No; the guarantee of a home in return for an investment is problematic in two major ways.
First, if an EB-5 investor is guaranteed to use or own an asset as a result of their investment, the projected value of the asset in question is subtracted from the minimum investment amount. (The minimum investment amounts are $900,000 for targeted employment area [TEA] projects and $1,800,000 for non-TEA projects.) Therefore, the value of the home would be subtracted from the at-risk invested capital, thus lowering the investment amount and likely causing it to fail to meet the required minimum.
Second, EB-5 investors cannot be guaranteed any return of their investment, in part or in full—such guarantees would indicate that the investment is not truly at risk. All EB-5 investments must be able to result in financial loss or gain; an investment’s financial resolution cannot be predetermined. In this case, United States Citizenship and Immigration Services (USCIS) would deny the investor’s Form I-526, Immigrant Petition by Alien Investor.
USCIS is strict about enforcing the EB-5 program’s at-risk requirement, so foreign nationals interested in making an EB-5 investment should take care to comply with its many facets. For example, the investment must be made before Form I-526 is filed, and the EB-5 capital must be irrevocably committed to the project. Moreover, any profit distributions cannot be guaranteed and cannot come from the minimum investment amount.
Investors should also note that USCIS requires proof of an EB-5 project’s business activities. The project developer should provide sufficient evidence that it is indeed active—USCIS may even carry out site visits to ensure a project’s legitimacy. The project’s business plan and supporting documents must provide evidence of ongoing business activity.
The main purpose of the at-risk requirement is to ensure that the EB-5 capital is actually invested—USCIS does not want EB-5 participants to “buy” U.S. permanent resident status. Retaining an immigration attorney is vital to comply with the EB-5 program’s many guidelines.
