The EB-5 program requires participating foreign nationals to
- invest the required minimum amount ($800,000 for projects in targeted employment areas, or TEAs, and infrastructure projects designated by the Department of Homeland Security, and $1, 050,000 for other projects),
- create or preserve at least 10 full-time jobs,
- invest in a new commercial enterprise or troubled business, and
- use funds that remain at risk.
The only way U.S. real estate could be used in this process is if the property becomes the location of a new business that fulfills the aforementioned job creation requirements. Simply purchasing a property in the United States will not be considered an EB-5 investment nor count toward the foreign national’s minimum invested amount.
However, foreign nationals with U.S. real estate could use it to secure a loan and then use the loaned funds to invest in an EB-5 project. United States Citizenship and Immigration Services (USCIS) allows EB-5 investors to use a wide variety of sources to finance their projects, and loans are considered an acceptable source of funds. USCIS does not limit the location of the source of funds, so the lender can be located in any country. Still, investors cannot use the EB-5 project in question or their primary residence as collateral for the loan; they must use other personal assets.
The main requirement is for investors to prove with ample evidence that their funds were sourced lawfully. Therefore, investors who own U.S. real estate and are interested in using it to secure a loan for their EB-5 investment will need to submit lengthy documentation with their Form I-526. For instance, they may have to include employment records or other documents that explain how they obtained the funds for purchasing the property used as collateral. They will likely have to attach a capital source statement that details the loan terms and provides information about the lender.
