Buying residential real estate in an Entity or a Trust with cash / seller financing / private or even hard money?
Starting March 1, this could trigger a new FinCEN Real Estate Report aimed at anti‑money‑laundering. This is not public record and it does not mean you are in trouble, BUT there are a very strict no exception and no dollar threshold rules in place
There are a couple of things that have to happen all at the same time for this to be triggered. The reporting applies when the property is residential (1–4 units, condos/co‑ops, or even land you plan to build on), the buyer takes title in an entity or trust, and the deal is ‘non‑financed.
As of now, they are qualifying Non‑financed purchases as NOT securing a mortgage from a bank/mortgage company that’s required to run AML and file suspicious activity reports. So cash, seller financing, or some private/hard‑money loans technically fall under non-financed.
If you do NOT have that kind of mortgage (so cash, seller financing, or certain private/hard-money situations), then the transfer is non‑financed → gift funds don’t “save” you from reporting. They can simply be part of the money.
“Can include gift funds” is not a separate trigger you must have. It’s saying, even if some of the money comes from a gift, the deal can still be considered non‑financed (i.e., not a traditional bank mortgage deal) and therefore still potentially reportable if the other conditions are met.
If it’s reportable, your title/closing team will collect entity details/documents plus the real people behind it, if they own 25% or more of the entity or trust. They will require ID AND payment‑source information. This does NOT mean you’re suspected of wrongdoing. But It DOES mean: bring your docs early so closing isn’t delayed.