FinCEN: How your cash transactions are about to change

What - or who - is FinCEN?

Great question - and great place to start! FinCEN is the abbreviation for the Financial Crimes Enforcement Network which is a division of the Department of the Treasury. They're in charge of combatting things like money laundering, fraud, terrorism financing, and other sorts of illegal financial activities.

So what are they changing?

They're enacting a new Anti-Money Laundering rule (AML). A similar rule has been in effect since 2016, but only in certain communities that were considered high risk (think Miami and Manhattan). But as of March 1, 2026, the AML rule goes into effect nationwide.

Here's a quick summary of the AML rule: All residential transfers of real property to a trust or entity that are non-financed must be reported.

Some key things to note here - the definitions of residential property and non-financed are...let's just say...pretty vague! So if you aren't 100% sure if the transaction you're dealing with triggers the FinCEN AML rule, reach out to our team to clarify!

We'll get into it shortly, but it's important to know that the reporting required by the new rule is extensive. And the penalties for not complying are severe. But first...

Why did FinCEN establish this new rule?

Cash purchases of real estate have created a prime opportunity for criminal organizations and fraudsters to launder money, and this new rule is a mechanism to help prevent that. The criminals are using illicitly acquired funds to purchase properties with all cash, and hiding their identities through LLCs, trusts, and corporations. This new data collection will help prevent this.

If you're looking for real-life examples of what the new rule is trying to prevent, here are a few quick stories:

• The former Mexican head of security used billions of dollars, stolen from Mexican taxpayers and bribes from the cartel, to purchase over 30 properties in Miami.

• The Malaysian Prime Minister's stepson embezzled millions from the Malaysian Development Fund and used it to purchase over $40 million worth of NYC apartments. Fun fact: He also used the stolen money to fund The Wolf of Wall Street!

• A Ukrainian oligarch went on a shopping spree with siphoned money from a bank he owned. He purchased 22 properties in the midwest, including factories, homes, a warehouse, and a prominent skyscraper. He skipped out on paying taxes and let the properties deteriorate, leading to poor working conditions and bankruptcies for the companies that rented them.

But does this matter in NH and Maine where we do business?

Sure does! While there have been a few instances of purchases in our area potentially being used for money laundering, one city's story stands out.

Nashua, NH has had two property purchases over the last ten years that concern residents and organizations in the area. Around seven years ago, a Chinese investor purchase the Daniel Webster College campus for around four times what it was worth. All these years later, the property sits empty. And just last year, another Chinese company purchased a 337,000 square foot building in Nashua for $67 million, despite it being assessed at only $15 million. So far, the property also sits abandoned. The proximity of both properties to the Nashua drinking water source, airport, and defense contractor BAE Systems had become so unnerving for locals that Nashua appealed to state lawmakers to fund a purchase of the campus by the city, but in January 2026, it was denied.

Is my transaction reportable?

This perhaps is the most important question of the blog! The transaction is reportable if all of the following are true:

• The property is residential (1-4 family homes, apartment buildings, condos, cooperatives, mixed use commercial and residential buildings)

• The transaction is non-financed. Typically this means it's a cash deal; however, when it comes to FinCen, this also includes transactions that are privately financed by a hard money lender, seller financing, etc. This doesn't apply to financed transactions by a traditional lender as they are already confirming the transactions aren't money laundering.

• The buyer is a legal entity or trust.

Are there exceptions?

Yes! Certain transactions are excluded. These are deals in which a court is involved - think death, divorce, bankruptcy, or foreclosure.

What needs to be reported?

Get ready for some data entry. Below is a list, although not exhaustive, of the items buying entities will need to provide prior to closing.

• Transaction Info

  • Address of property

  • Closing date

  • Sale price

  • Legal description

• Settlement Agent Info

  • Full legal name of settlement agent employee

  • Address

  • Phone number

  • Email

  • Relationship to settlement agent and transferee

• Exemptions

  • Any applicable exemptions

  • Reasoning behind exemptions

• Buying Entity Info

  • Full legal name

  • Trade name

  • Address

  • SSN/TIN

  • Individuals with beneficial ownership or control of entity

    • Full legal names

    • DOB

    • Address

    • Country of citizenship

    • SSNs

    • Relationship to entity

    • Identifications

  • If trust

    • Date of trust instrument

    • Type of trust

• Funds Info (Information for any accounts used to fund the purchase)

  • Originating financial institution name

  • Account Number

  • Name on account

  • Method of payment

  • Amount of payment

  • Confirmation of funds sent to settlement agent

• Signed Certification

If you thought it would be only buyer information that needs to be reported as a part of FinCEN, you'd be wrong! If your transaction is reportable, this is the information we need to collect and report on behalf of the seller:

• Full legal name or individual, entity, and/or trust

• Trade name if applicable

• SSN/TIN

• Date of birth

• Residential Address (no PO boxes)

• Identifications

• Signed certification

How does this change the transaction process?

We're so glad you asked! If you're the buyer agent for someone purchasing as an entity/trust with cash or private financing, you'll want to alert your buyer to the following:

• They'll be responsible for providing lots of personal information to the title company before the closing

• They'll be charged an additional fee for FinCen reporting as a part of their closing costs

• Seller may be wary of accepting a FinCen reportable offer as they will need to provide information for reporting too
  

If you're the listing agent for a seller considering accepting a FinCen reportable offer, you'll want to tell your seller the following:

• They'll be responsible for providing personal information to the title company prior to closing (much more limited than buyer)

• The transaction cannot close until their buyer also provides us all of their personal information

Finally, it's important to know that FinCEN is ready to hand out severe consequences (as in up to five years jail time and up to $250,000 in fines) for any settlements agents (that's us!) who don't comply with the rule. So we aren't about to take any chances!

When we determine that a transaction must be reported per the AML rule, we'll work with the real estate agents, buyer(s), and seller(s) to obtain all of the information required for reporting. This will happen well before the closing date because if we don't have the required information, we will not be meeting parties at the closing table!