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FinCEN Residential Real Estate Rule Expands Geographic Targeting Orders
Many Advocus agents are familiar with the Geographic Targeting Orders (GTOs) that were first issued in 2016. They ultimately covered 60+ counties in the United States and focused on cash residential transactions to legal entities for $300,000 or more. The GTOs were issued by the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury and served as a testing ground for the Residential Real Estate Rule (RRE Rule) that becomes effective December 1, 2025.
What's New: RRE Rule Expands GTOs on Cash or Privately Financed Transactions
Advocus and some of our agents are familiar with the GTOs because one of the counties covered was Cook County, Illinois. The RRE Rule greatly expands the GTOs in two ways:
- Eliminates geographic and dollar amount criteria; and
- Adds trusts to the reporting requirements.
How to Comply with the New RRE Rule
For details on how to comply with the FinCEN Final RRE Rule on certain cash deals or deals without traditional lenders, please view the content on our FinCEN webpage, specifically the Overview: FinCEN Final Residential Real Estate Rule. For example:
- Buyers and Sellers must gather required information before closing (see details in RRE Overview).
- There is a reporting cascade of parties who are responsible for reporting, but the main parties in most transactions will be the settlement agent or the party that prepared the closing or settlement statement.
After December 1, 2025, when the RRE Rule takes effect, all lawyers, real estate agents, and parties to transactions need to be aware of the rule, which carries civil and criminal penalties for non-compliance.
New Exception Language on Title Commitments Issued on/after October 1, 2025
Starting October 1, 2025, the following exception must appear on Schedule B:
“In the event that the contemplated transaction is a transaction for which a Real Estate Report is required to be submitted to the US Department of Treasury Financial Crimes Enforcement Network (“FinCEN Report”), then the parties to transaction (Seller(s) and Buyer(s)) shall, no later than the closing, provide to the Company the information and documentation necessary to enable the Company to complete the FinCEN Report. Such information and documentation includes full legal name, date of birth, residential street address, and the IRS taxpayer identification number of the beneficial owners of the Buyer(s), as further defined and described in Section 1010.821 of Chapter 31 of the Code of Federal Regulations (“Code”).
"NOTE: The FinCEN Report requires that certain residential real estate transactions purchased with all cash or without institutional lender financing, where at least one buyer/transferee is a legal entity, limited liability company, corporation, partnership, trust, trustee or other non-natural person, must be reported to the United States Treasury Department’s Financial Crimes Enforcement Network. If the required information is not timely provided to the Company, the Company may elect to withdraw as the settlement company or otherwise be involved in the transaction.“
Please make sure your commitments issued on or after October 1, 2025, include the above exception.
How Advocus Will Help
Check our FinCEN Webpage As always, you can count on us to help. Our FinCEN webpage contains the following resources:
- Overview: FinCEN Final Residential Real Estate Rule.
- FinCEN RRE Rule Fact Sheet, ALTA's Buyer and Seller Collection Forms.
- Access to free webinars (when available) for anyone who may need to report.
- Ongoing information as it becomes available.
The Department of Treasury has been sued by multiple parties to try to delay the implementation of the rule, but parties need to be ready to comply if there is no delay.
Questions? Contact us or reply to this email. We welcome your questions and value your feedback. As always, we appreciate your business and ongoing support.
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