FOR DEVELOPERS

1. Executive Summary

For real estate developers, EB-5 is not merely a visa program; it is a highly competitive Alternative Financing Tool.

Established by the U.S. Congress in 1990 to stimulate the economy, the program allows foreign high-net-worth individuals to invest capital into U.S. development projects. In simple terms: It is low-cost, long-term, non-recourse capital provided to your project in exchange for permanent U.S. residency for the investor.

2. Why Developers Need EB-5 Now (The Value Proposition)

In the current environment of high interest rates and tightening bank credit, EB-5 is the most effective tool to optimize your Capital Stack:

Significantly Lower Cost of Capital:

Traditional Mezzanine Debt or Preferred Equity currently costs 12% - 15%+.

EB-5 capital typically carries an all-in cost of 6% - 8%. This drastically lowers your Weighted Average Cost of Capital (WACC) and boosts your project's net profitability.

Filling the Financing Gap:

When senior lenders cap their Loan-to-Cost (LTC) at 50-60% and you want to preserve your own equity, EB-5 perfectly fills the 20-30% funding gap.

Bank-Friendly Structure:

EB-5 capital is generally structured as subordinate debt. Senior lenders often view it as "quasi-equity," which makes securing your primary construction loan easier.

Non-Recourse to Developer:

EB-5 loans can often be structured as non-recourse to the developer, secured primarily by the project collateral (second lien).

3. Where it Fits in Your Capital Stack

Think of your project funding as a three-layer structure. EB-5 occupies the critical middle layer:

Top Layer (50-60%): Senior Bank Loan

Role: Primary construction funding.

Middle Layer (20-30%): EB-5 Capital (The "Missing Middle")

Role: Replaces expensive Mezzanine Debt.

Benefit: Fixed, low-interest rate. Long maturity (typically 5-7 years).

Bottom Layer (15-20%): Developer Equity

Role: Your "skin in the game."

Benefit: By using EB-5, you achieve higher leverage on your own cash, significantly increasing your Internal Rate of Return (IRR).

4. The Requirements (Your Obligations)

To access this capital, the project must meet specific federal criteria. AACC manages this compliance for you:

Job Creation: The project must create at least 10 full-time jobs for every $800,000 of EB-5 investment.

Note: We use economic modeling to count construction expenditures as job creation. Standard construction projects easily meet this requirement.

Targeted Employment Area (TEA): Ideally, the project should be in a Rural Area or a High Unemployment Area.

AACC Advantage: We specialize in identifying these zones. Projects in these areas get "Visa Set-Asides," making them highly attractive to investors and ensuring faster funding for you.

"At Risk" Requirement: Funds must be fully invested in the project. While you cannot guarantee a "return on investment," you can provide a Completion Guarantee to the Regional Center.