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ILW.COM EB-5 Blog

Many Real Estate Developers Look to Using EB-5 Funds

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Today's real estate world has begun
to bounce back and development around the United States is increasing. Builders
are on the move for more creative sources of funding and firms want to find
different ways of raising money, other than the popular forms of tax credit
lending and the use of mezzanine funding.


The EB-5 Investor Visa Program is
one alternative method of raising funds that has recently become more popular
in the last few years. Under the Immigration Act of 1990, the EB-5 Program is a
way for foreign investors to gain conditional residency in the United States by
investing in an American business or Regional Center. This program is
administered by the United States Citizenship and Immigration Services (USCIS)
and EB-5 is an abbreviation for Employment-Based Immigration: Fifth Preference.
EB-5 has recently been a valuable option for those wishing to raise funds for
real estate development and real estate projects using EB-5 funds are typically
conducted through an EB-5 Regional Center.


A Regional Center is a public or a
private body that is designated by USCIS to oversee EB-5 projects. Regional
Centers are also involved in job creation, improving the productivity of specific
regions, increasing domestic capital and promoting economic growth. Most of
EB-5 investment (90-95%) is conducted through Regional Centers.


Developers wishing to secure funds
through EB-5 investments should keep in mind that Regional Centers are
designated by the USCIS, and thus, EB-5 projects take a long time to be approved.
Also, raising funds from the investments may take from nine to twelve months
due to time needed for review of the investors and the business plan for the
project. Additional time will be needed for other steps of the process,
including agreement between the Regional Center and the project, overseas
marketing of the project, the processing of the applications for the investors'
visas, securing the investment and more.


Developers should be sure that
using EB-5 funds for their project will be cost effective in the long run. For
example, a smaller project may not benefit from the use of EB-5 funds because
of the extra costs and time constraints the project will face. However, many
larger development projects may benefit from the use of EB-5 investment. First
of all, EB-5 investment can be used in any type of development project,
including office buildings, hotels, industrial, and multi-family projects.
Additionally, EB-5 Program is also an option for diversifying a project's
capital and projects will profit from lower-interest rates on loans through
EB-5 because the investment may be made in the form of equity or a loan. Most
likely, a larger project is better suited for the use of EB-5 investments.


After making the investment, the
investor, their spouse and their unmarried children under the age of 21-years-old
will receive conditional green cards for two years. If the creation of ten jobs
is approved by USCIS at the end of the two years, the investor and his or her
family may be eligible for permanent residence and many investors go on to
obtain full citizenship in the United States.


For more information and a
directory of EB-5
attorneys
, visit EB5Investors.com

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