FinCEN's Residential Real Estate Rule

We're here to help you navigate and prepare for FinCEN's Residential Real Estate Rule (RRER) coming December 1, 2025.

What is the RRER?

All residential transfers of real property to a legal entity or a trust that are non-financed occurring on or after December 1, 2025 must be reported to FinCEN.

Defining all aspects of the rule is critical to understanding which transactions are impacted by the RRER. Visit our FAQ page to learn how each factor is defined. 

Should your transaction be identified as reportable, FinCEN’s requires the reporting person to submit information about:

  • The Transferee Entity or Trust

  • Each Beneficial Owner of the Transferee Entity or Trust

  • Any individuals signing on behalf of the Transferee during the transfer

  • The Transferor (e.g. the Seller)

  • The property being transferred

  • Certain Banking Information for Transferee, including source of funds

To comply with reporting deadlines, this information must be provided to Security 1st Title in writing prior to closing or transfer of the property. For further details, FinCEN’s final rule can be found here.

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What's the purpose of the RRER?

In short, the RRER’s purpose is to combat money laundering and increase transparency in the United States residential real estate market. FinCEN Director, Andrea Gacki summarizes it here,

“Illicit actors are exploiting the U.S. residential real estate market to launder and hide the proceeds of serious crimes with anonymity, while law-abiding Americans bear the cost of inflated housing prices.” 

FinCEN, or the Financial Crimes Enforcement Network, is a bureau of the U.S. Department of Treasury that plays a crucial role in combating financial crimes like money laundering and terrorist financing. It serves as a central hub for collecting, analyzing, and disseminating financial intelligence to law enforcement and other relevant agencies.

FinCEN administers The Bank Secrecy Act (BSA), also known as the Currency and Foreign Transactions Reporting Act, a U.S. law enacted in 1970 to combat money laundering and other financial crimes. It requires financial institutions to keep records and file reports on certain financial transactions, which are then used by law enforcement agencies to investigate and prosecute criminal activity.

FinCEN also plays a key role in implementing the Corporate Transparency Act, including the reporting of beneficial ownership information. This involves requiring certain companies to disclose who owns or controls them, enhancing transparency and accountability in the financial system.

Real estate has been consistently indicated as a risk in the National Money Laundering Assessment since at least 2015. The anticorruption group “Global Financial Integrity” estimated “at a minimum, $2.3 billion was laundered through the real estate sector in the U.S.” between 2015-2020.

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How could the RRER impact you?

The impact you experience will depend on your role within the real estate industry and your designation within specific transactions. For consumers, particularly those using legal entities and trusts, will be required to disclose additional ownership information in these specific transactions. 

Here’s the bottom line: If you work around/with residential real estate in any of the 50 states, Washington D.C., Puerto Rico, overseas territories and/or Indian lands, being aware of the RRER is crucial. Those who fail to properly report applicable transfers could face both civil and criminal penalties, including up to 5 years in prison.

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