EB5 Loan Funding | Indian Investors

The loans often feature favorable repayment terms, such as longer principal repayment periods and only interest payments in the early years, making EB-5 investment more accessible for qualified applicants.

Since the introduction of RIA (Reforms & Integrity Act), 2022, some regional centers &/or their affiliated entities have been offering collateral-free (totally unsecured) loans to their own EB-5 investors. The amount of EB-5 loan typically ranges between US$ 300,000 & US$ 400,000. Annual Interest rates are between 3% & 11%. There are a few regional centers who have now gone to the point where they are permitting the investors to accrue interest, and get the eventual aggregate liability knocked out against the repayment of investor funded capital, which the investor would have originally wired as his share towards the investment.

Obviously, these tricks may or may not be viewed positively by USCIS. As no repayments have been made by any regional center whatsoever, it is not clear if USCIS is going to be adaptive to these marketing gimmicks in the long run. Industry experts and immigration attorneys have warned of a industry wide regulatory scrutiny & hinted that these arrangements can lead to Requests for Evidence (RFE) or even denial of the investor's application, especially if the lender and regional center share common ownership or management.

It would not take an expert for a common sense that USCIS would never be comfortable if the funds are recycled from the project itself or its directly or indirectly related entities, as a camouflage.

No attorney or regional center is going to give a written assurance that USCIS will never contest these loan transactions. They will issue a diplomatic opinion, the credibility of which will be tested by time.

If investors still wish to pursue the loan program then there are a few options. At the minimum, each investor must ensure the following:

• Loan arrangement should be totally compliant with the requirements of USCIS including have a clear and lawful source of funds
• Prefer independent lending entities which do not have any direct or indirect connection, not even by the farthest stretch of imagination, with the regional centre, its directors, or employees.
• Cover yourself with appropriate agreement & disclosures