(Source: The Real Deal) A 10-year backlog in EB-5 applications has a silver lining:
$16.6 billion that investors can reinvest in real estate or other businesses if
they still want a green card.
The origin of the money is a unique problem with the EB-5
program, in which investors can invest $500,000 in a U.S. business in exchange
for a green card. But the program requires investors’ money to be “at risk”
pending the outcome of the application. Since the U.S. only hands out 10,000
EB-5 visas a year, a years-long backlog means some developers want to return
investors’ money before they obtain the green card.
The solution? In June, the U.S. Citizenship and Immigration
Services said by redeploying EB-5 capital, EB-5 investors can keep their money “at risk” in order
for their applications to remain in good standing. “People can find uses for
billions of dollars,” H. Ronald Klasko, an immigration lawyer based in
Philadelphia, told the Wall Street Journal.
More than $16.6 billion will be re-invested through 2020,
according to NES Financial, a California-based EB-5 servicer. In July,
Greystone & Co., NES and Capital United LLC launched a fund that will
provide real estate bridge loans with EB-5 money. Greystone expects the fund to
have raised $100 million by next year.
The redeployment issue has raised concerns about EB-5‘s future at a
time when the program faces reauthorization by Congress. USCIS’ June
memo, for example, has less rigorous standards for vetting projects that
receive redeployed EB-5 money. There is also no job-creation requirement
associated with the redeployed funds. [WSJ] — E.B. Solomont