Honolulu home sales are about to become more transparent, thanks to a new federal rule that will require title insurance companies to reveal who is behind a shell company paying cash for a residential property.

For years, limited liability corporations, or LLCs, have been used to mask the individuals buying a home in the United States.

But that will change with a new order released last week from the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, which has been concerned that criminal enterprises are masking their illegal funds through cash sales of American homes.

The agency issued a targeting order this month requiring title insurance companies to collect information listing the individual “primarily responsible” for the LLC.

Cory Lum/Civil Beat

The order covers all Honolulu cash sales involving LLCs buying homes worth $300,000 or more. The order also covers home sales in Seattle, Los Angeles, San Francisco, San Diego, New York, Dallas, San Antonio, Fort Worth, Miami, Chicago, Las Vegas and Boston.

Cash deals for homes have made Honolulu’s housing market even tighter for working and middle-class homebuyers. They often lose out to a limited liability corporation that comes to the bargaining table ready to pay cash for a home.

In 2014, RealtyTrac reported that nearly half of all Honolulu home sales were cash deals in that year’s first quarter. The number of cash deals has been rising in recent years because of stricter lending criteria and low housing inventory.

About 20 percent of Honolulu’s homes are worth at least $1 million according to a study by real estate website, Trulia.