As of March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) requires a Residential Real Estate Report be filed on certain “non-traditional financed” purchase transactions of residential real estate in any state where the buyer is a legal entity or a trust.
This reporting requirement is designed to increase transparency in the U.S. residential real estate sector and to combat and deter money laundering. The Rule requires the settlement agent in a covered transaction to collect and report details of the transaction and the parties to FinCEN.
Visit FINCEN.GOV for more information, or view the Quick Reference Guide here.
FinCEN Anti Money Laundering (AML) Rule
Affecting all states and operations
Non-traditional financed transactions includes not only all-cash sales, but also transactions involving private or seller-financing. It also includes sale transactions or lines of credit involving a loan by a bank, mortgage broker or mortgage banker or other source that is not required to have an anti-money laundering program.
Residential real estate
includes existing residential 1-4 family properties, co-ops, condominiums, and mixed use and apartment buildings. It also includes vacant land on which the buyer intends to build a residential structure primarily for occupancy by 1-4 families. Note that there are exemptions in the Rule which cover certain types of transfers which are not considered cash purchases.
Legal Entity
means at least one of the buyers/transferees must be a legal entity, LLC, corporation, partnership, trust, trustee or other non-natural person. As long as at least one of the transferees in a given transfer is a transferee entity or transferee trust, the transfer is reportable. However, the Real Estate Report only requires identifying information for the reportable transferees.
Transfer of Residential Property
A transfer of residential real property is any transfer of an ownership interest in residential real property that is demonstrated through a deed or, for an interest in a cooperative housing corporation, through stock, shares, membership, a certificate, or other contractual agreement evidencing ownership. This definition includes purchases of residential real property for any amount, as well as transfers of ownership for which no consideration is exchanged, such as a gift.
Who files the report?
The rule assigns responsibility through what’s called a “reporting cascade.” That means FinCEN identifies a specific order of who must file if multiple professionals are involved.
- The closing or settlement agent listed on the closing statement
- If none, the person who prepared the closing statement
- If none, the person who records the deed
- If none, the title insurance underwriter
- If none, the person disbursing the greatest amount of funds
- If none, the title abstractor or searcher
- If none, the person who prepared the deed
If more than one party fits these descriptions, they can enter a written designation agreement identifying which one will handle the reporting.
View Official FinCEN Reporting CascadeWhat types of transfers are exempt from reporting?
The following transfers are not reportable:
- A transfer that is a grant, transfer, or revocation of an easement.
- A transfer resulting from the death of an individual, whether pursuant to the terms of a will, the terms of a trust, the operation of law (such as transfers resulting from intestate succession, surviving joint owners, and transfer-on-death deeds), or by contractual provision (such as transfers resulting from beneficiary designations).
- A transfer incident to divorce or dissolution of a marriage or civil union (such as transfers required by a divorce settlement agreement).
- A transfer made to a bankruptcy estate.
- A transfer supervised by a court in the United States.
- A transfer for no consideration made by an individual, either alone or with their spouse, to a trust of which that -individual, that individual’s spouse, or both, are the settlors or grantors.
- A transfer to a qualified intermediary for the purposes of a like-kind exchange for purposes of Section 1031 of the Internal Revenue Code.
- A transfer for which there is no reporting person.
Note that this is not a comprehensive list of all transfers that are not reportable, and reporting persons should evaluate the specific facts of each individual transfer to determine whether it constitutes a reportable transfer under the rule.
View Exceptions Quick Reference GuideWhat information must be included in a Real Estate Report?
- Payment Information, including bank account details for sourcing funds
- Detailed payment information for payments made on behalf of the Transferee/Buyer
- Reporting person information
- Closing date
- Property address and full legal description
- Transferee/Buyer information
- Person(s) associated with the transferee (authorized signers and beneficial owners)
- Transferor/Seller information
- If the Transferor is Trust, provide the trustee’s information
- Purchase price
What this means for qualified Real Estate Transactions?
These reporting requirements require additional data collection. You can expect that buyers and sellers will need to provide additional information to comply with these reports. This information must be received prior to scheduling a closing to avoid delays at the closing table. It is critical that the following information is disclosed early in the transaction, when applicable:
- buyer entity or trust name and supporting documents for that entity/trust
- type of financing, whether it will be private financing, traditional financing or cash and the name of the lender
- source of funds (i.e. gift funds)
- embedded transfers within the transaction (i.e. developer to builder)
If any of this information changes during the course of a transaction it may trigger a new reporting requirement that may cause delays.
FAQ’s
Q: How about gift funds? Would we have to report those?
A: This depends on the transaction and how the buyer is obtaining the remaining funds to purchase the property: (a) if the remaining purchase funds are coming from a bank that has an anti-money laundering program and an obligation to report suspicious transactions, then this would not be a reportable transfer, or (b) if the remaining purchase funds are coming from anyone else (including a hard money lender), then this appears to be reportable.
Q: What if they pull from a HELOC to pay for the cash transaction?
A: Seems reportable since the mortgage loan is secured against a different property, not the property being acquired. REFERENCE: See the definition of non-financed transfer in 31 C.F.R. § 1031.320(n)(5).
Q: What about when Mom and Dad finance the purchase of the home?
A: Provided that the other two components of the three-part test are met (residential property and either a transferee entity or transferee trust), this seems reportable since the acquisition is being financed by Mom and Dad, who don’t have an obligation to maintain an anti-money laundering program and an obligation to report suspicious transactions. REFERENCE: See the definition of non-financed transfer in 31 C.F.R. § 1031.320(n)(5).
Q: What happens if a property is sold on a land contract or contract for deed to an entity—is it reportable?
A: This seems reportable since the acquisition is being financed by a party that does not have the obligation to maintain an anti-money laundering program and an obligation to report suspicious transactions. REFERENCE: See the definition of non-financed transfer in 31 C.F.R. § 1031.320(n)(5).
Q: If we have a tiered entity (the other entity is the member), is it safe to assume we need to drill down to the humans involved?
A: Yes, we think we’ll need to drill down to a flesh and blood individual. REFERENCE: See 31 C.F.R. § 1031.320(n)(1) and the definition of “beneficial owner,” providing that we look to 31 C.F.R. 1010.380(d) and 31 C.F.R. 1010.380(d)(1) to identify who are the beneficial owners. In 31 C.F.R 1010.380(d), a beneficial owner is defined as “…any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25 percent of the ownership interests of such reporting company.” See also the definition of “beneficial owner” in FinCEN’s FAQ.
Q: What if the legal entity (either transferee or transferor) has filed its report under the Corporate Transparency Act identifying its beneficial owners and signers? Is a real estate transfer to or from that entity still reportable?
A: Yes. Commentators, including ALTA, specifically asked FinCEN this question during the rule’s comment period, and FinCEN declined to except transfers due to an existing report under the Corporate Transparency Act.
Q: Do you think FinCEN will expand the scope of reportable transfers to commercial properties (not just residential ones)?
A: Why wouldn’t they? If FinCEN is catching the bad guys in part due to this reporting, why wouldn’t they expand the reporting to at least some commercial properties?