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SF4102 (Legislative Session 94 (2025-2026))

Private equity company ownership of single-family homes prohibition

AI Generated Summary

Purpose and Scope

  • The bill creates a new rule in Minnesota law to prohibit private equity companies from owning single-family homes (defined as 1-4 unit residences) in the state.
  • It assigns enforcement to the attorney general under existing enforcement provisions (Minnesota Statutes section 8.31).
  • The overall aim is to restrict ownership by investors who pool capital to buy and manage homes, keeping certain properties out of private equity control.

Key Definitions

  • Private equity company: an investor or group that raises/returns capital and invests, develops, or disposes of assets. Includes publicly or nonpublicly traded entities, real estate investment trusts (REITs), and any investment firm that buys and manages private companies for profit.
  • Homestead: a property classified as class 1a for tax purposes (per Minnesota tax definitions).
  • Single-family home: a residential property with 1 to 4 dwelling units.
  • Real estate investment trust (REIT): defined as in federal law.
  • Notable exclusions from “private equity company” status:
    • Local, state, or federal government units or agencies
    • Land trusts (as defined elsewhere in state law)
    • Nonprofits under Chapter 317A that create rehabilitate or provide affordable housing to low- and moderate-income renters or buyers
    • Corporations primarily engaged in housing development for single-family homes
    • Mortgage note holders who own homes through foreclosure

Prohibition on Ownership

  • Subd.2 prohibits a private equity company from having a direct or indirect ownership interest in a single-family home.
  • An exception allows a natural person to own a home classified as homestead for tax purposes (i.e., individuals, not entities, may own homestead properties for tax reasons).

Enforcement

  • The attorney general may enforce this prohibition under the procedures and authority in section 8.31 of the Minnesota Statutes.

How This Changes Minnesota Law

  • Establishes a new statutory prohibition targeting private equity investors in the ownership of single-family homes.
  • Defines who counts as a private equity company and specifies several exemptions.
  • Enables state-level enforcement by the attorney general, linking to existing enforcement mechanisms.
  • Clarifies that only private equity companies are restricted; individual owners of homestead property are not prohibited by this section.

Practical Considerations

  • The bill narrows ownership by non-governmental investment entities in single-family homes, potentially affecting real estate markets, financing, and housing availability for buyers who would otherwise purchase homes from private equity portfolios.
  • Some entities frequently involved in affordable housing development or foreclosure scenarios are exempt.

Relevant Terms - private equity company - single-family home - ownership (direct or indirect) - homestead - class 1a - Minnesota Statutes chapter 500 - attorney general - enforcement (section 8.31) - real estate investment trust (REIT) - mortgage note holder - foreclosure - land trust - nonprofit housing provider - affordable housing - housing development

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 04, 2026SenateActionIntroduction and first reading
March 04, 2026SenateActionReferred toJudiciary and Public Safety
March 12, 2026SenateActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to Minnesota Statutes section 462A.31 (land trusts) used in defining land trusts within the bill.",
      "modified": []
    },
    "citation": "462A.31",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to Minnesota Statutes section 273.13, subdivision 2 (homestead classification) used to relate homestead property to tax purposes in the bill.",
      "modified": []
    },
    "citation": "273.13",
    "subdivision": "2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to Minnesota Statutes section 8.31 (attorney general enforcement provisions) for enforcement of the section.",
      "modified": []
    },
    "citation": "8.31",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to federal law defining real estate investment trusts (26 U.S.C. § 856) used to interpret 'real estate investment trust' in the bill.",
      "modified": []
    },
    "citation": "26 U.S.C. § 856",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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