Accredited Investor Net Worth Test: How to Count Your Home and Debts
On this page
- How is net worth calculated for the accredited investor test?
- What counts as the primary residence?
- Worked example: a couple with a mortgage
- The 60-day rule explained
- Can a spouse's assets count if only one person invests?
- How do sponsors check the net worth test?
- Common mistakes with the net worth test
- Frequently asked questions
To qualify as an accredited investor on net worth, you need more than $1,000,000 in net worth, alone or together with a spouse or spousal equivalent, and the value of your primary residence does not count. Debt secured by the home is left out up to the home's value; debt above that value is counted as a liability. This is the test many first-time investors in a syndication use.
If you are the sponsor, we built DoorRaise to collect and check this status for each investor. This guide is for investors, and it sits beside our broader piece on the accredited investor definition.
How is net worth calculated for the accredited investor test?
Net worth is total assets minus total liabilities, with two adjustments the SEC rule spells out. The rule is 17 CFR 230.501(a)(5), and it reads the same for an individual and for a couple. Every figure is your own estimate of fair value on the day you invest, supported by statements.
| Item | How it is treated |
|---|---|
| Cash, brokerage and retirement accounts | Asset, at current value |
| Investment real estate (not your home) | Asset, at fair market value, with its mortgage as a liability |
| Business ownership | Asset, at a defensible value |
| Primary residence | Left out of assets |
| Mortgage on the primary residence | Left out of liabilities, up to the home's value |
| Mortgage above the home's value | Counted as a liability for the excess |
| New borrowing against the home in the last 60 days | Counted as a liability unless used to buy the home |
| Credit cards, car loans, student loans, personal loans | Liabilities |
What counts as the primary residence?
The rule excludes the "person's primary residence", the home where you actually live. A second home, vacation home or rental is not excluded, so its value counts as an asset and its mortgage counts as a liability. Land or a home you do not live in does not become a primary residence because you plan to move there.
Worked example: a couple with a mortgage
These figures are made up for illustration only.
| Line | Amount |
|---|---|
| Brokerage and cash | $620,000 |
| Retirement accounts | $480,000 |
| Rental duplex, fair market value | $400,000 |
| Rental duplex mortgage | ($250,000) |
| Car loans and credit cards | ($35,000) |
| Home worth $700,000 with a $550,000 mortgage | Left out of both sides |
| Net worth for the test | $1,215,000 |
The couple passes. If the home were worth $500,000 with a $550,000 mortgage, the $50,000 above the home's value would count as a liability and bring the total to $1,165,000, which still passes. If they had also pulled $90,000 out of the home 30 days before investing to fund the check, that $90,000 would count too, and net worth would drop to $1,075,000.
The 60-day rule explained
If you borrow against your home in the 60 days before you invest, that increase in debt counts against you, even though mortgage debt normally gets left out. The point is to stop someone from taking a home equity loan, holding the cash and showing a larger net worth than they really have. Borrowing used to purchase the home itself is not caught by this rule.
If you plan to invest and you are near the line, avoid new home-secured borrowing in the weeks before the subscription date.
Can a spouse's assets count if only one person invests?
Yes. The net worth test allows joint net worth with a spouse or spousal equivalent, and the investment does not have to be made jointly. Each person's separate finances can be pooled for the test. Your sponsor may ask for both people's statements to support a joint figure.
How do sponsors check the net worth test?
It depends on the exemption. In a Rule 506(b) offering the sponsor needs a reasonable belief and often relies on a written questionnaire. In a Rule 506(c) offering the sponsor must take reasonable steps to verify, and the rule names two document routes for net worth: asset statements (bank, brokerage and similar) plus a consumer report, with liabilities from the report and a written statement that nothing else is missing, all dated within the prior three months. A letter from a registered broker-dealer, SEC-registered adviser, licensed attorney or CPA can cover it instead. See how verification works and the CPA letter.
Common mistakes with the net worth test
- Counting home equity as an asset. The home is excluded.
- Forgetting a second property's mortgage while counting its value.
- Using the purchase price instead of a current estimate for a business or property.
- Ignoring recent home equity borrowing.
- Relying on stale statements. In a 506(c) deal that uses the rule's document method, statements older than three months do not count.
Frequently asked questions
Does the $1,000,000 include my 401(k) and IRA?
Yes. Retirement accounts are assets and count at their current value.
Is the home's value what I paid or what it is worth now?
Use a reasonable estimate of current fair market value. The sponsor or verifier may ask what you based it on.
Do I need to be accredited to invest in a syndication?
Often, but not always. Rule 506(c) requires every investor to be accredited. Rule 506(b) allows a limited number of non-accredited investors who meet disclosure and sophistication conditions. See investing without being accredited.
Can I qualify on income instead?
Yes. The income test is separate. See the income test for joint and individual filers.
Does being accredited make an investment safe?
No. Accredited status describes you, not the deal. Read the offering documents and see what to ask a sponsor.
Sources
- 17 CFR 230.501, Definitions and terms used in Regulation D (Cornell LII)
- SEC, Accredited investors
- SEC, General solicitation and Rule 506(c)
- SEC, Amendments to the accredited investor definition: compliance guide
The example is simplified and illustrative, not a projection. This article is general information as of November 2026, not legal, tax or investment advice. Talk to a securities attorney and a CPA about your situation. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.