A major federal change is coming to real estate closings beginning March 1, 2026, and it affects Realtors as well as buyers and sellers involved in certain types of transactions. These new rules come from the Financial Crimes Enforcement Network (FinCEN)—a bureau of the U.S. Treasury—not the title insurance industry. Independence Title wants to make sure you know what is changing, why it is changing, and what it means for you. Most importantly:
- Independence Title is only acting as the information collector and report transmitter because federal law requires it.
- This is not a title insurance requirement, and our industry strongly opposed the expansion of the previous Geographic Targeting Orders.
- We do not have any discretion to opt out.
What Is the New Rule About?
Beginning March 1, 2026, FinCEN will require a Real Estate Report to be filed for non‑traditionally financed (“all‑cash”) transfers of residential property when the buyer is a legal entity or a trust. This is a nationwide requirement with no minimum purchase price. FinCEN’s purpose is to increase transparency and deter the use of real estate to hide unlawful funds.
Why Is This Happening?
FinCEN states the new rule aims to curb money laundering and the use of shell companies to hide ownership of real estate. These new rules replace years of more specific short-term “Geographic Targeting Orders” with a permanent nationwide requirement.
Which Transactions Are Affected?
A transaction is generally reportable if all three of these are true:
- The property is residential real estate (1–4 family homes, condos, townhomes, co‑ops, and certain land intended for such use).
- The buyer is an entity or trust (not an individual person).
- The transaction is non‑traditionally financed, meaning there is no traditional institutional mortgage from a lender that has federal anti‑money‑laundering requirements. This will include financing by hard money lenders and seller financing.
If all three apply, a federal report filing is usually required unless a specific exemption exists (for example, certain transfers due to death, divorce, or involving government entities).
Who Must File the Report?
FinCEN created a “reporting cascade”—a priority order that determines who must file if no party is pre‑designated. In most transactions, if a title company is involved, it will be the reporter because it will serve as the settlement or closing agent.
Again:
✔️ This is not optional.
✔️ This is not a title insurance product or requirement.
What Information Must Be Reported?
FinCEN requires specific details about:
- The reporting filer (person or entity submitting the report)
- The buyer entity or trust
- The beneficial owners (essentially anyone with 25% or more ownership interest or substantial control, senior officers, and persons with signatory authority)
- Identifying information for the beneficial owners to include:
- SSN or ITIN
- Identification, such as a Driver’s License or a Passport
- Address and phone number
- Occupation
- The seller (no BOI analysis for the seller, but still requires identifying information)
- The property and closing date
- The purchase amount and payment method
- Any “hard money” or non‑institutional financing is involved
Reports are not public. They are stored within the government’s Bank Secrecy Act system and accessed only by authorized officials.
What This Means for Realtors
Here’s what you can expect:
- More documentation from buyers: if your buyer is purchasing through an LLC, partnership, corporation, or trust, they will need to provide ownership and control information.
- Slightly longer prep time before closing: collecting federal reporting details may add steps to your transaction timeline.
- Increased need for early communication: if your buyer/ seller is using an entity or trust, please flag it as early as possible so our team can help keep the closing on track.
What This Means for Buyers and Sellers
Buyers using an entity or trust: you will be required to disclose information regarding the true beneficial owners of the entity or trust purchasing the home.
Sellers: Your information will also be included in the report, but your required information is less extensive.
All parties: It is important to know that:
- This information is not a public report.
- Independence Title is only transmitting information required by federal law.
Helpful Links for Realtors, Buyers, and Sellers
Here are plain‑English, consumer‑friendly resources:
- FinCEN Residential Real Estate Rule (Official Site) – https://www.fincen.gov/rre
- FAQs – https://www.fincen.gov/rre-faqs
- Quick Reference Guides – https://www.fincen.gov/rre-quick-reference-guides
- Reference Materials – https://www.fincen.gov/rre-reference-materials
Our Commitment to You
Independence Title is committed to supporting Realtors and clients through this transition with clear communication and helpful guidance. While this requirement adds a new federal reporting layer to certain transactions, we will continue to make closing as smooth and stress‑free as possible.
If you have questions, reach out—we are here to help.
