the fight to maintain the right to continue buying individual houses when they were already scaling down that activity.
Dedicated BTR developers and investors could be the big winner, as some capital shifts from scattered-site SFR into BTR communities. That strategy allows investors to meet growing demand and favorable demographics for single-family rental homes while steering clear of potential regulatory risk. Of course, larger institutional SFR groups have been shifting away from single-home acquisitions and more into new construction for years now. This action (regardless its outcome in Congress) likely expedites that shift.
The executive order seems likely to limit/freeze homebuilders from selling individual homes to SFR groups. Small mom-and-pops could fill some of that gap, but lack the scale to do the bulk pre-purchase agreements that homebuilders have said allows them to build more total housing.
Depending on how “institutional investor” is defined, the biggest losers could be small and mid-sized SFR companies who lack resources (scale, capital) to build BTR communities.
Over the longer term, SFR renters could face reduced supply and higher rent growth. That’s not spin, it’s just the reality of supply and demand – particularly in neighborhoods far from build-to-rent communities. Because so many SFR renters do not qualify for a mortgage (and others prefer still renting for lifestyle reasons), there will still be ample demand for SFR — and those families still need homes.
— My Latest Posts on LinkedIn —
Here are some recent posts if you missed them:
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This article in The Wall Street Journal shows us why the best tenant protection is to build a lot more housing.
Here’s everything we know (and don’t know) about President Trump’s proposed ban on institutional investors from buying houses.
There are many proposed flaws in the arguments for banning institutions from buying houses, starting with the myth that single-family rental supply is increasing as investors take houses into the rental market.
— Now Spinning on The Rent Roll Podcast —
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COMING THURSDAY: Episode 68: Q1’26 Multifamily Update and Outlook with RealPage’s Carl Whitaker
Episode 67: Top 10 Myths About Institutional Investors in Housing with Baruch College’s Joshua Coven.
Episode 66: Q1'26 SFR/BTR Update and Outlook with NexMetro’s Josh Hartmann
Episode 65: 15 Predictions for Apartments and SFR in 2026 with JBREC’s John Burns
Episode 64: What I Got Wrong (and Right!) in 2025 … Plus a multifamily capital markets update with Newmark’s Mike Wolfson
Episode 63: Green Shoots in Multifamily? Maybe. With CAPREIT’s Andrew Kadish
Episode 62: How Greystar Sees Property Management with Greystar’s Toni Eubanks
Episode 61: A.I. and Rental Housing with Funnel’s Tyler Christiansen
