What is Required?
Beginning March 1, 2026, federal law requires that certain real estate transactions purchased with all cash or without institutional lender financing, where at least one buyer is an entity or trust, be reported to the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This law aims to identify the actual people behind property ownership, and is designed to combat money laundering which aids terrorist, the drug trade, and human traffickers.
What Does This Mean for My Transaction?
FinCEN reporting is required when a residential property with 1 to 4 units (e.g. single-family home, duplex, triplex, fourplex) is transferred to an entity (e.g. LLC, corporation, partnership) or trust, and no institutional financing is involved. If your transaction meets these minimum requirements, escrow is required to file a FinCEN Real Estate Report. The buyer will be required to provide detailed information about the ownership of the entity or trustee information, as well as information on the source of closing funds. If a transaction is reportable, the seller will also be required to provide some information.
Because this law requires your escrow agent to obtain this information prior to closing, closing timelines may be extended. Delays will occur when documentation provided by the buyer or seller is incomplete, signatures are missing, or beneficial owners are hard to reach. Please know that this law is a federal requirement, and escrow is simply complying – not adding red tape to the closing process. The sooner information is provided to escrow, the smoother your closing will be.
For more information on FinCEN, please talk to your escrow officer or visit www.fincen.gov
Resources
Is A Real Estate Report Required?