Let's Talk About Bridge Loans in EB-5

by Joseph Whalen

Folks have been asking if it OK to replace or payoff bridge loans or other alternate financing with EB-5 funds. The answer is a qualified yes. "Qualified?", you ask, "How so?"

Well, if one wants to replace earlier financing with EB-5, then they must state so to USCIS up-front. This prevents folks from hanging back and shopping around for a "done deal" or in other words, a completed project then merely swooping in and buying it up. There would have been no risk involved and that is not EB-5 compliant.

That answer begs the question of how to demonstrate to USCIS that the Regional Center was truly "committed" to the project early on in the process. In addition, by what mechanism(s) can a Regional Center put USCIS "on notice" of its intent to support a particular project and eventually replace earlier bridge financing with EB-5 funds?

Well, some kind of written agreement or contract should be executed between a developer and the Regional Center. If the particular project demands an amendment to the Regional Center's "scope", then it is easy and obvious that all such documents must be submitted with the amendment application. If, however, the desired project does not demand an amendment, then I suggest advising USCIS by sending an e-mail to the general inquires address [uscis.immigrantinvestorprogram@dhs.gov] and asking what to do about it. In any event, pulling a "surprise" after-the-fact is a dangerous game to play because, quite frankly, that will have provided an opportunity for fraud and deception. A significant delay in notifying USCIS about the desire to proceed in this type of structure, such as upon filing, real I-526 petitions, is just asking to be accused of hanging back, shopping around and then faking paperwork with a developer so as to be able to merely buy out a done deal and pretend like it was planned all along.

That's my two-cents for now.

About The Author

Joseph Whalen is not an attorney. He is a former government employee who is familiar with the INA. His education is in Anthroplogy with a concentration in Archaeology and has both a BA (from SUNY Buffalo) and an MA (from San Francisco State University) in Anthroplogogy. He previously worked as an Archaeologist for the U.S. Forest Service before becoming an Adjudicator with INS which became USCIS.

The opinions expressed in this article are those of the author(s) alone and should not be imputed to ILW.COM.