FinCen Quick Guide for Agents

This guide explains the new FinCEN reporting rule that takes effect March 1, 2026, requiring certain residential real estate transactions to be reported to the U.S. Treasury. The rule primarily applies to purchases of residential property made without a traditional bank loan when the buyer is a legal entity such as an LLC, corporation, partnership, or trust. It is intended to increase transparency and prevent money laundering by identifying the individuals who ultimately control entity buyers. The guide also outlines when reporting is required, what information may be requested from buyers, and how real estate professionals can prepare for the new requirements.

Download the Quick Guide Here

What Is the FinCEN Rule?

Beginning March 1, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network will require certain residential real estate transactions to be reported to the federal government. The rule is designed to help prevent money laundering and other financial crimes that can occur when real estate is purchased through shell companies or other legal entities that conceal the true owner of the property.

Under this rule, a report must generally be filed when residential property is purchased without a traditional bank loan and the buyer is a legal entity such as an LLC, corporation, partnership, or trust. In most cases, the settlement agent or title company will collect the required information and submit the report to FinCEN. While the reporting obligation falls on the settlement professional, real estate agents may see additional information requested from entity buyers prior to closing to ensure the transaction complies with the new federal requirements.

Why Does This Rule Exist?

FinCEN implemented this rule to prevent money laundering through residential real estate. Criminal organizations have historically used all-cash purchases through shell companies to hide the true owner of property.

The rule increases transparency by requiring reporting when certain entity buyers purchase residential property without traditional bank financing.

A FinCEN report is generally required when ALL three conditions are met:

  1. Residential Property
    1. 1-4 family homes
    2. condominiums
    3. townhomes
    4. vacant land intended for residential construction
    5. cooperative housing units
    6. Non-Financed Purchase: transactions without a traditional bank loan, such as
    7. all cash purchases
    8. private lenders
    9. hard money loans
    10. seller financing 
    11. investor funds 
    12. self-directed retirement accounts 
    13. NOTE: Transactions financed through a regulated bank or credit union are typically excluded.
    14. Buyer Is a Legal Entity: The purchaser is not an individual but a legal entity, such as
    15. LLC
    16. Corporation
    17. Partnership
    18. Trust
    19. Similar legal entity structure

Information Buyers May Be Asked to Provide

  • Legal entity formation documents (LLC, corporation, trust, etc.)
  • Names of beneficial owners (individuals who ultimately control the entity)
  • Identification for beneficial owners
  • Contact information for the entity and its owners
  • Source of funds information in certain circumstances

Best Practices for Real Estate Agents: to help ensure a smooth closing

✔ Let your title company know early if the buyer is purchasing through an LLC or trust

✔ Encourage entity buyers to gather their formation documents and ownership details early

✔ Prepare buyers for possible compliance questions before closing

✔ Contact your title team if you are unsure whether the rule applies

Examples Where Reporting May Apply

  • An investor purchases a rental property using an LLC with cash
  • A buyer purchases a home using a self-directed IRA LLC
  • A corporation purchases residential property without bank financing

Who Files the Report?

Your title company handles the compliance requirements and files the FinCEN report when required. Our role is to ensure the process remains smooth while protecting buyers, sellers, and real estate professionals from unnecessary risk. Entity buyers may be asked to provide beneficial ownership information, entity documentation, and identification prior to closing.

Questions/Concerns: Please feel free to reach out to us directly by call or email.