In recent years, the EB-5 program has evolved, especially in how investors structure their source of funds. One area that remains particularly risky is the use of loans from affiliates of the project receiving the investment. While some adjudications have allowed these arrangements, investors should be cautious: this strategy may jeopardize the primary goal—securing a U.S. green card.
The $800,000 Investment Requirement—and Why It Matters
At the core of the EB-5 program is a clear rule: the investor must place at least $800,000 “at risk” in a new commercial enterprise. The funds must be lawfully sourced and fully committed. Borrowed funds are permitted, but only if the loan is bona fide—real, enforceable, and commercially reasonable.
Trouble arises when the lender is affiliated with the project itself.
What Is an Affiliate Loan?
An affiliate loan is one provided by a party with a financial interest in the project—such as the developer, parent company, or another related entity. While this may appear to be a helpful option for some investors, it poses significant risks.
The key issue: Would the lender offer the same terms if not for the borrower’s investment in the project? If not, USCIS could deem the loan non-bona fide. And if the loan isn’t bona fide, the investor may not meet the $800,000 capital requirement, leading to petition denial.
A Thin Line: Real Risk vs. Structural Risk
For a loan to qualify under EB-5, the investor must be personally and primarily liable. The loan must be made on standard commercial terms, by an independent party. If the project itself or a related entity provides the loan, and the arrangement exists primarily because the investor is joining the project, USCIS may determine that the investor hasn’t contributed the required $800,000 of their own capital—jeopardizing compliance with EB-5 requirements.
This creates a dangerous imbalance: the project benefits from incoming capital, while the investor bears the full immigration risk. If USCIS finds the loan arrangement improper—even years after the investment—the result may be denial of the petition and loss of capital.
Historical Lessons: When Policy Shifts
The EB-5 program has seen abrupt policy shifts before. A decade ago, USCIS rejected many petitions that used loans, claiming the funds weren’t “at risk” unless secured by the investor’s own assets. A federal court later ruled that cash is fungible and loans can qualify—provided they are bona fide and the investor is personally liable.
But that ruling did not address affiliate loans. This remains a gray area.
A Subtle but Growing Threat
Recently, some affiliate loans have been approved, even where the loan terms appear tied to participation in the project. These approvals, while encouraging to some, create a false sense of security. USCIS may allow a practice—until it doesn’t. All it takes is one loan that clearly crosses the line to prompt a denial and establish new internal standards.
That denial may shape future adjudications, potentially sweeping in pending or even previously accepted petitions with similar structures. Investors may find themselves caught in a shifting policy landscape with little recourse.
What Makes a Loan Acceptable Under EB-5 Rules
Acceptable loans are typically those made by regulated financial institutions, or by friends or family—provided they are properly documented, legally enforceable, and commercially reasonable. Importantly, the EB-5 investment itself cannot be used as collateral. The lender must not be affiliated with the project, and the loan must not be conditional upon making that investment.
Final Thoughts: Proceed with Caution
Affiliate loans may seem like a simple solution to financing challenges, but they carry complex risks. While some cases have been approved, the foundational issues remain unresolved. The longer this continues, the greater the risk that a policy shift will reshape how USCIS views these structures.
Investors denied immigration benefits not only risk losing their capital—they also lose time and opportunity. No green card. No financial return.
Before accepting financing from any entity tied to the project, investors should seek independent legal counsel. And project sponsors should be cautious about offering or facilitating these loans. Because once the precedent shifts—and history shows it will—the consequences may be swift and irreversible.
