I am from China. I plan to apply for EB-5. I heard there was some change for loans recently. I want to invest by taking a loan on the house of my husband. I paid for this house eight years ago. I understand the house will be the collateral for the loan. Based on the new rules, who should be the principal EB-5 applicant – would it be better if I am the principal applicant or him directly?
This new USCIS policy may be reversed due to current litigation in the federal courts. However, to be safe, you might wish to consider making him the principal applicant in order to avoid the issue. It is my opinion that by the time your I-526 is adjudicated, this issue will be resolved in favor of allowing for this type of source of funds.
8 C.F.R. 204.6(e) provides that "...indebtedness secured by assets owned by the alien entrepreneur [immigrant investor], provided that the alien entrepreneur [immigrant investor] is personally and primarily liable..." During the EB-5 Stakeholders meeting about a month ago, USCIS indicated that they will follow this rule fairly strictly. Thus, if you are taking out a loan based on a real estate you own collateralized by that property, it will meet the standard as long as you could show that the funds with which you purchased that property were legally obtained. Between the husband and wife, their assets are interchangeable, so he could take out the loan in his name and give the funds to you to invest in an EB-5 project. If he could be the principal investor, then it will be cleaner, but not necessary.
If you can show that it was solely your funds that purchased the property, it is probably better that you be the principal applicant.
It is advisable for the EB-5 investor to take out a mortgage or loan on the house they own. That is, it is their collateral - their house being used for the loan.
If the money for the investment is borrowed, it will not work. It needs to be your money.
Under current Chinese law, who owns the house? I assume that you would be taking an equity loan on the house or seeking a new mortgage. In either case, the EB-5 principal should be the person who owns the property which secures the loan. If the loan were not repaid, there can be no recourse against the assets of the EB-5 applicant such as would attach to the EB-5 investment. The legal question currently being litigated concerns an EB-5 investment secured by property owned by a third party. This does not seem to be your situation.
It seems you may have an approvable source of funds, but we would look closely into the information and documentation you can provide to prove this source is lawful.
The legal house owner (your husband) should be the sole borrower of the loan (do not use co-borrowers). It does not matter who the principal applicant is, but if it is you, then you and your husband also need a written gift agreement by which he gifts the proceeds of the loan to you. It is best if you first obtain the detailed advice of an attorney.
Even with the new changes this strategy will be fine if either you or your husband applies.
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