A draft proposal narrows flexibility in seeking bridge finance for EB-5 projects
The US Department of Homeland Security has proposed new regulations that would restrict the use of 'bridge financing' in EB-5 investment projects. Attorneys warn this could complicate project funding and reduce the number of qualifying developments.
Why it matters
Changes to the EB-5 program directly impact foreign investment in US real estate and infrastructure, potentially slowing down development projects.
The US Department of Homeland Security (DHS) has proposed regulations that would tighten the treatment of ‘bridge financing’ under the EB-5 Programme (commonly known as the investment linked green card programme).While the proposal is aimed at ensuring a stronger link between investor funds and job creation, immigration attorneys say it could reduce the number of projects that qualify for EB-5 funding and make project due diligence even more critical for investors.Under the EB-5 programme, foreign nationals can obtain permanent residence (green card) by making a qualifying investment (eg: $800,000 in high unemployment areas)in a US enterprise that creates at least 10 full-time jobs for American workers. Most EB-5 investments are made via regional centers that pool investor funds into large development projects.In practice, many real estate and infrastructure projects begin construction using temporary bridge loans, with EB-5 capital replacing those loans once investor funds become available.
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