FINCEN Reporting Requirements Are Expanding: What New York Real Estate
Professionals Need to Know
The Financial Crimes Enforcement Network, known as FINCEN, is preparing to significantly expand its oversight of real estate transactions. These changes will directly impact New York real estate attorneys, brokers, lenders, title companies, and other industry professionals involved in closings.
Effective March 1, 2026, the FINCEN Residential Real Estate Rule will require professionals involved in real estate closings to file a “Real Estate Report” with FINCEN, designed to combat money laundering and increased transparency in the U.S. residential real estate sector.
For years, FINCEN’s presence in real estate has been targeted and limited. That framework is now changing. The new rules will broaden reporting obligations, reduce exemptions, and increase compliance expectations across the board. Understanding what is changing and preparing for how those changes will affect day-to-day transactions is critical for real estate professionals.
How FINCEN is changing
Under the old framework, FINCEN’s reach was limited. Primarily, only all cash real estate transactions in designated counties were monitored. Further, lower-value transactions were beyond FINCEN’s reach. In New York, this meant that only a certain amount of transactions fell under FINCEN’s reporting requirements. Many deals were beyond FINCEN’s jurisdiction, and as a result, FINCEN compliance was viewed as a specialized issue rather than a routine part of a real estate closing. However, this selective approach is coming to an end as FINCEN’s increased residential real estate reporting requirements are reshaping legal obligations across the real estate sector.
FINCEN has made clear that it believes the existing system leaves gaps that can be exploited. The upcoming changes are designed to create broader transparency across real estate transactions nationwide. One of the most significant changes is the removal of the minimum price requirement, meaning lower priced transactions will now be reportable. Prior to the newly established reporting requirement, FINCEN did not apply to real estate transactions below the $300,000 threshold. Not only is the minimum threshold now eliminated, even no consideration transfers may be reportable.
Moreover, FINCEN is moving away from county-specific targeting. Prior to the new enactment, FINCEN was focused on the five boroughs – Bronx, Brooklyn, Queens, Manhattan, and Staten Island. Going forward, reporting requirements will apply in all counties, meaning New York City, Long Island, Westchester, and upstate markets will be treated equally to the boroughs. Geographic exemptions will no longer apply. While cash transactions remain a priority, FINCEN is placing increased emphasis on identifying beneficial ownership, particularly in deals involving LLCs, trusts, and other complex ownership structures where the true controlling parties may not be immediately apparent. The goal is to promote greater transparency across residential real estate transactions, regardless of deal structure, and reduce opportunities for abuse. Stay tuned as Cornerstone continues to break down FINCEN’s evolving requirements and how they impact real world closings.
