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Unsecured Loans for EB-5 Investment

Under the United States Citizenship and Immigration Services (“USCIS”) policy manual it stipulates that a loan can be used as capital for the EB-5 immigrant investor program. However, under the conditions it states that the loan must be secured by the investors assets to be construed as eligible capital. This therefore meant that unsecured loans were deemed ineligible for investors to use under the EB-5 immigrant investor program. The D.C Circuit court judgement has overruled this section of the policy and has allowed for unsecured loans to be permitted for prospective EB-5 investors.

While the USCIS is yet to update their policy this judgement has been considered a monumental win for the EB-5 industry. For years USCIS has rejected applications made from unsecured loans labeling them as being indebted rather than establishing unsecured loans as part of the list of elements considered to be “cash”. This historic judgement, once enforced into USCIS policy, will allow prospective investors to submit their application using elements such as personal loans as a source of funds. This will thus open the gates for many applicants who have been wanting to start their application process but have not had all the funds needed.

From a prospective investor and EB-5 consultant standpoint this is a huge move to the progression of the program and its popularity. The increase of required capital investment from $500,000 to $900,000 has staggered the amount of applications the program received in 2020. Granted, the Coronavirus did have some impact on the amount of applications received, overall the increase in investment amount could be considered to be a high contributing factor.

In this historic case, Huashan Zhang v. United States Citizenship and Immigration Services, No. 19-5021 (D.C. Cir. 2020) USCIS argued that using an unsecured loan would be the same as a third party party purchasing a Green Card for the investor and this defeats the purpose of the investment requirement being at risk. They justified this argument with the requirement by congress for the investment to be a true investment and by that meaning that the investor must experience a certain level of exposure. While the argument was valid the judges established that a loan, whether secured or unsecured is still cash and should be a valid source of funds for any investor.

Our director Shai Zamanian states that “this decision will open more avenues for investors to participate in the program. Ultimately, looking at the previous year and all the many positive developments and changes the program has undergone, this is the right time to invest in the EB-5 visa”.

We at the American Legal Center Dubai, have been assisting families in the Middle East and Africa region obtain their U.S. EB-5 visa from Dubai for over 10 years. Additionally, collaborating with the best EB-5 attorney’s in the U.S. we ensure that all applications are completed for the satisfaction of USCIS to obtain approval.

If you are ready to start your migration journey with The American Legal Center of Dubai, contact us today for more information.

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