Trump Signs Executive Order on Institutional Investor Ban: What It Does and Doesn’t Do

President Donald Trump signed the executive order Tuesday night, moving forward his efforts to prevent large single-family investors from buying up single-family homes.

The effort is one of several aimed at slowing the rise in home costs in the past few years, following efforts to direct Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities. Trump has also signaled a rule is coming to let people pull from their 401(k) retirement plans to buy a home.

At a speech in Davos, Switzerland, Trump said the goal was to make homes affordable without allowing the value of existing home stock to fall.

The order directs Assistant to the President for Economic Policy Kevin Hassett, in conjunction with Secretary of the Treasury Scott Bessent, to develop policies over the next 30 days with more specifics, including how it will define both "large institutional investors" and "single family homes".

"Trump’s executive order lays out the framework for how an institutional investor ban would operate, but key questions remain. Most importantly, the order does not define what qualifies as an 'institutional investor', or exactly how the policy would be enforced," says Realtor.com senior economist Jake Krimmel.

What it does

Large institutional acquisitions of single-family homes in single-family housing markets will now be subject to review by the the attorney general and the chairman of the Federal Trade Commission.

Those agencies will also "prioritize enforcement of the antitrust laws, as appropriate, against coordinated vacancy and pricing strategies by large institutional investors in local single-family home rental markets."

The order requires an analysis within the government of what policies might promote large investor acquisitions, led by Treasury, which must identify rules and guidance that might "relate to large institutional investors acquiring or holding single-family homes and consider revising them."

The order further directs the heads of several other government agencies, including the secretaries of Agriculture, Housing and Urban Development, Veterans Affairs, and the head of the General Services Administration to develop policies that prevent government-sponsored agencies from helping with sale or disposal of homes to large investors.

Large investors who participate in housing assistance programs must disclose information to HUD related to ownership changes.

What it doesn't do

The new order doesn't directly ban institutional investors from buying homes. It limits conventional mortgage guarantees for such transactions. Furthermore, it carries "narrowly tailored exceptions" for build-for-rent properties that are "planned, permitted, financed, and constructed as rental communities," leaving open room for other kinds of exceptions.

As it stands, the policy doesn't have a geographic focus, nor does it detail the extent of control one entity can exert in properties, such as partial ownership.

That's important because many for-profit entities don't need to report information on their beneficial ownership structures to the government. A controversial rule called the Corporate Transparency Act was aimed at doing so, but has since been adjusted amid many legal challenges.

And, the order would not affect cash buyers or investors who use financing that is not guaranteed by Fannie Mae and Freddie Mac.

"Even under perfect enforcement, the policy would add little inventory overall. Because it only curbs future institutional demand, any effect would show up as homes sitting on the market slightly longer, rather than a surge of new supply," says Krimmel.

"At best, this would amount to an inventory trickle; and likely only in select Sun Belt metros where inventory has already risen sharply due to market forces. In the supply-constrained Northeast, corporate investor activity is minimal, so the policy would have little to no impact on inventory.

"It’s also important to highlight a key positive: the carve-out for build-to-rent activity helps ensure the policy does not discourage new single-family construction. That’s critical, because new housing supply, whether it's built for rent or to be owned, is what meaningfully improves affordability over time."