HR7186-119

What This Bill Does

The American Family Housing Act amends the Investment Company Act of 1940 to restrict large institutional ownership of single-family homes. Starting 100 days after enactment, a large-scale company may not purchase any single-family residence, including from the federal government. It also may not purchase equity securities of a qualified issuer if the transaction would result in the large-scale company holding more than 49 percent of that issuer. A large-scale company means a registered investment company or private fund with more than $100 billion in assets under management. A qualified issuer is an issuer that holds more than 100 single-family residences. Single-family residence means a one-dwelling-unit home built for one household that functions as independent living space without shared walls or utilities, excluding condominium and cooperative units.

Who Benefits and How

First-time homebuyers, owner-occupant buyers, families seeking single-family homes, local housing markets, and smaller landlords may benefit because the bill limits very large funds from buying single-family houses directly or gaining majority control of companies holding more than 100 such homes. Communities concerned about institutional ownership benefit from a bright-line $100 billion asset threshold and a 49 percent cap on large-fund equity stakes in qualified issuers.

Who Bears the Burden and How

Registered investment companies above the $100 billion threshold, private funds above the threshold, institutional single-family rental investors, and qualified issuers holding more than 100 single-family residences face new acquisition limits. The SEC must interpret and enforce the Investment Company Act amendment. Federal agencies selling single-family residences may lose large-scale fund buyers. Investors may need to monitor asset-management thresholds, home-purchase activity, and equity ownership percentages after the 100-day effective date.

Key Provisions

• Bars large-scale investment companies from purchasing single-family residences beginning 100 days after enactment.
• Applies the purchase ban to single-family homes bought from the federal government.
• Bars large-scale companies from buying qualified-issuer equity when the purchase would push ownership above 49 percent.
• Defines large-scale company as a registered investment company or private fund with more than $100 billion in assets under management.
• Defines qualified issuer as an issuer holding more than 100 single-family residences.
• Defines single-family residence as a one-unit independent home and excludes condominium or cooperative units.