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USCIS Issues EB-5 Policy: Loan Proceeds to Be Viewed as Cash Rather than Indebtedness

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Noncitizens who seek an immigrant visa through the coveted Employment-Based Fifth Category (EB-5) program must meet minimum investment and job creation requirements. Such investments typically consist of capital contributions in the form of cash, equipment, inventory, and other tangible property. On July 22, United States Immigration and Citizenship Services (USCIS) issued a policy stating that loan proceeds will be viewed as cash rather than indebtedness.

EB-5 Investment of Loan Proceeds

Recently, a federal court held that interpretation of loan proceeds as indebtedness is not supported by the plain language of the regulation. USCIS issued a policy alert that it will amend its policy manual to reflect this change. Following this change, USCIS will continue to determine whether loan proceeds were lawfully acquired. It will also verify whether the investor has placed the required amount of capital at risk to generate a return on the capital.

Investors in the EB-5 program may use different sources of funds including loan proceeds to meet the minimum investment criteria. Loan proceeds as an investment have always been accepted by USCIS. The EB-5 investor must be the principal borrower of the loan and personally liable for repayment. The loan must be secured by the personal assets of the investor. Clear documentation proving the lawful source of funds must be provided while filing the I-526 petition phase.

Overview of EB-5 Investment Visa

Investors may qualify to invest in the EB-5 classification through regional centers that are designated by USCIS. On June 22, 2021, a federal court vacated the existing EB-5 Modernization Final Rule, returning the required standard minimum investment amount to $1 million and the minimum investment amount for Targeted Employment Area (TEA) to $500,000. TEA is identified as either rural areas, areas with a population of 20,000 or more, or areas with a high unemployment rate of at least 150% of the national average.

Investors who are interested in immigrating to the United States may directly invest in real estate, or opening their own business, under this visa category. Despite the invalidation of the final rule, which resulted in invalidating the increased minimum investment amounts, the Department of Homeland Security will likely take action to reinstate the final rule. Potential immigrant investors must wisely use this window to invest using the current minimum investment limit of $1million and $500,000 for TEA.

To learn more about this blog post or if you have any other immigration concerns, please feel free to contact me at or (484) 544-0022.