HR7138-119

What This Bill Does

The Stop Wall Street Landlords Act of 2026 targets investors with more than $100 million in net assets, aggregating controlled groups at a more-than-50-percent threshold. For those specified large investors, new section 280I denies deductions for mortgage interest, insurance, and depreciation related to U.S. single-family homes with one to four dwelling units. It excludes government entities, 501(c)(3) organizations, federally assisted buildings, Low-Income Housing Tax Credit buildings, qualified bond-financed buildings, principal residences of individual investors, and homes originally constructed or substantially rehabilitated by the taxpayer. The deduction denial applies 18 months after enactment. The bill also imposes an excise tax equal to the entire sale price when a specified large investor sells or transfers a single-family home after the same 18-month period, with similar controlled-group and exception rules. Amounts collected under that tax go to the Housing Trust Fund, subject to appropriations, to increase and preserve rental housing affordable to extremely low- and very low-income families, including homeless families. The bill directs FHFA to bar Fannie Mae and Freddie Mac from newly purchasing, lending on, or securitizing mortgages where the mortgagee is a specified large investor and bars Ginnie Mae from guaranteeing securities backed by those mortgages.

Who Benefits and How

First-time homebuyers, renters seeking affordable housing, community housing advocates, Housing Trust Fund beneficiaries, extremely low-income families, very low-income families, homeless families, and smaller landlords benefit if large investors face weaker tax advantages and reduced federal mortgage support for single-family acquisitions. The Housing Trust Fund benefits from transfer-tax proceeds.

Who Bears the Burden and How

Large institutional single-family-home investors, controlled real estate groups, mortgage lenders serving those investors, Fannie Mae, Freddie Mac, Ginnie Mae, FHFA, IRS examiners, tax planners, securitization desks, and investors in mortgage-backed securities must comply with deduction denial, transfer-tax, reporting, mortgage-purchase, securitization, and guarantee restrictions. Large investors selling covered homes face a tax equal to the sale price.

Key Provisions

• Blocks mortgage interest, insurance, and depreciation deductions for single-family homes held by specified large investors.
• Provides a specified large investor test based on more than $100 million in net assets with controlled-group aggregation.
• Provides exceptions for government entities, 501(c)(3) organizations, federally assisted buildings, principal residences, and taxpayer-built or substantially rehabilitated homes.
• Requires an excise tax equal to the sale price on covered single-family home transfers by specified large investors.
• Provides transfer-tax proceeds to the Housing Trust Fund for extremely low-income, very low-income, and homeless-family rental housing.
• Blocks Fannie Mae, Freddie Mac, and Ginnie Mae support for mortgages held by specified large investors.