Immigrant visa program funds wide range of US projects

EB-5 funding is playing a major role in many large-scale real estate development projects in the US mainly because it is a source of less costly financing.

"New York City residential rental construction requires very substantial amounts of funding above the amount that (the) banks will loan. Without EB-5 funding, owners would be required to find other sources of capital at substantially higher cost than the EB-5 program. That higher cost would not be justified by the returns generated by NYC residential rental construction," Gary M. Rosenberg, a New York real estate attorney with Rosenberg & Estis PC, said in an e-mail.

Hudson Yards, a $20 billion Related Cos development on Manhattan's far West Side and New York's biggest real-estate project, is depending on financing being provided by Chinese investors through the EB-5 program. Related said it has raised $600 million from 1,200 Chinese families to build the foundation for the project's three skyscrapers, the Wall Street Jouranl reported.

San Francisco's Golden Gate Global is recognized as one of the leading EB-5 regional centers in the US. One of the company's most prominent EB-5 programs is at the San Francisco Shipyard development. As the city's newest waterfront community, the project will create 12,000 new homes, two major retail centers, commercial office space and parkland.

"EB-5 funding is a growing, but still a relatively small part of overall funding for real estate development here," Golden Gate CEO Ginny Fang said.

In addition to project approval, EB-5 investors must meet US government requirements to qualify. "The US government has the right to reject an applicant. That's why we require a strict background and national security check," said Raymond. In the Vermont program, Raymond said 10 of 1,200 applicants have been denied. "Most of the denials were due to fraudulent information on the application or a proof of funds issue," he said.