Questions and Answers > EB-5 Requirements

What can EB-5 investor proceeds be used for in a project?

We have a mixed-use building project,and the land cost is approximately 40 percent of the total project cost. Can the EB-5 investor proceeds be used to "replace" and take out the developer's original equity investment in the land cost?

Answers

• James Yang

  Immigration Attorney

  Answered on June 10, 2016

  As long as there are no conflicting agreements or terms, it is possible for a project to apply EB-5 funds immediately upon the investor's remittance into the project. It is also possible to apply EB-5 funds to all areas of the project, including the purchase of land. However, certain applications of funds, such as purchase of land, may not have any significant job-creating benefits. EB-5 funds can also be used to take out preexisting developer equity, so long as the project can demonstrate that their application is needed to ensure that the project can develop and therefore meet the target of creating sufficient jobs.

• Salvatore Picataggio

  Immigration Attorney

  Answered on May 20, 2016

  While EB-5 funds can be used to replace previous construction loans ("bridge loans"), USCIS has not generally accepted land purchases to be acceptable EB-5 expenditures.

• John J Downey

  Immigration Attorney

  Answered on May 20, 2016

  The cost of the land is not considered part of a building project. It cannot be included as part of the EB-5 investment.

• Raymond Lahoud

  Immigration Attorney

  Answered on May 20, 2016

  The EB-5 can serve as a type of mezzanine funding, in that it can be in the form of financing, instead of giving an equity position.

• Bernard P Wolfsdorf

  Immigration Attorney

  Answered on May 20, 2016

  There is a likelihood that USCIS will take the position this money is not being used for job creating activities. Purchasing land is not favored.

• Xiaosheng Huang

  Immigration Attorney

  Answered on May 20, 2016

  You can, but it is very complex.