During the past two USCIS Stakeholder’s Meetings on EB-5 issues, EB-5 stakeholders, including Greenberg Traurig, have questioned USCIS on its policy of allowing loans to be a source of an investor’s lawful capital.  For many years, USCIS has allowed investors to secure a loan by a relative’s property, so long as that relative gifted the use of the real property as collateral for the loan.

USCIS, however, has recently changed its policy through the course of adjudicating I-526 Petitions and many stakeholders have reported that I-526 Petitions are being denied when the investor does not wholly own the real property used to collateralize a loan.  Following its April 22, 2015, stakeholders call, USCIS issued a written summary of the Immigrant Investor Program Office’s (IPO) Deputy Chief’s remarks on the issue.  USCIS now is stating that proceeds from a loan may qualify as capital of the investor provided that: (1) the investor is personally and primarily liable for the loan and (2) the value of the collateralized asset actually owned by the investor must meet or exceed the value of the loan.  In practice, many stakeholders are reporting Requests for Evidence (RFEs), Notices of Intent to Deny (NOIDs) and denials of petitions stating that where the investor does not personally own the entire property, it cannot be used as the collateral for a loan.  In other words, USCIS seems to be stating that the investor may only use loan proceeds as a source of funds if the loan is collateralized by the investor’s property and the investor solely owns the property, i.e. not jointly with a third party such as a parent, sibling or child.  USCIS seems to be continuing to approve cases where investor owns the property with his or her spouse. …
Continue Reading USCIS Changes Policy on the Use of Loan Proceeds as a Source of Funds