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Rise in EB-5 Investment Amounts Expected Soon

February 23, 2019 by John Roth Leave a Comment

On Friday, February 22, the USCIS formally completed its revisions to its proposed rule that will raise the EB-5 minimum investment amount to $1.35 million by sending its draft of the Final Rule to the Office of Management and Budget (OMB). This change does not require Congressional approval. There is a widespread consensus in the EB-5 industry now that the final rule will be announced within the next two to three months. Typically, newly-announced rules go into effect 30 to 60 days after announcement.

 

Filed Under: Latest News

Bridge Financing for EB-5 Projects

January 13, 2019 by John Roth Leave a Comment

Bridge financing is the use of a short-term loan or equity infusion to advance a development project until the project can secure permanent financing to carry the project to completion. In the EB-5 context, a senior construction loan has typically been secured by the time the EB-5 capital raise has begun, but construction cannot begin because the EB-5 funds are needed to begin construction. The project managers therefore “bridge” the period from the beginning of the EB-5 raise to the commencement of construction by obtaining a short-term loan or contribution of equity to move the project forward. This allows projects to significantly de-risk the construction by advancing construction beyond the early phases of construction where historically most construction delays occur (permitting problems, financing problems, labor problems, material problems, etc.).  Under the 5/30/2013 EB-5 Adjudications Policy Memorandum (since updated by the USCIS Policy Manual), the USCIS stated that EB-5 funds can be used to replace bridge financing long after construction has begun, and the EB-5 investors will get credit for all jobs created by the bridge financing.

Filed Under: Approved EB-5 Posts, Latest News

Advantages of Construction Underway while Awaiting EB-5 Funding

January 13, 2019 by John Roth Leave a Comment

Advancing construction while awaiting EB-5 funding allows EB-5 project managers to substantially de-risk the project by limiting to the time duration and scope of the future risk scenario. This is because most problems that stop or slow down a project occur in the design and drawing phase or in the very early stages of construction (there may be permitting, zoning, labor, material or financial problems yet to deal with). Most EB-5 projects are offered to investors during the design phase. Other projects use bridge or equity financing to advance project construction and thereby reduce risk to investors. Another advantage is that the financial analyst doesn’t have to look as far into the future when projecting future cash flows from the project. It’s a lot easier to estimate cash flows for a project that will be operational in six months than it is to assess likely cash flows two years down the road. A lot can happen in those two years!

Filed Under: Approved EB-5 Posts, EB-5 Due Diligence

I-924 Exemplar Approval

January 13, 2019 by John Roth Leave a Comment

An I-924 “exemplar petition” is often filed by the regional center at the very beginning of the project offering. It is essentially an early I-526 petition without a petitioner. Only the project documents for a petition are sent to the USCIS with the hope that the Service approves the exemplar. If the USCIS approves the exemplar, then the project is approved for all subsequent I-526 petitions UNLESS the project managers make a “material change” to the project and/or its documentation. So, an I-526 petitioner filing based on an investment in an exemplar-approved project can only see his I-526 petition denied if 1) the project undergoes a material change (this is rare), or 2) there is a defect or deficiency in the petitioner’s source and path of funds part of the petition.

Filed Under: Approved EB-5 Posts, EB-5 Due Diligence

EB-5 Pilot Program Extended Until 3/23/2018

February 9, 2018 by John Roth Leave a Comment

Congress today passed and the President signed a short-term spending package that includes an extension of the EB-5 Pilot Program until March 23, 2018.  The two-year deal for defense and other government spending does not affect the EB-5 extension. They are separate items in the same bill.

Congress now has six weeks to pass a bill. If they don’t, the USCIS will likely raise the minimum amount to $1.35 million through a change in regulations.

 

Filed Under: Approved EB-5 Posts

Next Page »

EB-5 Investor Blog

  • Rise in EB-5 Investment Amounts Expected Soon
  • Bridge Financing for EB-5 Projects
  • Advantages of Construction Underway while Awaiting EB-5 Funding
  • I-924 Exemplar Approval
  • EB-5 Pilot Program Extended Until 3/23/2018
  • Just How Scary are EB-5 Investments?
  • How Important is A History of I-829 Approvals?
  • EB-5 Reform in 2017?
  • Just How Scary are EB-5 Investments?
  • Will the EB-5 Minimum Investment Amount Be Raised This Summer?
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