Len Prescott, director of underwriting for First American Title Insurance Company’s Agency Division, said title insurance professionals play a central role in these transactions, demonstrating their expertise to creatively, yet appropriately manage risk in support transactions that shape entire communities.
“It’s complex—but it’s also incredibly rewarding,” Prescott said. “Our role brings clarity to complexity. That’s what great underwriters—and great title insurance professionals—do every day.”
Here’s a breakdown of five critical topics and how they’re influencing underwriting decisions, closing procedures and risk management across the title country.
1. Foreign Ownership Restrictions and CFIUS Compliance
Foreign ownership of U.S. real estate has drawn growing scrutiny, particularly when national security concerns intersect with investment activity. In the past two years, both federal and state governments have expanded their authority to regulate land purchases by foreign nationals and entities.
The Committee on Foreign Investment in the United States (CFIUS)—a multiagency task force that reviews foreign investments for national security risks— has broadened its geographic focus to include any transaction within 100 miles of designated military installations. And that’s not just residential. Commercial properties are affected too.
“We’re seeing more lenders include CFIUS clearance requirements in their closing instructions,” said Nancy Landmark NTP, deputy chief underwriting counsel of commercial services for Stewart Title Guaranty Co. “That’s something we didn’t see even a year ago.”
Additionally, state legislatures have introduced a surge of bills restricting foreign ownership of agricultural, commercial and residential land— particularly by individuals from countries considered adversarial. More than 150 bills were tracked across states in 2024, and several are now law. Approximately 26 states have specific laws limiting foreign ownership of agricultural land, while some states restrict foreign ownership of public lands as well, according to the National Agricultural Law Center. State laws also have restrictions based on the type or classification of real estate and restrictions based on nationality or origin of the buyer.
Prescott emphasized title insurance professionals can’t afford to assume these laws don’t apply to commercial deals.
“This is not just about adding an exception. This affects underwriting decisions, policy liability and even whether a deal can close,” he said.
When you think in terms of commercial real estate, Prescott said there are lots of “gotchas.”
“Maybe it’s an agricultural property that’s part of the restriction, but agricultural property is not defined. So, residents with a chicken coop or a garden in the backyard, the question arises whether this is part of the agricultural property. And, if this is vacant land with the intent to build a residence or a one-to-four family apartment. Is that commercial or residential? These state laws often don’t line up.”
If a title agent closes a transaction that is restricted, Landmark said if there’s nothing in the closing instructions imposing liability, the transaction likely won’t be void. Rather, CFIUS will review and the buyer may be required to divest.
“You can close with relatively small risk,” Landmark added. “Nonetheless, underwriters will want to be careful with these transactions to be clear we are not providing coverage. We probably are not under the terms of Exclusion 1, but it’s better to be safe than sorry. It’s best to contact your underwriter and include an exception if needed.”
If there is something in the closing instructions, remember that closing liability is on closing office, not the underwriter,” Landmark added.
- The key takeaway: Know your property’s location, buyer’s status and the surrounding jurisdiction’s restrictions— then ask the right questions early.
2. Layered Capital Stacks and Alternative Lending Models
The CRE capital landscape is undergoing a structural shift. Traditional bank financing remains harder to access in 2025, pushing investors toward mezzanine debt, preferred equity and complex public-private partnerships to finance large developments.
“Every time you add a layer to the capital stack, you’re adding complexity— and risk,” Prescott said. “For us as title insurance professionals, that means more parties to the transaction, more policies and more scrutiny.”
Landmark gave a detailed example from a recent deal that included 12 separate title policies: fee ownership, long-term ground leases, multiple lenders and layered equity partners—all with different coverage needs.
“It’s the kind of transaction that requires coordination across multiple offices and teams. It’s intense—but also rewarding when you pull it off,” she said.
For projects using New Market Tax Credits (NMTC) or Low-Income Housing Tax Credits (LIHTC), underwriters must often evaluate overlapping entities and assess complicated ownership structures.
Title companies are increasingly called upon to educate clients—especially first-time commercial developers—about how title insurance fits into these layered deals. That includes flagging risk exposures in mezzanine financing, explaining what title coverage does (and doesn’t) include and coordinating with lenders’ legal teams.