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How can I use gifted money obtained as a mortgage loan to apply for EB-5?

I own a one-third share of a property. My two sisters own the other two thirds. My sisters and I applied for mortgage loan, with my two sisters and I as collateral providers and me as the sole borrower. The whole loan was transferred to my account. I understand this might not meet the requirement for legitimate source of funds for EB-5. If my husband applies for EB-5 as the principal applicant, can I gift the loan to him as the investment funds? What kind of proof should I provide and what are some better options?

Answers

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    If a loan is the source of funds for an EB-5 investment, then the collateral for the loan must be the personal collateral of the EB-5 investor.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    What you propose should work. You can use borrowed money, as long as you put up collateral for the loan. Your sisters would need to gift their share of the loan proceeds to you. All of you would have to show how you got the money to buy the property (legitimate source of funds).

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    There is nothing in using a monetary gift to petition for EB-5 visa program. However, if this is a loan, be ready to explain how the loan was obtained, such as providing information regarding the collateral for the loan. Furthermore, it is advisable that you should be prepared to provide information on how the money used to purchase the property itself was obtained. The essence is that you should be ready to document the process of how the EB-5 investment fund was secured and all your documentation must show the funding is legal.

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    Charles Foster

    Immigration Attorney
    Answered on

    You can use both funds for EB-5 investment purposes that are gifted as well as borrowed funds. As borrowed funds, they must be secured. If you applied for a mortgage loan and the loan was secured with property by you and your two sisters, but you are the sole borrower, and if the value of the security equals to or is in excess of the EB-5 investment amount, you should be able to use those funds for EB-5 investment purposes. Likewise, on the loaned funds, you could be the EB-5 investor and your husband benefits as your dependent or, in turn, you could gift the funds to your husband and he could be the principal investor.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Gifts are cool. Loans secured by personal assets are cool. Chaining together loans and gifts? I would need to look at the plan and documentation.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    As long as you can trace your funds that your gifting to your spouse (i.e., mortgage loan document, your ownership with your sisters, their gifting of the obtained loan amount to you, etc.), this should not be a problem.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    If your one-thirds ownership is sufficient for the $500,000 investment you can make it work. If not, this will not work. You have to have your sister's gift the property to you and then you have to mortgage it to make the full investment.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Whether you or your husband becomes the principal investor, usage of loan proceeds that is not collateralized by the property/asset that you completely or solely own is currently not allowed under the indebtedness policy of USCIS.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    Only one third of the loan funds are in compliance with EB-5 rules. This SOF cannot be made compliant if you do not own the entire property/collateral for the loan.

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    Phuong Le

    Immigration Attorney
    Answered on

    May work if you have enough equity in the house to cover the $500,000 investment based on your one-thirds ownership. It could work.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    This can work if the loan is secured by the property.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Loan proceeds can used for EB-5 but a loan must be in your name and secured by a collateral owned in your name as the principal EB-5 investor. Property must also be appraised to show an appraised value equal to or more than the loan proceeds. Alternatively, you may gift the loaned money to your husband but loan documentation must be reviewed with the EB-5 attorney.

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