Is FinCEN's all-cash home purchase rule in force in the United States?

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Two different risks meet at an American closing table. One is the risk that a home bought without a mortgage, in the name of a company or a trust, is used to hide money: that is what the federal Residential Real Estate Rule was written to address. The other is the risk that an honest buyer's own money is diverted on its way to the settlement agent: that is closing wire fraud. Both sit in the same category for anyone who works on a sale, and they are easy to confuse, because both end with someone asking a buyer for information at the last minute.

The first question has a dated answer. According to the Financial Crimes Enforcement Network (FinCEN), the Treasury bureau that issued the rule, a federal court vacated it on 19 March 2026, and the government has appealed. This guide sets out where the rule stands on FinCEN's own pages, what it required as written, who would have filed, and what the penalties were. It then turns to the wire: how the fraud works according to the Consumer Financial Protection Bureau (CFPB), what that agency tells buyers to do, and what the American Land Title Association (ALTA) publishes for settlement offices.

FinCEN, Residential Real Estate Rule frequently asked questions, describing the rule as written before the court order of 19 March 2026.

Where the rule stands

The rule is federal. It is codified at 31 CFR 1031.320, and FinCEN's frequently asked questions say that, as written, it required a report for every reportable transfer with a closing date on or after 1 March 2026.

It ran for less than three weeks. FinCEN states that on 19 March 2026 the United States District Court for the Eastern District of Texas issued an order vacating the Residential Real Estate Rule, after finding that FinCEN lacked the legal authority to issue it. FinCEN adds that two other judges had rejected challenges to the rule, and that it is appealing the decision through the Department of Justice.

On 18 May 2026 FinCEN published three questions and answers on the consequences. The second says that, while the order remains in force, reporting persons are not required to file Real Estate Reports and face no liability for not filing. The third looks ahead: if the order is overturned, no filing will be required after the fact for transfers that took place while it was in force, and FinCEN will issue guidance on when reporting begins.

Three points are not on FinCEN's pages as read for this guide, and they are left open here rather than guessed: the name and number of the court case, the progress of the appeal since 18 May 2026, and how FinCEN treats closings dated between 1 March and 18 March 2026, before the order. Anyone who handled a closing in that window has a question for FinCEN's own guidance or for counsel, not one this guide can settle.

Everything in the next six sections therefore describes the rule as written. It matters for two reasons. The appeal could bring the rule back, with a start date FinCEN would then announce. And the rule's definitions show what a settlement office would have had to ask a company or trust buyer for.

Which purchases the rule covered

FinCEN's page on the rule says the Treasury regards the illicit use of residential real estate as a threat to the economic and national security of the United States, and describes the reporting requirement as a way to increase transparency in the sector and to deter money laundering.

A transfer was reportable, in FinCEN's wording, when four conditions were met together: residential real property was transferred; the transfer was non-financed; the transferee, meaning the party receiving the property, was an entity or a trust; and no exception applied. Remove any one of the four and no report was due.

Residential real property has a precise meaning in the rule. FinCEN lists a structure designed principally for occupancy by one to four families; land on which the transferee intends to build such a structure; a unit designed for one to four families inside a larger structure; and shares in a cooperative housing corporation. The property may be anywhere in the United States, its territories or Indian lands. An apartment building designed for more than four families is outside the rule, while a condominium unit for one to four families is inside it. FinCEN's answers also say that a home above a shop still counts, and that vacant land counts only where the transferee intends to build a one-to-four-family structure on it.

Non-financed is the term that stands in for what the trade calls all-cash, and it is wider. A transfer was non-financed when no credit secured by the property was extended to all transferees by a financial institution that has both an anti-money laundering programme obligation and a duty to file suspicious activity reports. FinCEN gives banks, credit unions, mortgage companies, Fannie Mae and Freddie Mac as examples of lenders that meet the test. A loan from a private lender without those obligations left the transfer non-financed, even though money was borrowed. The reporting person was allowed to rely on the lender's own statement about whether it carries those obligations.

There was no price floor. FinCEN says in terms that no dollar threshold applies, so a low-price transfer was reportable, and so was a gift.

The rule did not reach individuals buying in their own names. FinCEN's answers say a transfer to individuals alone is not reportable: at least one transferee had to be an entity or a trust.

Entities, trusts and the exceptions

A transferee entity is defined by what it is not. According to FinCEN it is any person other than a transferee trust or an individual, a group that takes in corporations, partnerships, estates, associations and limited liability companies. Sixteen categories of entity are excepted. FinCEN's examples include securities reporting issuers, banks, credit unions, insurance companies and governmental authorities, together with their subsidiaries. The common thread is that these bodies already answer to a regulator or a public filing regime.

A transferee trust was covered whether title was taken in the name of the trust or in the name of the trustee. Recording the property in the trustee's name did not take the purchase outside the rule. Four kinds of trust are excepted; FinCEN names statutory trusts and trusts that are securities reporting issuers among them.

Separately from who the buyer is, some kinds of transfer were excepted whatever the buyer. FinCEN's list covers:

• the grant, transfer or revocation of an easement;
• a transfer resulting from a death;
• a transfer incident to a divorce;
• a transfer to a bankruptcy estate;
• a transfer supervised by a court;
• a transfer for no consideration by an individual to a trust that the same individual settled;
• a transfer to a qualified intermediary for a like-kind exchange under section 1031 of the tax code.

The last item is narrower than it looks. FinCEN's answers say only the transfer to the intermediary is excepted; the onward transfer from the intermediary to a company or trust could still be reportable. The same answers say that assigning a purchase contract was not itself a reportable transfer, although the assignee's final purchase could be.

The estate-planning exception also has an edge. It applies where an individual moves a home into a trust they created, for nothing. A purchase by that trust from a third party, paid without qualifying financing, met all four conditions.

Who would have filed: the reporting cascade

The rule did not put the filing duty on the buyer. It put it on one professional involved in the closing, chosen by a ranked list that FinCEN calls the reporting cascade. The reporting person was whoever performed the first function on the list that anybody performed in that transfer.

Where a closing or settlement agent is listed on the statement, the cascade stops at the first tier. The lower tiers exist for transfers with no settlement agent at all, such as a deed prepared by a lawyer and recorded directly: there, the person recording the deed, or failing that the person who drew it up, carried the duty. FinCEN lists a transfer in which nobody performs any of the seven functions among the excepted transfers.

Real estate agents are not on the list. FinCEN says an agent acting only as an agent was not a reporting person; an agent would have been drawn in only by also performing one of the seven functions. Financial institutions that already have anti-money laundering programme obligations were exempt from acting as reporting persons. FinCEN's answers add that work done by an employee counts as the employer's, and that a lawyer practising alone could be a reporting person.

The parties in the cascade could move the duty between themselves by a designation agreement. FinCEN sets conditions: the agreement is in writing, it is made for one transfer, and a blanket agreement covering many transfers is not allowed. Every party to it keeps a copy for five years. An outside vendor could be asked to submit a report on a reporting person's behalf, but according to FinCEN could not be designated as the reporting person.

What a Real Estate Report asked for

The report had a fixed scope. FinCEN describes it as covering the reporting person, the property (its street address and its legal description), the transferee, the transferee's beneficial owners, the individuals who signed documents for the transferee, the transferor, and the consideration and payments.

Beneficial owner is the central term. For an entity, FinCEN defines it as an individual who, as of the closing, either exercises substantial control over the entity or owns or controls at least 25 per cent of its ownership interests. A worked example shows how the two limbs interact; the companies are invented for illustration. A limited liability company with four members holding 25 per cent each has four beneficial owners by ownership alone. A company with five members holding 20 per cent each has none by ownership, since nobody reaches 25 per cent, but any individual who exercises substantial control over it is still a beneficial owner. A structure with many small holders did not escape the definition.

For a trust the list is by role. FinCEN names the trustees, any person with authority to dispose of trust assets, certain beneficiaries, and a grantor or settlor who has the right to revoke the trust.

On payments, FinCEN's answers say the report gave the total consideration and, for each payment, its amount and method, with the institution and account it came from when it was drawn on an account, and the payer's name where the payer was not the transferee.

The reporting person was not expected to investigate. FinCEN says it could rely on information supplied by others, unless it knew facts that called that information into question. For beneficial ownership the reliance worked through a written certification by the transferee or its representative that the details given were correct to the best of their knowledge.

Two limits made the duty strict all the same. FinCEN states that an incomplete report was not permitted, even where a party refused to cooperate; its answers say that a reporting person unable to collect everything required could consider declining to perform the function that triggered the duty. And a Real Estate Report could not be replaced by a suspicious activity report: the two were separate filings.

Deadlines, filing and records

The filing deadline, in FinCEN's words, was the later of two dates: the last day of the month following the month of closing, or 30 calendar days after the closing.

For almost every closing the first date is the later one. As a worked example with invented dates, take a closing on 10 March. The last day of the following month is 30 April; 30 calendar days after the closing is 9 April; the report would have been due by 30 April. The second date decides only at the end of January. A closing on 31 January, in a year when February has 28 days, gives 28 February under the first test and 2 March under the second, so the report would have been due by 2 March.

Reports were filed electronically through FinCEN's BSA E-Filing System, by web form, PDF upload or XML batch file, and FinCEN charged nothing for filing. They were not public: FinCEN says the reports are exempt from disclosure under the Freedom of Information Act.

The record-keeping duty was short. The reporting person kept the transferee's beneficial ownership certification and any designation agreement for five years. FinCEN says no copy of the report itself had to be kept, and no copies of driving licences, passports or other identity documents.

The penalties FinCEN lists

FinCEN gives the penalty amounts as 2025 figures and ties them to sections 5321 and 5322 of title 31 of the United States Code and to 31 CFR 1010.821.

A negligent violation carried a civil penalty of up to US$1,430 per violation, with up to a further US$111,308 for a pattern of negligent activity. A wilful violation carried a civil penalty equal to the greater of two amounts: the amount involved in the transaction, capped at US$286,184, or US$71,545. Wilful violations could also be prosecuted, with up to five years' imprisonment, a fine of up to US$250,000, or both.

The wilful civil penalty is the one that needs arithmetic. The table applies FinCEN's formula to three invented amounts.

These amounts describe the rule as written. Under FinCEN's answer of 18 May 2026, none of them applies to a failure to file while the court order remains in force.

What the court order changes at the closing table

For a company or trust buying without a qualifying loan, the practical change is that the settlement agent has no federal Real Estate Report to complete, and so no reporting reason under this rule to collect a beneficial ownership certification. Whether a title company or lender still asks for ownership details for its own purposes is a matter for that firm, and is outside what FinCEN's pages cover.

For a seller, the rule as written meant appearing in a report as the transferor. That too is suspended while the order stands.

For settlement and title professionals, FinCEN's two answers frame the position. No report is required and there is no liability for not filing while the order is in force. If the appeal succeeds, reporting would resume from a date that FinCEN says it will announce, without a catch-up for transfers closed in the meantime. The cascade, the designation agreement and the certification are the parts of the rule a closing office would need again on that day.

For real estate agents, little changes, because the rule never made an agent acting only as an agent a reporting person.

One thing the order does not touch is the buyer's exposure to fraud. The rule was about transparency towards the government. Nothing in it protected the money a buyer sends to closing.

How closing wire fraud works

The CFPB described the scheme in a consumer article published on 3 June 2019, which the agency now marks as archived. It is a phishing scheme. Criminals get into the email account of a real estate professional, read the correspondence, and learn which clients are about to close and when. Then, shortly before closing, the buyer receives a spoofed email that appears to come from the real estate agent or the settlement agent. It carries wiring instructions, often presented as a last-minute change, and the account it names belongs to the criminals.

The fraud works because every detail in the message is true except one. The property, the names, the closing date and the amount are all correct, because they were read from real emails. Only the account number is false.

The CFPB's article gave two measures of scale, both attributed to the FBI and both now several years old: reports of such attempts rose 1,100 per cent between 2015 and 2017, and the losses for 2017 were estimated at nearly US$1 billion. More recent national figures were not verified on a primary page for this guide and are not given here.

ALTA, the trade body of the title industry, treats wire fraud as one of the most significant threats to real estate transactions and keeps a topic page on it, with entries dated as late as 15 September 2026. Its material makes the point that the target is not only the buyer's down payment: sale proceeds on their way to a seller can be diverted in the same manner.

Guarding the wire: what the CFPB advises

The CFPB's advice rests on one idea: the instructions for the wire are settled in advance, through a channel that is not email, so that a later email cannot change them.

The first stage is the one buyers tend to skip, because it happens weeks before any money moves. The CFPB suggests talking the closing and the transfer through with the two trusted people in person or by phone, writing down their names and numbers, and considering a code phrase known only to those involved. It also suggests keeping the details of the closing out of email as far as possible, since that correspondence is what the criminals read.

The second stage is where the decision is made. The agency's instruction is blunt: "Never follow instructions contained in an email." Verification means using the phone number written down at the first stage, not a number printed in the message that has just arrived. The CFPB adds that links and attachments in such a message should wait until the trusted people have confirmed it, that financial information should not be sent by email, and that a phone call asking a buyer to verify personal or financial details deserves the same check.

The third stage depends on speed. According to the CFPB, a victim should ask the bank or the wire-transfer company for a wire recall immediately, because prompt reporting improves the chance of getting money back, and should file a complaint with the FBI's Internet Crime Complaint Center. The agency does not promise recovery, and how a bank responds depends on the case.

What settlement offices do on their side

The buyer's phone call is one half of the defence. The other half sits inside the title or escrow office, and ALTA publishes two documents for it, both prepared by its Information Security Committee.

The first is the Outgoing Wire Preparation Checklist, a template for offices that send money out, for example sale proceeds to a seller. ALTA describes three parts: verifying the source of the wiring instructions, verifying instructions that arrived by email or from someone other than the payee, and verifying that the funds were delivered. It mirrors what the CFPB asks of buyers.

The second is the Rapid Response Plan for Wire Fraud Incidents, a worksheet an office completes in advance so that the first steps after a misdirected wire are already decided. ALTA's topic page lists it without setting out its steps, so they are not described here.

ALTA also publishes consumer material that settlement offices can hand to clients, including a card on closing scams available in several languages and a flyer on seller impersonation, a related fraud in which someone poses as the owner of a property in order to sell it.

For a buyer, the practical reading is that a settlement office which explains at the outset how it will send and confirm wiring instructions is following the pattern its own trade body sets out. The federal reporting rule may return or may not, depending on an appeal whose outcome is not known. The exposure of the closing wire does not depend on that outcome.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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