Build‑to‑rent projects have received a special carve‑out in Donald Trump’s new executive order restricting large institutional investors from buying single‑family homes from individual homeowners. According to the White House, the exemption was granted because the projects do not compete with first‑time buyers and therefore fall outside the scope of the new restrictions.
Trump signed the order overnight, with officials arguing it will make housing more affordable by curbing Wall Street activity in the single‑family market. At the same time, the administration also revealed that the new measures are designed to prevent large investors from outbidding individual families for entry‑level homes.
“My Administration will take decisive action to stop Wall Street from treating America’s neighbourhoods like a trading floor and empower American families to own their homes,” the order reads. “Buying and owning a home has long been considered the pinnacle of the American dream and a way for families to invest and build lifetime wealth.”
Treasury Secretary Scott Bessent now has 30 days to define “large institutional investor” and “single‑family home,” which will determine the scope of the restrictions. The administration must also prepare legislative recommendations to codify the ban through Congress.
Wood Central understands that the carve‑out is significant, with the market for build-to-rent projects growing exponentially in the south. In recent times, the asset class has become a major growth area for mass timber and lightweight timber construction, with large-scale developers like Sumitomo turning to prefabricated systems to deliver new housing projects at speed.
“The order includes a narrow but explicit carve-out for build-to-rent communities that are planned, permitted, financed and constructed as rental developments,” Housing Wire reports. “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.”
Wood Central understands that regulators have also been pulled into the process, with the Justice Department and the Federal Trade Commission to examine whether large investors have reduced competition in local housing markets, whilst the Department of Housing and Urban Development will work to establish a registry of single‑family rental owners participating in federal housing programs.
According to the White House, the new order is part of a new push to tackle affordability, with Trump directing Fannie Mae and Freddie Mac to purchase US$200 billion in mortgage‑backed securities to help lower borrowing costs. Officials said additional housing measures will be outlined in the coming weeks.
As it stands, large institutional investors own just 2% to 3% of the U.S. housing market, the Wall Street Journal reports, a small but growing footprint that has expanded in the aftermath of the 2007–08 subprime crisis. Some developers, however, warn that the restrictions could have unintended consequences. “Their intention may be good, ultimately, any regulation on the single-family rental industry is only going to be deleterious to what he’s trying to do,” Florida build‑to‑rent developer Adam Wolfson told the Wall Street Journal.
Trump said the order is necessary to “preserve the supply of single‑family homes for American families,” before adding that “people live in homes, not corporations,” and warning that neighbourhoods once dominated by middle‑class families are increasingly being taken away by “faraway corporate interests.”
