Trump Signs Executive Order Targeting Institutional Investors

Following a Jan. 7 promise that he “was taking steps” to ban institutional investors from buying single-family homes in the U.S., President Donald Trump on Tuesday signed an executive order to shut down federal financing and approval channels that facilitate those purchases.

The order, titled Stopping Wall Street From Competing With Main Street Homebuyers, does not ban institutional home-buying outright, nor does it require large landlords to sell existing portfolios. Instead, it directs federal agencies to withdraw federally backed financing, guarantees, insurance, securitization and asset-disposition pathways when large institutional investors seek to acquire single-family homes that could otherwise be purchased by owner-occupants.

An unanswered question now hangs over the next 30 days: how the administration defines “large institutional investor” and “single-family home.” Treasury Secretary Scott Bessent has been tasked with delivering those definitions by mid-February, setting the stage for how far the order reaches — and who ultimately feels its effects.

What the executive order actually does — and does not do

Trump’s executive order – part of a slate of policy directives and recommendations he says he plans to address in a speech today at the World Economic Forum in Davos, Switzerland – focuses on federal leverage points rather than private-market transactions. It instructs the Departments of Treasury, Housing and Urban Development, Agriculture, Veterans Affairs, the General Services Administration and the Federal Housing Finance Agency to prevent federal agencies and government-sponsored enterprises from supporting acquisitions of single-family homes by large institutional investors.

That includes barring agencies from approving, insuring, guaranteeing, securitizing or otherwise facilitating such purchases “to the maximum extent permitted by law.”

It also directs agencies to promote sales to individual owner-occupants through first-look policies, disclosure requirements, and anti-circumvention measures.

Notably, the order includes a narrow but explicit carve-out for build-to-rent communities that are planned, permitted, financed and constructed as rental developments. That language provides clarity for purpose-built BTR developers, while appearing to exclude bulk purchases of homes within for-sale subdivisions — a strategy long used by both homebuilders and single-family rental operators.

The order also calls on the Justice Department and the Federal Trade Commission to review large or serial acquisitions by institutional investors for potential antitrust violations, particularly related to coordinated vacancy or pricing behavior in local rental markets. HUD, meanwhile, is directed to expand ownership disclosure requirements for single-family rentals participating in federal housing assistance programs.

What the order does not do is prohibit institutions from buying homes outright, nor does it force divestment of existing portfolios. As rental economist Jay Parsons noted in a widely shared analysis, many institutional buyers already rely on private debt, private equity, or balance-sheet financing rather than federal channels, limiting the immediate mechanical impact of the order.

The definition question that matters most

The order’s real market-making or breaking crux is on how the administration defines “large institutional investor.”

Typically, institutional SFR owners are categorized as operators with 1,000 or more homes. But Secretary Bessent has publicly suggested much lower thresholds, raising the possibility that owners with dozens, not thousands, of homes could fall under the new restrictions.

If the definition is set aggressively low, the impact would shift away from Wall Street-backed platforms and toward small and mid-sized regional operators who account for a meaningful share of investor purchases. Data from John Burns Research & Consulting shows those groups typically represent 4% to 6% of home sales, compared with roughly 0.5% attributed to the largest institutional players in recent periods.

By contrast, “mom-and-pop” investors — typically defined as owners with fewer than 10 homes — remain the largest investor cohort, comprising roughly 12% to 15% of home purchases in recent years. Whether and how the administration excludes that group will shape the political and economic fallout.

The order also leaves ambiguity around acquisitions of existing SFR portfolios. While it emphasizes homes that “could otherwise be purchased by families,” it does not outline a clear path for regulating portfolio transactions — many of which involve already-occupied rental homes and private capital structures that do not rely on federal support.

“We’re proud to provide quality housing and outstanding service to families who rent, including military families, veterans, nurses, teachers, firefighters, law enforcement, and other hard-working Americans all across the country,” the National Rental Home Council said in a provided statement. “For many families, single-family rentals provide stability and space for family formation and a launchpad to homeownership. In recent weeks, independent experts and news outlets have made one thing clear: professional single-family rental providers own far less than 1% of homes and are not the cause of America’s housing shortage.”

The NRHC contends that institutional rental operators provide professionally managed housing at scale and warned that limiting capital access could reduce supply and push rents higher over time, particularly for households unable or unwilling to buy.

For homebuilders, the order introduces new uncertainty around bulk sales that have helped stabilize production during periods of volatile buyer demand. For renters, especially in markets far from BTR communities, reduced acquisition activity could ultimately tighten supply.

The Wall Street Journal reports that, following President Trump’s Jan. 7 statement that he would call on Congress to codify the ban, U.S. Sen. Bernie Moreno, a Republican from Ohio, has said that he would introduce legislation to implement Trump’s ban on large investors. Moreno told the WSJ: “We are in the discovery phase. I would never want to go ahead of the president.”