EB5 VISA news

A Landmark “Win” for EB-5 Investors, Allows Use of Unsecured Loans, Oct 27, 2020!

After a 5-year dispute between USCIS and EB-5 Investors, a three-judge panel in D.C. Circuit court issued a decision on 10/27/2020, which allows use of unsecured loans to fund EB-5 investments. 

In the last five-years, USCIS had disputed validity of source of funds where all or part the investment included an unsecured loan, resulting in denial of those Investors’ EB-5 Petitions. 

However, today’s statement by Judge Gregory G. Katsas rings in a new era for EB-5 Investors: 

“The buyer’s source of cash — whether paycheck, gift, or loan — makes no legal or practical difference.” 

Therefore loan proceeds now qualify as cash rather than debt.

Since 2015, USCIS has been steadfast in its position, which misinterpreted unsecured loans as indebtedness, rather than cash, forming its basis for denying numerous EB-5 Petitions.  However, a Chinese and a Japanese Investor (Huashan Zhang & Masayuki Hagiwara) sued USCIS in 2015, after receiving denials based on use of unsecured loans.

In 2018 a D.C. Federal decision ruled in favor of Investors and granted them a Class-Certification.  Said favorable ruling was again challenged by USCIS, and today’s historic decision solidified the 2018 D.C. Federal Court Decision in favor of Investors.

USCIS had argued that use of unsecured loans is akin to a third-party “buying” a Green Card for another Investor.  The judges today rejected USCIS’ arguments and most remarkable was Judge Katsas’ remarks, stating that:

“As far as the enterprise is concerned, whether or how the investor’s loan was secured makes no difference; it can deploy the cash either way, and it faces no exposure if the investor defaults on any obligation to a third-party lender.” 

In other words, a loan, secured or not, is cash, which can be used by the EB-5 Project, regardless of how it was procuredSee Huashan Zhang v. United States Citizenship and Immigration Services, No. 19-5021 (D.C. Cir. 2020)


Today’s Decision prevents USCIS from denying EB-5 Petitions on the basis of how the loan was obtained (secured or not).  Up until now, USCIS had only allowed use of loans secured by Investor’s own assets (such as a mortgage on a property owned personally by the Investor)

But today’s Decision opens the door to many other avenues of funding for potential Investors as now they have the ability to use unsecured loans as their source of funds.

Moreover, this Decision is a welcome-news to the United States, and EB-5 Regional Centers which should expect an increase in the number of applicants given today’s Decision.

It is important to note that Investors are still not allowed to secure a loan on the assets being used for their EB-5 project, and today’s decision has not changed that.

Given the complexity of this area of law we highly recommend consulting a qualified EB-5 Attorney prior to making any decisions.

Disclaimer: The content in this newsletter should not be construed as legal advice.  We encourage you to contact an Immigration Attorney for any immigration law questions you may have. Furthermore, the content herein is the work product of LAWMAKS and should not be copied or redistributed in any form or fashion by any individual or entity.