When and why do we need a trust deed for EB-5 funds?

The attorneys that assisted with your regional center formation and offering documents should be able to assist you with this matter.

A trust deed is not necessarily needed to comply with the EB-5 immigration law/regulatory requirements, but it may be a requirement for a bank to participate in a senior loan so that it is protected and in first position. The EB-5 funding piece will be subordinated to that senior loan.

Whether or not a deed of trust is required depends upon how the project is structured. Normally, a deed of trust is filed on a property in order to secure the debt of the investors and that could be a good thing, but it is not typically part of an EB-5 project. But in this case, given the fact that your EB-5 funds will be structured as a subordinate loan, having a deed of trust protects the investors. You must still make sure that the total investment, including the construction loan and the equity put into the project by the developers is an appropriate amount; together that typically would be anywhere from 60%-80% of the total project.

USCIS does not allow EB-5 investment in a project to be structured as a loan. Since the funds must be "at risk", a guaranteed return of initial invested funds (ie., a loan) would not qualify.