Starting December 1, 2025, the Residential Real Estate Rule from the Financial Crimes Enforcement Network (FinCEN) will take effect, adding new reporting requirements to certain real estate closings. While the rule is aimed at curbing money laundering, for everyday investors, it means more paperwork and reduced privacy in specific transactions.
What the Rule Covers
The new rule applies when:
- The property is residential real estate: 1-4 single-family homes, condos, townhomes, co-ops, or land intended for those homes.
- The buyer is an entity or trust: LLC, corporation, partnership, or trust.
- The deal is all cash or financed by a lender that is not subject to federal anti-money-laundering rules (this includes many small private or individual hard money lenders).
The title company or closing agent files a Real Estate Report with FinCEN when the transaction meets all three conditions.
What Gets Reported
The title or closing agent sends the report confidentially to FinCEN and does not make it public, but it must include:
- The beneficial owners of the entity or trust (name, date of birth, address, and taxpayer ID).
- The property details and closing date.
- The individual signing on behalf of the entity.
- Transaction details such as the purchase price, payment method, and the financial institution used for funds.
This level of reporting is new for real estate and will add another layer to the closing process.
Why It Matters for Investors
For years, many investors have relied on all-cash purchases through LLCs or trusts to move quickly and keep deals simple. Under this new rule, those transactions will now come with additional reporting requirements. That means:
- Less privacy: investors must disclose ownership information to the government.
- More paperwork: title companies will need additional documentation.
- Possible delays: closings could slow down as settlement agents adjust to the compliance process.
Many companies are already preparing for these changes. However, because the rule is new, systems, compliance routines, training, and documentation will take time and may slow down closings in some cases, especially all-cash deals to LLCs or trusts. Title companies may also see an initial bump in workload as they evaluate exemptions and reporting status.
Where Financing Changes the Picture
Here’s the key takeaway: the rule does not apply if a regulated lender finances your transaction.
That means when you finance your deal with Dominion Financial, your transaction is considered “financed” and falls outside the scope of this new rule. You can still buy in an LLC or trust, but without the extra FinCEN reporting slowing you down.
For investors, this makes financing an attractive alternative to all-cash purchases, helping you protect your structure, close faster, and avoid unnecessary compliance steps.
The Bottom Line
Starting in December 2025, all-cash/entity deals will face new reporting requirements at closing. If you plan to continue building your portfolio through LLCs or trusts, financing with a regulated lender like Dominion Financial is one way to keep your transactions smooth and free from added reporting requirements.
Note: Investors should consult with their title or closing agent for guidance on how this rule may apply to their individual transactions.
INVESTOR TAKEAWAYS
The Financial Crimes Enforcement Network (FinCEN) issued a rule requiring title companies and closing agents to report certain residential real estate transactions to help prevent money laundering. The rule applies when a property is purchased all-cash, by an entity or trust, and without financing from a federally regulated lender.
The FinCEN rule covers one-to-four-unit residential properties, including single-family homes, condos, townhomes, co-ops, and similar land. It applies when an LLC, corporation, partnership, or trust buys the property entirely in cash or uses a lender not subject to federal anti–money-laundering rules.
Investors who buy through LLCs or trusts using all cash will now face more documentation, reduced privacy, and potential delays at closing as title companies comply with the new requirements. Transactions may take longer while the industry adjusts to the reporting process.
No. If your deal is financed by a federally regulated lender, such as Dominion Financial, the FinCEN rule does not apply. Loans from regulated lenders already fall under anti–money laundering oversight, which exempts those closings from the additional reporting requirements.
Investors planning to buy through entities or trusts should talk with their title company and lender early in the process. Financing purchases through regulated lenders can help avoid compliance-related delays, preserve privacy, and keep transactions moving smoothly under the new framework.
