The HOPE (Humans over Private Equity) for Homeownership Act: Explained

Overview: HOPE (Humans over Private Equity) for Homeownership Act

The HOPE (Humans over Private Equity) for Homeownership Act proposes new taxes and long-term limits on how many one-to-four unit homes certain large investment buyers can purchase and keep.

For home buyers, the goal is to make it less attractive for large funds to compete for the same homes buyers often shop for, such as single-family houses and small multifamily properties with up to four units.

The HOPE (Humans over Private Equity) for Homeownership Act is introduced in both chambers as S. 788 and H.R. 1745.

Note that bills often change on their way to becoming law, so this page will update as new details emerge. For real-time updates, subscribe to our newsletter.

What Is the HOPE (Humans over Private Equity) for Homeownership Act?

The HOPE (Humans over Private Equity) for Homeownership Act sets up a set of federal taxes and phase-down rules for covered investment buyers that acquire and hold single-family homes, defined here as one-to-four unit properties.

It focuses on two buckets of owners:

• Hedge funds with at least $50 million in assets
• Other covered entities that acquire and hold single-family homes at scale

The bill uses taxes, shrinking holding limits, and reduced tax benefits to encourage covered entities to reduce their inventories of one-to-four unit homes over time.

Who Is Covered By the HOPE (Humans over Private Equity) for Homeownership Act?

The HOPE (Humans over Private Equity) for Homeownership Act applies to specific types of investment owners, including hedge funds with at least $50 million in assets, plus other covered entities described in the bill.

The rules in the bill are written for business buyers, not for home buyers purchasing a primary residence. The definition of single-family homes in the bill includes one-to-four unit properties.

How The HOPE (Humans over Private Equity) for Homeownership Act Works

The HOPE (Humans over Private Equity) for Homeownership Act has three main parts: a purchase tax for certain hedge funds, an annual tax when too many homes are held, and limits on certain tax deductions when the taxes apply.

Purchase Tax On Covered Hedge Funds

Hedge funds with at least $50 million in assets would face a tax when buying a single-family home.

The tax amount is based on the home’s price, with a minimum-style floor:

• Fifteen percent of the home’s purchase price, or $10,000

This purchase tax is aimed at increasing the cost of large-scale acquisition of one-to-four unit homes by covered hedge funds.

Annual Tax For Holding Too Many Homes

The bill adds an annual tax when a covered hedge fund keeps more homes than allowed under the bill’s phase-down rules.

When the annual tax applies, it is:

• $5,000 per home, per year, for each home above the allowed limit

This annual amount is designed to encourage covered hedge funds to reduce holdings over time.

Holding Limits That Shrink Over Time

The HOPE (Humans over Private Equity) for Homeownership Act sets a schedule that reduces how many single-family homes can be held by covered entities.

For hedge funds, the allowed holdings shrink each year:

• Year one: ninety percent of allowed holdings
• Gradually declines each year
• Year ten: zero percent allowed

For other covered entities, the bill sets a different structure:

• Fifty single-family homes may be kept long-term
• Homes above fifty must shrink over time from ninety percent down to ten percent over nine years

These phase-down schedules are meant to move more one-to-four unit homes back into the for-sale market over time.

Sales That Still Count As “Kept” For the Year

The bill includes a rule that limits how quickly a covered entity can reduce its counted holdings for a given year.

Homes sold in either of these ways still count as kept for that year:

• Sold to a business
• Sold to a buyer who already owns another home

This rule is intended to encourage sales that increase owner-occupancy, rather than shifting homes between large owners.

Limits On Mortgage Interest And Depreciation Deductions

When an entity is liable for the bill’s taxes on a single-family home, the HOPE (Humans over Private Equity) for Homeownership Act would limit certain tax deductions tied to that home.

Specifically, when the taxes apply:

• No mortgage interest deduction for those single-family homes
• No depreciation deduction for those single-family homes

These deduction limits add to the overall cost of holding one-to-four unit homes when the bill’s taxes apply.

When The Changes Would Start

The HOPE (Humans over Private Equity) for Homeownership Act would apply to taxable years beginning after the bill is enacted.

That start date ties the new rules to the tax year, rather than applying them retroactively.

Who Sponsors the HOPE (Humans over Private Equity) for Homeownership Act?

S. 788 and H.R. 1745 are companion bills introduced in the Senate and the House. Sponsorship and cosponsorship can change as the HOPE (Humans over Private Equity) for Homeownership Act moves through Congress. For the latest legislative updates and cosponsors, see the Bill Tracker above.