FinCEN Reporting Requirements (cash or private-loan) purchases

Regarding: Federal Reporting Requirements for Residential Real Estate Transfers

Effective Date: March 1, 2026

As your Real Estate Broker, I want to ensure a seamless closing process for your upcoming transaction. Please be advised that under the U.S. Department of the Treasury’s FinCEN Residential Real Estate Rule, certain "non-financed" (cash or private-loan) purchases involving entities or trusts are now subject to federal reporting.


Why is this happening?

The Financial Crimes Enforcement Network (FinCEN) requires transparency for residential transactions that do not involve a traditional bank mortgage. This rule is designed to prevent the use of "shell companies" in real estate for illicit financial activity.
 

Does this apply to your transaction?

A Real Estate Report must be filed if your purchase meets the following:
 

1. Property Type: 1–4 family home, condo, co-op, or residential vacant land.

2. Buyer Type: A legal entity (LLC, Corp, Partnership) or a Trust.

3. Financing: "All-cash" or financing from a source other than a regulated bank (e.g., seller financing or private "hard money").

 

What information will be collected?

If the rule applies, the closing/settlement agent is legally required to collect and verify the following for all Beneficial Owners (any individual owning 25%+ or exercising "substantial control"):

• Full Legal Name and Date of Birth. 

• Current Residential Street Address.

• Taxpayer Identification Number (SSN or EIN).

• A copy of a government-issued photo ID (Passport or Driver’s License).

• Details on the source and method of funds used for the purchase.

 

Privacy & Compliance

This information is submitted to a secure, non-public federal database. It is not a matter of public record like a deed. Please be prepared to provide these documents to the title company or closing attorney at least 10 days prior to closing to avoid delays.

Please let me know if you may have any further questions.