Real Estate
Home›Real Estate›Industry›Proposed EB-5 rule changes could restrict bridge finan…
Proposed EB-5 rule changes could restrict bridge financing for projects
The proposed updates would tighten job creation standards for EB-5 investors using bridge debt, a funding source commonly used to qualify under the program.
Bisnow reports that a recently released draft policy update for the EB-5 investor visa program, which underpins many US real estate developments, includes proposed restrictions on bridge financing that could disrupt projects currently in the pipeline.
The EB-5 program allows foreign nationals to pursue eventual US permanent residency by investing $800,000 to $1.1 million into development projects, typically through regional centers, and most EB-5 capital has historically been directed to real estate development.
According to Bisnow, the changes are designed to impose stricter job creation standards, and they could make bridge loans used in earlier phases less likely to qualify under the program, including situations where bridge debt used to pay down obligations previously met requirements.
An attorney and program specialist at JTC Group, Jill Jones, said in an email that the proposals could disqualify much of the EB-5 offerings getting ready to market, while also noting that US Citizenship and Immigration Services requested public comment before issuing rules, and she is optimistic about possible adjustments to avoid disruption.