Peachtree Group supports strengthening the integrity of the EB-5 program while ensuring new regulations reflect how projects are financed in practice. In our comments to DHS, we addressed the proposed treatment of bridge financing and recommended clear, workable standards that preserve a widely used financing tool while supporting transparency and accountability.
You've probably already heard: DHS is proposing a rule that would deny job-creation credit for any jobs tied to bridge or interim financing, effectively making that financing worthless for meeting the investment's job creation requirement. It's one of the more consequential proposals in the 360 pages of proposed new rules. EB5Investors.com did the industry a favor by pulling together reactions from across the space, including PRXY Co.'s own comment on the rule. DHS's concern is understandable on its face: if you can't trace investor dollars to the jobs they supposedly created, the "but-for" nexus gets murky. Broker-dealer Marko Issever shares that instinct, but draws a narrower line. His concern is with projects where job creation gets treated as an afterthought, bolted onto EB-5 capital after the fact. As he put it, "That situation is fundamentally different from a project that incorporates EB‑5 capital into its financing plan from the outset." Civitas Capital Group made the same point from the sponsor's side: bridge and interim financing are "standard, legitimate tools in commercial real estate and infrastructure finance," not some EB-5-specific workaround. Peachtree Group went further, arguing the rule would "penalize the exact structure USCIS requires sponsors to demonstrate to obtain project approval." Invest In the USA (IIUSA) put an even sharper point on that contradiction, calling it "reversing more than a decade of settled USCIS policy and practice." US Immigration Fund challenged the "but-for" logic head-on: jobs are created by the project as a whole, not by matching specific dollars to specific jobs. Finally, Intellex Capital LLC's warning should resonate most with regulators - push legitimate sponsors out of bridge financing and you don't eliminate the practice, you push EB-5 "toward becoming a financing source of last resort, where fraud concentrates." Our own comment focused on the fix rather than the fight: an independent, third-party that verifies, traces, and documents every movement of bridge capital gives DHS the transactional-level nexus it's asking for, without forcing sponsors to abandon a routine financing tool. Oversight, not elimination. Check out the article in the comments below. If you worked on a comment letter for this NPRM, what was your position on the issue? Curious where the industry lands as this comment period plays out.