The SEC’s net worth path to accredited investor status has one specific quirk: it excludes your primary residence and its mortgage from the calculation entirely, unlike a normal household balance sheet.
How it works
Subtracting the primary residence value from total assets, and subtracting the excluded mortgage debt (up to the residence’s value) from total liabilities, gives the adjusted net worth used for the $1,000,000 accredited investor threshold.
What this does not include
This does not include the income-based path to accredited investor status ($200,000 individual or $300,000 joint income for the past two years with a reasonable expectation of the same this year), a separate qualifying test entirely.
How to use this calculator
- Enter total assets, total liabilities, primary residence value, and mortgage debt on that residence.
Frequently asked questions
Why exclude the primary residence at all?
Regulators wanted the net worth test to reflect liquid, at-risk investable wealth rather than home equity, which isn’t easily accessible and shouldn’t be treated the same as investable assets when assessing sophistication or loss tolerance.
What if my mortgage exceeds my home’s value?
Only the mortgage debt up to the home’s value is excluded from liabilities — any mortgage debt beyond the home’s value is still counted as a liability that reduces net worth.
Does accredited investor status ever expire or need renewal?
It’s generally assessed at the time of each investment — an investor’s status can change over time, and issuers typically verify it fresh for each new accredited-investor-only offering.
