Portfolio margin account overnight leverage

I know for a regular margin account, the requirements of Regulation T generally limit leverage on equity to 2:1, which means SMA has to be positive for overnight.

Both statements are true but they are not linked as your statement implies.

The initial margin requirement is 50%.

SMA is the buying power or excess equity available in a margin account for buying additional securities (cash plus available margin).

If one goes to full margin, SMA is zero. However, a decline in the value of the holdings does not cause SMA to decline below zero. It causes a lower margin amount which results in a restricted account (margin between 25% and 50%). At that point, additional purchases must be funded by the additional initial margin requirement.