While loans in the U.S. are still tough to come by, more and more real estate developers are relying on the EB-5 Immigrant Investor Program to help finance projects. The program, developed in 1990, has seen a steady increase in investors and utilisers over the past decade – and a markedly increasing number of applicants over the past 5 years.
Because the program requires either a $500,000 or $1M investment from an individual, the money tends to filter into real estate developments, as those projects require large amounts of money. The investments must also create or preserve 10 U.S. jobs within two years. As some projects can utilize the investments of 50-100 individuals, the impact of the program can be great.
“My perspective is that there has been a lot of buzz around it largely because the conventional (U.S.) financing markets have been difficult,” explained Angelo Stambules, senior VP of capital markets at Hunter Hotels.
The program reached its highest levels of support during fiscal year 2012, with 7,641 applications – more than double the prior year’s list.
A large portion of the program’s participants are Asian, according to the U.S. Department of State. Some 80.1% of the applicants in 2012 were Chinese. As Chinese concerns over their homeland’s economy, way of life and government continue to rise, the number of incoming applicants is expected to climb in 2013.
And where there’s money, there’s construction. Marty Cllins, CEO of Gatehouse Capital, utilized EB-5 funding in the development of the W Hollywood Hotel and Residences in California. He told the press he would be open to using more eb-5 funding in the future.
“We’re looking now at a number of projects,” that could benefit from the use of EB-5 funding, he explained.
U.S. Immigration Fund is also continuing to develop projects across South Florida and the United States in order to benefit those searching for U.S. citizenship as well as the American economy. Projects include Water Pointe, Harbourside Place (in Jupiter, Florida) and The Charles, in New York City, among others.