Many Developers throughout virtually every state in the United States are now taking advantage of access to capital through the Regional Center Investor Pilot Program (commonly referred to as EB-5) as part of their capital stack. The question becomes is it right for me and if so what are my options?

Billions of dollars of projects have been successfully completed utilizing this program since originally being signed into law under President Bush in 1993; projects have included everything from major sports arenas, infrastructure projects, Las Vegas hotels & casinos, manufacturing facilities, hospitals, high rise residential, office buildings, resorts and most everything in between.

The program was designed to stimulate the U.S. economy by means of immigrant investors seeking U.S. residency through capital investment of either $500,000 or $1,000,000 in new or troubled commercial enterprise while creating no fewer than ten (10) direct or indirect new jobs per investor.

Regional Center EB-5 funding is attractive financing that has made it possible to begin many mixed-use construction projects such as hotels, apartments, office space, restaurants and health care facilities that may not have been started during the past years due to a lack of liquidity in the credit markets.

The EB-5 component of the Developers capital stack can best be described as a typical mezzanine financing. The loan structure is non-recourse and secured by the developers equity and interest in the project, subordinated only to the senior acquisition and construction financing.

The Regional Center EB-5 loan interest depends on the overall details of the project and the experience and strength of the Developer. The costs associated with a Regional Center EB-5 loan is considerably less than typical market mezzanine financing at today’s rates. Regional Center EB-5 sponsored loans are interest only with a balloon at term. The term of a Regional Center EB-5 loan is typically 5 years.

For additional information please contact us or see our Primer for Project Developers for additional information.