Protecting American Homes from Hedge Funds Act
Sponsored By: Representative Smith, Adam [D-WA-9]
Introduced
Summary
Stops large investors—especially hedge funds—from building big portfolios of single‑family homes. The bill uses steep excise taxes, tighter tax rules, reporting penalties, and limits on federal mortgage support to push investors away from large-scale ownership of 1–4 unit residences.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 1 benefits, 3 costs, 0 mixed.
New buyer reporting and penalty rules
If enacted, buyers who are individuals would have to sign a certification when buying a single‑family home from a covered fund. The bill would require reporting of acquisition dates and whether the buyer already owns other single‑family homes. Failure to report or submitting false information could trigger a $50,000 penalty unless the person shows reasonable cause. The Treasury must publish the required tax form within 180 days after enactment.
Higher taxes for funds that buy homes
If enacted, the bill would charge big new taxes and limits on pooled funds that buy or hold single‑family homes. Covered fund managers would face a 50% excise tax on each newly acquired home in tax years after enactment. Funds that hold more homes than allowed would pay $50,000 for each excess home each year, after counting a base allowance (50 units for non‑hedge funds; zero for hedge funds) and a shrinking annual cap. The bill would also define which managers count as covered, treat majority-owned homes and some transfers as still owned for these tests, and stop liable owners from taking depreciation or new mortgage interest deductions for those homes.
Down-payment help for moderate-income buyers
If enacted, the bill would create a Housing Downpayment Trust Fund and fund HUD grants to State housing finance agencies. Those grants would pay for down‑payment help, closing cost assistance, and interest‑rate buydowns for households with income at or below 120% of area median income. State agencies must prioritize buyers of homes sold or transferred by covered pooled funds. Money comes from the new excise taxes and would be spent only if Congress provides the appropriations.
Limits on federal support for investor mortgages
If enacted, the bill would bar Fannie Mae and Freddie Mac from newly buying, lending on, or securitizing mortgages where the mortgagee is a specified large investor. It would also bar Ginnie Mae from newly guaranteeing or acquiring securities backed by such mortgages. These prohibitions would take effect on enactment and limit new federal secondary‑market support for mortgages tied to very large investor mortgagees.
Sponsors & CoSponsors
Sponsor
Smith, Adam [D-WA-9]
WA • D
Cosponsors
Rep. Khanna, Ro [D-CA-17]
CA • D
Sponsored 7/13/2026
Rep. Williams, Nikema [D-GA-5]
GA • D
Sponsored 7/13/2026
Rep. Sánchez, Linda T. [D-CA-38]
CA • D
Sponsored 7/13/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov