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Washington State Accredited Investor Definition Further Excludes Indebtedness Secured by Primary Residence

By Jim Hamilton

The part of the "accredited investor" definition from the Dodd-Frank Wall Street Reform and Consumer Protection Act that excludes the value of a natural person's primary residence from that person's more than $1 million in net worth at the time of the purchase was adopted by the Washington State Securities Division on January 21, 2011, along with the SEC's further exclusion for the related amount of indebtedness secured by the primary residence up to its fair market value. But any indebtedness secured by a natural person's primary residence that exceeds the fair market value of the residence will be considered a liability that is deducted from the person's net worth.

For more information please see Interpretive Statement #23 at http://www.dfi.wa.gov/sd

Full post as published by Jim Hamilton's World of Securities Regulation on January 25, 2011 (boomark / email).