Talk to an Advisor

Accredited Mortgage Trust (AMT)

An Accredited Mortgage Trust (AMT), within the Delaware Statutory Trust (DST) industry, refers to a specific kind of investment vehicle that allows accredited investors to invest in a pool of mortgages. AMTs are typically structured as a Delaware Statutory Trust, which is a legally recognized trust set up for the purpose of business operations, such as holding investment assets, including real estate, loans, or mortgage-backed securities.

The DST structure offers several benefits, including offering a way to hold fractional interests in large, institutional-quality real estate assets. In the case of an AMT, the trust would hold mortgages or mortgage-backed securities. Investors in an AMT would receive pass-through tax treatment, meaning that the income and capital gains generated by the trust’s assets are passed directly to investors, avoiding double taxation.

To qualify as an accredited investor in the United States, an individual must meet certain income or net worth thresholds as defined by the Securities and Exchange Commission (SEC). This requirement is in place because investments in trusts like AMTs are considered to be higher risk and are thus limited to individuals and entities that have the financial sophistication and the ability to absorb potential losses.

AMTs in the DST industry are part of a broader category of real estate investments that can offer diversification, potential for income through interest payments, and possible capital appreciation. However, they also carry risks such as interest rate sensitivity and the credit risk of the underlying mortgages.