Accredited Investor Definition: Who Qualifies in 2026
An accredited investor is a person or entity that meets the tests in SEC Rule 501(a), which opens private offerings such as 506(c) syndications. A person qualifies with income over $200,000 ($300,000 joint) in each of the last two years, net worth over $1 million excluding the home, or a Series 7, 65 or 82 license. If you are the sponsor, we built DoorRaise to check these for you.
This post explains the definition. For how sponsors prove it, see accredited investor verification. For the bigger picture of how these deals work, see our guide to real estate syndication.
Who qualifies as an accredited investor?
The definition is in 17 CFR 230.501(a). Individuals qualify through one of several tests, and you need to meet only one.
| Test | Requirement |
|---|---|
| Individual income | Over $200,000 in each of the two most recent years, with a reasonable expectation of the same in the current year |
| Joint income | Over $300,000 with a spouse or spousal equivalent in each of the two most recent years, with the same expectation |
| Net worth | Over $1,000,000, alone or with a spouse or spousal equivalent, excluding your primary residence |
| Professional license | A Series 7, 65 or 82 license in good standing |
| Knowledgeable employee | Certain employees of a private fund, for investments in that fund |
| Insider of the issuer | A director, executive officer or general partner of the company selling the securities |
The rule defines a spousal equivalent as "a cohabitant occupying a relationship generally equivalent to that of a spouse."
How does the net worth test treat your home?
Your primary residence is left out of your assets, and the mortgage on it is generally left out of your liabilities, up to the home's estimated fair market value. Two traps follow. Mortgage debt above the home's value counts as a liability. And borrowing secured by the home in the 60 days before you invest counts as a liability too, unless the money bought the home.
That 60-day rule exists so people cannot borrow against a house just to cross the line. If you recently refinanced, tell your CPA before you fill out a questionnaire.
How does the income test work?
You must have beaten the threshold in each of the two most recent years and reasonably expect to beat it again this year. One strong year and one weak year does not qualify. Income is looked at on your own or jointly with a spouse or spousal equivalent, and the joint number is higher for that reason.
Worked examples (illustrative)
These examples use made-up numbers. They show how the tests work, and are not advice on any person's status.
Example 1, net worth. An investor has a home worth $600,000 with a $350,000 mortgage, a brokerage account of $450,000, a retirement account of $300,000 and $100,000 in cash. She also owes $20,000 on a car and $10,000 on credit cards. The home and its mortgage are set aside. Assets: $450,000 + $300,000 + $100,000 = $850,000. Liabilities: $20,000 + $10,000 = $30,000. Net worth for this test: $820,000. She does not qualify on net worth.
Example 2, joint income. A married couple earned $180,000 and $210,000 individually in the first year, and $190,000 and $120,000 in the second. Combined that is $390,000 and $310,000. Neither spouse alone clears $200,000 in both years, but both years are over $300,000 jointly. If they expect the same this year, they can qualify on joint income.
Example 3, a gap year. An individual earned $230,000 two years ago but only $190,000 last year. The test fails because it needs over $200,000 in each of the two most recent years.
Which entities are accredited investors?
Entities can qualify in several ways, and each has conditions the entity must meet. The main ones in Rule 501(a) are below.
- Total assets. More than $5,000,000 in total assets for certain entities, if not formed to acquire the securities offered. Rule 501(a) lists which entity types can use this test.
- Investments. An entity not formed to acquire the securities that owns more than $5,000,000 in investments. The SEC added this catch-all category in 2020.
- Trusts. A trust with total assets over $5,000,000, not formed to buy the securities, whose purchase is directed by a sophisticated person.
- Family offices. A family office with more than $5,000,000 in assets under management, not formed to acquire the securities, and directed by a person with the knowledge to evaluate the investment.
- All owners accredited. An entity in which every equity owner is accredited.
The SEC adopted the 2020 amendments on August 26, 2020, and they took effect December 8, 2020, according to the SEC's compliance guide on the amendments. If an LLC wants to invest and was formed just for your deal, ask counsel which path applies.
How many people are accredited investors?
About 24.3 million US households, or 18.5%, met a financial accredited investor standard in 2022, according to the SEC staff's December 2023 review of the definition. In 1983 the figure was about 1.51 million households, or 1.8%.
The thresholds were set long ago and are not indexed to inflation, which is a major reason the share has grown. These figures describe households that meet a financial standard, not people who actually invest in private deals.
Are there new rules for accredited investors in 2026?
Not yet. On September 30, 2026, the SEC issued five notices asking for public comment on possible new ways to qualify, but none is a final rule. Nothing takes effect unless the SEC later issues a separate order after reviewing comments, which Rule 501(a)(10) requires.
| Release | Possible new way to qualify |
|---|---|
| 33-11445 | Passing an accredited investor exam developed by FINRA |
| 33-11446 | Holding a US CPA license |
| 33-11447 | Holding a CFA charter |
| 33-11448 | Holding a CFP certification |
| 33-11449 | Holding a Series 79 (investment banking) or Series 86 or 87 (research analyst) license |
Comments are due 60 days after the notices are published in the Federal Register, per Morrison Foerster's summary. The exam notice was published on October 5, 2026, per the Federal Register, which puts its comment deadline at December 4, 2026.
A separate March 2025 SEC staff letter affects verification, not the definition. See accredited investor verification.
Why does the definition matter for real estate syndications?
Most syndications are private offerings under Regulation D, and who may invest depends on the exemption. Our post on what Regulation D is covers the framework.
- Rule 506(c) deals can be marketed publicly, but only accredited investors may buy and the sponsor must verify each one.
- Rule 506(b) deals allow up to 35 sophisticated non-accredited purchasers in any 90 days, with no public marketing.
- Regulation Crowdfunding and Regulation A admit non-accredited investors, usually with limits. See Regulation Crowdfunding for real estate.
See 506(b) vs. 506(c) for how sponsors choose. If you are an investor who does not qualify, read investing in apartments without being accredited.
Our take
Our take: the accredited investor line is a legal tool, not a judgment about who is wise with money. A $1 million net worth does not make anyone good at evaluating a syndication, and falling short does not make anyone bad at it.
We think investors should treat qualification as the start of diligence, not the end. Ask the questions in our post on questions to ask an apartment sponsor before you wire anything. We also think sponsors should never nudge an investor toward claiming status they do not have.
Trade-offs and who this is not for
The definition excludes many capable people and includes some who are not careful. It is a blunt rule, and it only tells you who is allowed to invest.
- Not for people who qualify only by stretching. Counting a home equity loan, an unsettled debt or an optimistic income guess is a mistake that can hurt both of you.
- Common mistake: counting the primary residence as an asset. It does not count under the net worth test.
- Common mistake: forgetting the two-year income look-back. One big year is not enough.
- Qualifying is not suitability. Meeting the test does not mean a deal fits your goals or that you can afford to lock up the money. Illiquidity and loss are real risks.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from people who already trust them, under Rule 506(b) or 506(c). We are software, legal document preparation, escrow coordination and verification services. We are not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent, and we do not hold investor money.
Accreditation checks on every investor are part of the $500 setup fee, which also covers the deal's LLC, investor documents from attorney-approved templates, an escrow account and the deal page. The $5,000 closing fee, paid from the funds raised and only if the deal closes, covers attorney review of the offering documents, sponsor and property checks, the Form D filing and electronic signing. The $3,500 yearly fee covers bookkeeping, the tax return and K-1s. We take 0% of the raise or profits. State filing fees are included in the $5,000 closing fee. We do not decide whether an investor qualifies for you; the sponsor remains responsible for that call.
Ready to raise? Create your free sponsor page or see pricing.
FAQ
What qualifies you as an accredited investor?
Income over $200,000 ($300,000 joint) in each of the last two years with the same expected this year, net worth over $1 million excluding your home, or a Series 7, 65 or 82 license in good standing. Certain entities and insiders also qualify.
Does home equity count toward the $1 million net worth test?
No. Your primary residence is not counted as an asset, and its mortgage is generally not counted as a liability up to the home's value. Mortgage debt above that value counts, as does borrowing against the home in the 60 days before you invest, unless it was used to buy the home.
Can a couple qualify together?
Yes. Joint income over $300,000 in each of the last two years, or joint net worth over $1 million, counts for spouses and spousal equivalents.
Is there an accredited investor exam?
Not yet. In September 2026 the SEC asked for comment on an exam developed by FINRA, but nothing has been adopted. Check sec.gov for updates before relying on any new route.
Do the accredited investor thresholds adjust for inflation?
No. The $200,000, $300,000 and $1 million figures are written into the rule and are not indexed, which is why more households qualify than in 1983.
Can I just check a box to say I am accredited?
In a 506(b) deal, sponsors often rely on a questionnaire along with a reasonable belief. In a 506(c) deal, the sponsor must take reasonable steps to verify, so a checkbox alone is not enough in most cases.
Sources
- 17 CFR 230.501, definitions (Cornell LII)
- 17 CFR 230.506 (Cornell LII)
- SEC, amendments to the accredited investor definition
- SEC staff review of the accredited investor definition (Dec. 2023)
- Morrison Foerster, SEC seeks comment on new pathways (Oct. 2026)
- SEC, Rule 506(c)
- SEC, Rule 506(b)
This article is general information as of October 2026, not legal, tax or investment advice. Ask your attorney or CPA whether you qualify. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.