EB-5 program extended through SeptemberDecember 18, 2015 – In The News
Scott E. Bettridge and Rogelio "Roy" J. Carrasquillo were featured in the Real Estate Finance & Investment article, “EB-5 program extended through September.” Full text can be found in the December 18, 2015, issue, but a synopsis is below.
The EB-5 immigration program will take a back seat as congress votes to extend legislation of the popular program until later this year.
“We are in a limbo. None of the changes that were talked about, including fraud prevention, higher filing fees, minimum investment amounts and designated [targeted employment area] will be changed,” said Fox Rothschild’s Scott Bettridge. “But I think it’s a good thing in terms of having the ability and time to get a permanent bill in place over the next two months.”
The industry is expected to see what the changes will be by the summer, Bettridge added. “Our advice for developers with good projects out there who were waiting for clarity on EB-5 is to take advantage of the stability in the market and move ahead with [their] I-526 [filings].”
There may be additional fees associated with the revised program such as fraud protection, additional disclosure, raising the TEA to $800,000 and even talks of increasing the I-526 filing cost from $1,500 to $10,000.
“You have to file and have your I-526 approved before enactment [of the new EB-5 program] to continue working under the old rules,” Betteridge clarified. “There will be very little grandfathering.”
Fox Rothschild’s Roy Carrasquillo continues to view EB-5 as a viable source of capital despite criticisms over the program such as investment-related fraud and poorly defined TEA sites.
“Where [EB-5] falls in the capital stack, usually as mezzanine [debt] or preferred equity, it becomes cheaper capital for developers and I think it’s here to stay,” Carrasquillo concluded.