What 16 CFR §460.16 puts in a new home's sales contract: insulation type, thickness and R-value

1. The paragraph about the sales contract, its one exception, and the standard §460.10 attaches to every statement the regulation calls for

§460.16 is one paragraph and it is quoted below whole. The rule is its first sentence: a new home seller puts three items — the type, the thickness and the R-value of the insulation that will be installed — in every sales contract, and the sentence ends "in each part of the house". The three items are asked for per part, not once for the house.

The paragraph then announces its own exception, and the exception has two triggers and one route. The triggers, joined by "or": the buyer signs a sales contract before the seller knows what type of insulation will be put in the house; or there is a change in the contract. The route: the seller "can give the buyer a receipt stating this information as soon as you find out". Note the two verbs. The main rule is written with "must put"; the exception with "can give". The paragraph does not define "receipt", does not say what form it takes, and does not say what follows if neither the contract nor a receipt carries the information.

Nothing in the paragraph says who signs the contract, who drafts it, or whether the information goes in the body of the agreement or in an attachment. The paragraph says "in every sales contract" and stops. Whether a particular addendum, specification sheet or exhibit is part of a sales contract is a question about that document and about law in the reader's state, which this page does not name.

§460.10, also one paragraph and quoted below, speaks to "all statements called for by this regulation" and sets one standard for them, in the words "clearly and conspicuously". Which of the items on this page that phrase reaches is not something the section spells out, and this page does not decide it. The section's second sentence points at 16 CFR 14.9, and the section does not define "clearly and conspicuously".

2. Who the part says it covers, what it says it does, and when it applies

§460.16 is addressed to "a new home seller", and the part defines neither "new home", "new home seller" nor "sales contract". It says what home insulation is, in §460.2, quoted in the next section.

What it does say about coverage is in §460.3, quoted below whole. The section lists who is covered — manufacturers, distributors, franchisors, installers, retailers, utility companies, trade associations, advertisers and advertising agencies, testing labs — and then adds one group named by what it sells rather than by an insulation trade: "If you sell new homes to consumers, you are covered." That is the one sentence in the part addressed to who is covered as a seller of new homes. Whether a listing agent, a builder's on-site sales office, a builder or a developer answers those words is a question about those facts and about Commission decisions this page does not quote.

§460.1 says what the part deals with — R-value claims and home insulation labels, fact sheets, ads and other promotional materials — and what breaking a rule is: an unfair or deceptive act or practice, or an unfair method of competition, under Section 5 of the Federal Trade Commission Act. Its last sentence points at §1.98 of the same chapter for the civil penalty amount. §1.98 is not quoted on this page and no figure from it appears here.

§460.4 says when the rules apply, and it is a list of verbs: each time you import, manufacture, distribute, sell, install, promote or label home insulation; each time you prepare, approve, place or pay for labels, fact sheets, ads or other promotional materials for consumer use; each time you supply anyone covered with written information for those materials. Its last two sentences speak to testing labs and to §460.22.

3. What "home insulation" means in this part, and what an R-value measures

§460.2 is the part's definition of home insulation and it is quoted whole. It is drawn by function first — "any material mainly used to slow heat flow" — then by material and form, then by where it is for use: old or new homes, condominiums, cooperatives, apartments, modular homes, mobile homes. Two things are taken out, pipe insulation and duct insulation other than duct wrap, and one thing is added: insulation developed and marketed for commercial or industrial buildings that is also marketed for and used in residential buildings.

§460.5 is the part's testing section, and its opening paragraph carries the sentence that says what the third item in §460.16 measures: "R-value measures resistance to heat flow." That paragraph is quoted below; the rest of the section is not.

Neither sentence says what R-value a house ought to have, and neither does this page.

4. Appendix A, the other provision that names the sales contract

Appendix A to part 460 is titled "Exemptions". Its introductory paragraph is quoted below; the two sentences that matter here are that some exemptions are conditioned on alternative actions and that all other requirements of the part still apply. Of the appendix's four lettered units, (a) and (b) are named here and not quoted; (c) and (d) are quoted whole.

Unit (c) is the one about new home sellers. (c)(1) opens "New home sellers are exempted from:" and four numbered clauses follow, each naming a requirement in §460.18 or §460.19 — the paragraphs concerned are quoted in the next two sections. Nothing in the unit adds a requirement; it takes four away, one of them on a condition. Three of the four clauses carry no condition. The second, (c)(1)(ii), does: the exemption from making the R-value explanatory statement or the savings explanatory statement in an advertisement or other promotional material is "conditioned upon the new home sellers alternatively disclosing the appropriate explanatory statement in the sales contract along with the disclosures required by § 460.16". It is the one other provision of the part in which the sales contract appears, and it is why a reader of §460.16 alone would be reading half of what the part says about that document.

Clause (c)(1)(iv) separately exempts new home sellers from including "the reference to fact sheets" when they make either explanatory statement. The two statements are printed in full inside §460.18(a) and §460.19(b) below, each of which contains a sentence about fact sheets. This page does not compose a version of either statement with that sentence removed; it prints the statements as the regulation writes them and prints the clause that speaks to the reference.

(c)(2) extends the new-home-seller exemptions to home insulation sellers who participate with a new home seller to advertise and promote the sale of new homes, provided, as the clause puts it, that the primary thrust of the material is the promotion of new homes and not of the insulation product. Unit (d) is one sentence: the requirements in §§460.6 through 460.21 — a span that contains §460.16, §460.18 and §460.19 — do not apply to R-value claims covered by §460.22.

5. The advertising paragraph the appendix points at: §460.18(a), and its carve-out

§460.18 has five paragraphs, (a) through (e). Two are quoted below: (a), because Appendix A(c)(1)(i), (ii) and (iv) name it, and (e), because it is the carve-out that qualifies (a). Paragraphs (b), (c) and (d) are not.

Paragraph (a) is written as a trigger and a consequence. The trigger is an ad that gives an R-value. The consequence is two things the ad then gives — the type of insulation and the thickness needed to get that R-value — plus a statement printed inside the paragraph, two sentences long: "The higher the R-value, the greater the insulating power. Ask your seller for the fact sheet on R-values." The second sentence is the reference to fact sheets that Appendix A(c)(1)(iv) speaks to, and the whole statement is the R-value explanatory statement that Appendix A(c)(1)(ii) can route into the sales contract.

Paragraph (e) is the carve-out. The affirmative disclosure requirements of the section do not apply to television or radio advertisements or to space-constrained advertisements, and (e) then defines the last term — communications through interactive media with space, format, size or technological limitations that prevent the disclosures being made clearly and conspicuously — and places the burden of showing insufficient space on the industry member. This page does not say whether any particular listing, portal page, social post or flyer is an ad, or a space-constrained one.

6. The savings-claims section the appendix points at: §460.19

§460.19 has seven paragraphs. Six are quoted below — (b) and (c), which the appendix names, and (a), (d), (e) and (g), which qualify them; (f) is not. Its subject is a claim, in ads, labels or other promotional materials, that insulation can cut fuel bills or fuel use, and the quoted paragraphs are of three kinds. Paragraphs (a), (c) and (e) are about having a reasonable basis for the claim — (a) for the claim itself, with the section's own examples of the words that make one; (c) for a claim about a combination of products, with the further requirement to say how much of the savings came from each; (e) for who is liable, which separates a manufacturer from everyone else.

Paragraph (b) is the statement. Anyone the part covers who says or implies in ads, labels or other promotional materials that insulation can cut fuel bills or fuel use must make it, and it is three sentences: "Savings vary. Find out why in the seller's fact sheet on R-values. Higher R-values mean greater insulating power." This is the savings explanatory statement Appendix A(c)(1)(ii) can route into the sales contract, and its middle sentence is the reference to fact sheets that Appendix A(c)(1)(iv) speaks to.

Paragraph (d) coordinates the two sections: material covered by §460.18(a) through (d) that also makes a savings claim follows both sections, and need not make the R-value statement in §460.18(a). Paragraph (g) is the same carve-out as §460.18(e), for television, radio and space-constrained advertisements, and it points back to §460.18(e) for the definition.

Where each of the opening situations lands in the text

This page opened with four situations. The figure below names the words each one runs into, so the reading starts in the right place instead of at a search result. None of the rows is a verdict; each stops at the words.

Checking the quotes, and what they do not cover

Part 460 runs from §460.1 to §460.25, followed by Appendix A. This page quotes §460.16, §460.10, §460.3, §460.1, §460.4 and §460.2 whole, each being one paragraph; the opening paragraph of §460.5; Appendix A's introduction, the chapeau of (c)(1) with all four of its clauses, (c)(2) and (d); §460.18(a) and (e); and §460.19(a) through (e) and (g). Twenty-three quotations in all. The rest of the part is named in the figure below and quoted nowhere on this page.

Every quote comes from eCFR's current text of the part, read section by section, and eCFR states an "as of" date for the whole title which is printed beside each entry in the source list below. Each quote also carries the date it was loaded.

Real Deal Pro, Inc. is a software company. It is not a builder, not a real estate brokerage, not an insulation seller and not a law firm. The gap between "the regulation says this" and "so this contract is fine" is exactly the gap a lawyer is for.

Wrapping up

The paragraph at the centre of this page is one paragraph of an FTC rule, and it puts three items — type, thickness and R-value of the insulation, for each part of the house — in every new home sales contract, with one exception that runs through a receipt given as soon as the seller finds out. The part addresses that paragraph to "a new home seller" and supplies one sentence about who is covered as a seller of new homes.

The sales contract appears in one other provision, Appendix A(c)(1)(ii), which lets a new home seller leave the R-value or savings explanatory statement out of an advertisement or other promotional material on condition that the appropriate statement goes in the sales contract along with the §460.16 disclosures. Both statements are printed above inside the paragraphs that write them.

Related reading

• The federal lead-based paint disclosure rule, in its own words

  Another federal rule that writes required elements into a residential sales contract

• How the Closing Disclosure three-day rule works, and what the creditor needs from you

  Another federal rule whose text speaks to a change made after the document is delivered

• What fair housing advertising rules say about listing copy

  Another federal rule that governs the words in an advertisement for a dwelling

Sources

Every quotation above is taken from the documents below, on the date shown; the explanation around each quote is ours. Statutes are amended and uniform acts are revised — check the current text before relying on any of it.

1. [1] 16 CFR §460.16 — What new home sellers must tell new home buyers (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.16, read September 11, 2026
2. [2] 16 CFR §460.10 — How statements must be made (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.10, read September 11, 2026
3. [3] 16 CFR §460.3 — Who is covered (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.3, read September 11, 2026
4. [4] 16 CFR §460.1 — What this part does (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.1, read September 11, 2026
5. [5] 16 CFR §460.4 — When the rules in this part apply (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.4, read September 11, 2026
6. [6] 16 CFR §460.2 — What is home insulation (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.2, read September 11, 2026
7. [7] 16 CFR §460.5 — R-value tests (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.5, read September 11, 2026
8. [8] 16 CFR Part 460, Appendix A — Exemptions (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/appendix-Appendix%20A%20to%20Part%20460, read September 11, 2026
9. [9] 16 CFR §460.18 — Insulation ads (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.18, read September 11, 2026
10. [10] 16 CFR §460.19 — Savings claims (eCFR, current as of September 9, 2026) — Office of the Federal Register / Government Publishing Office, www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-460/section-460.19, read September 11, 2026