HB6243: Property: land sales; prohibition of purchase of residential property by certain businesses;…

substitute for House BILL NO. 6243 A bill to amend 2026 PA 32, entitled "An act to prohibit certain companies from acquiring or purchasing certain residential property; to provide for the powers and duties of certain state officers and entities; and to prescribe certain penalties, civil sanctions, and remedies," by amending sections 3 and 7 (MCL 125.853 and 125.857). the peoplE of the state of michigan enact: Sec. 3. As used in this act: (a) "Excepted purchase" means a purchase of a single-family home that is any of the following: ( i ) Purchased under a build-to-rent program where the large institutional investor purchases , constructs, or constructs and retains newly constructed single-family homes to be managed as rental properties, whether as communities exclusively of renter-occupied single-family homes or as communities of single-family homes that are both owner- and renter-occupied. As used in this subparagraph, "communities of single-family homes" includes, but is not limited to, all of the following: (A) Communities composed of only single-family homes. (B) Communities composed of single-family homes and multi-family residential structures. (C) Communities composed of residential and commercial or other structures. ( ii ) Purchased pursuant to a renovate-to-rent program that meets both of the following requirements: (A) Substantially rehabilitates single-family homes that do not meet structural or core system elements of local building codes. (B) Makes improvements in an aggregate dollar amount of not less than 15% of the purchase price of the single-family home. ( iii ) Purchased pursuant to a homeownership program that meets all of the following requirements: (A) Requires rental payments and any other fees that are not greater than those collected by the large institutional investor on other similarly situated single-family homes not covered by the eligible homeownership program. (B) Is subject to a contract between the large institutional investor and renter that is considered a consumer credit transaction secured by a dwelling or real property. (C) Provides for positive reporting of rental payments to consumer reporting agencies for any renter who is informed of and opts into the reporting. (D) Requires contribution of meaningful financial support from the large institutional investor, including price concessions, for the purchase of the single-family home by the renter. ( iv ) Purchased pursuant to a program to boost homeownership that meets all of the following requirements: (A) Provides for positive reporting of rental payments to consumer reporting agencies for any renter who is informed of and opts into the reporting. (B) Provides for a right of first refusal and a 30-day first look period. (C) May provide meaningful financial support from the large institutional investor, including price concessions, to the renter for the purchase of a single-family home by the renter. The meaningful financial support may be for the purchase of the single-family home the renter occupies or another home. ( v ) Purchased or received by a mortgage servicer, lender, landlord, or other entity that has a legal right to the single-family home, not as a long-term investment strategy, but to mitigate loss or comply with servicing or investor obligations, to mitigate loss from unpaid rent or other obligations under a rental agreement, and only as a result of a foreclosure, a deed-in-lieu of foreclosure, a lien sale, an enforcement of a mortgage, deed of trust, or other security interest, an abandonment of a structure on a landlord's property, or an operation of law following a borrower default. A single-family home purchased or received under this subdivision must be disposed of within a commercially reasonable period after acquisition. ( vi ) Purchased from a large institutional investor if the selling large institutional investor owned the single-family home on or before July 21, 2026 or purchased the single-family home in compliance with this act. A large institutional investor that purchases a single-family home under this subdivision may demonstrate compliance with this subdivision by receiving a certificate from the seller of the single-family home that attests to all of the following: (A) The seller is a large institutional investor. (B) The seller owned the property as of July 21, 2026. (C) If the seller did not own the property as of July 21, 2026, the seller purchased the single-family home from a large institutional investor in compliance with this act. (b) "Large institutional investor" means an investment fund, corporation, general or limited partnership, limited liability company, joint venture, association, or other for-profit entity that meets all of the following requirements and is not a local, state, tribal, or federal government entity or instrumentality of a local, state, tribal, or federal government entity: ( i ) Is engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes. ( ii ) Beginning on the effective date of this act, July 21, 2026, alone or in concert with 1 or more other entities, directly or indirectly has investment control of more than 100 single-family homes in the aggregate in this state . , not including a Both of the following are excluded from the aggregation of single-family homes controlled under this subparagraph: (A) A single-family home purchased as an excepted purchase made after the effective date of this act. July 21, 2026. (B) A single-family home that qualified as an excepted purchase under subsection (a) that was purchased from a large institutional investor. ( iii ) Manages or has a net value of Has assets under management of $375,000,000.00 or more at any point during the taxable year the investor purchases or seeks to purchase a single-family home in this state. (c) "Purchase" means to purchase, transfer, or otherwise acquire a single-family home, including through merger, acquisition, construction, foreclosure, or bulk purchase, whether or not for cash consideration. (d) "Single-family home" means a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household. Single-family home does not include a mobile home or a manufactured home. As used in this subdivision : , "manufactured ( i ) "Manufactured home" means that term as defined in 42 USC 5402. ( ii ) "Mobile home" means that term as defined in section 2 of the mobile home commission act, 1987 PA 96, MCL 125.2302. Sec. 7. (1) Except as otherwise provided in this section, a large institutional investor shall not purchase or enter into a contract to directly or indirectly purchase a single-family home in this state. (2) The prohibition under subsection (1) does not apply to any of the following: (a) An excepted purchase. (b) The purchase of a single-family home in connection with a restructuring or other reorganization of ownership of single-family homes that were owned or purchased on or before the effective date of this act. July 21, 2026. (c) The purchase, ownership, development, rehabilitation, preservation, financing, or operation of a single-family home pursuant to a brownfield plan, work plan, or housing development activity approved by the Michigan state housing development authority under the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2670. As used in this subdivision, "brownfield plan", "housing development activity", and "work plan" mean those terms as defined in section 2 of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2652. (d) The purchase of a single-family home that is constructed, rehabilitated, or otherwise designed as a dwelling unit and meets both of the following qualifications: ( i ) Is approved by the Michigan state housing authority. ( ii ) Is rented by an income qualified household as that term is defined in section 2 of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2652. (e) The purchase of a single-family home that qualified as an excepted purchase under section 3(a)( i ) from a large institutional investor or was constructed as part of a build-to-rent program.