On July 2, 2026, the Department of Homeland Security (DHS) published a Notice of Proposed Rulemaking (NPRM) titled, “EB-5 Reform and Integrity Act of 2022; Ensuring the Integrity of the EB-5 Program; Automatic Revocation of Petitions for Immigrant Classification.”
This is the overarching EB-5 proposed rule that theoretically fully and finally implements the EB-5 Reform and Integrity Act of 2022 (“RIA”).
There is a lot in the 348-page NPRM, but importantly, the proposed rule demonstrates that the RIA has established a foundation for the integrity and success of the EB-5 Program.
Over the coming weeks, immigration and securities lawyers, along with regional center operators, broker-dealers, and investors themselves, will be pouring over the proposed rule. While there will be substantive and technical matters warranting comment that stakeholders will want to see changed in the final rule, this regulatory development shows the EB-5 Program is on more solid footing than ever.
A Focus on Bridge Financing and Job Creation
One of the proposed changes that has caused concern among industry stakeholders is related to the use of “bridge financing” and job creation in EB-5 projects.
Why is bridge financing important for project development?
Project financing timelines rarely align exactly with construction timelines.
To alleviate the challenges caused by financing delays, developers and project financiers commonly deploy bridge financing as a temporary measure to begin construction and keep projects on track; falling too far off the construction timeline can be catastrophic.
How does bridge financing work with EB-5?
In practice, bridge financing generally involves a short-term loan to get a project started while the ultimate capital structure is finalized.
Under the current rules, a new commercial enterprise (NCE) may take credit for all jobs created by a project even where EB-5 capital replaced bridge financing so long as the project previously contemplated the use of EB-5 capital and that the bridge financing was short term—generally a term of three years or less (USCIS Policy Manual, Volume 6, Part G, Chapter 2 (Comprehensive Business Plan), “Bridge Financing” and Matter of Izummi, 22 I&N Dec. 169 (Assoc. Comm’r 1998)).
Developers often obtain short-term financing and repay that bridge loan with the EB-5 capital, once raised, because it takes a substantial amount of time to organize an EB-5 offering and to gather investors to meet the capital raise requirements.
What is the proposed change?
DHS proposes that jobs attributable to bridge financing repaid with EB-5 capital may not be claimed as jobs created by that EB-5 investment (Proposed 8 CFR 204.407(e)(1) (“Jobs attributable to any financing repaid with EB-5 investment capital may not be claimed as jobs created by such EB-5 investment capital”).
It appears that this change would affect projects prospectively and is not intended to be retroactively applied.
According to the proposed change, jobs would only begin to be counted once EB-5 capital is actually deployed to the project, which could happen somewhat late in the project’s development.
The agency’s reasoning in making this proposed change is that EB-5 capital should be the main driver of job creation, and that the use of bridge financing breaks the connection between EB-5 capital and the underlying job creation.
However, this view fails to consider that bridge financing is frequently a critical step necessary for developers to move forward with construction while EB-5 capital is raised and deployed.
“From my time with the USCIS Immigrant Investor Program Office, which administers the EB-5 program, adjudicators were often skeptical of EB-5 capital being used to replace bridge financing, especially where projects were complete or nearly complete,” said Andrew Diroll-Black, Chief Compliance Officer of American Lending Center and formerly the acting Division Chief for the Immigrant Investor Program Office’s Compliance Division.
“But this proposed rule change is a bridge too far—pardon the pun. It would have massive effects on how projects are sourced and developed within the EB-5 program and I’m not sure the Agency has really thought about the consequences of this change.”
Challenges Posed by the Proposed Change
This change would create challenges and uncertainty for a number of EB-5 projects.
It also will be important to ensure that any regulatory changes do not impact active projects, as investors will need to file I-526Es and I-829s associated with approved projects employing bridge financing.
First, the rule would significantly reduce the number of jobs that could be credited to an NCE that used bridge financing. Accordingly, if the job creation tied to bridge financing is taken out of the equation, then certain projects may no longer qualify for EB-5 investment and may never get done.
Many EB-5 projects have development timelines of two to three years or longer. Depending on the size of the EB-5 capital raise, it could take a year or more to sign investors to pay off the bridge loan. This could reduce the number of jobs creditable to the NCE by half or more, since projects frequently have more job-creating activity in the early stages of development.
Second, it would be more difficult to provide credible economic analyses predicting job creation due to the uncertainty of when, exactly, the EB-5 capital will be contributed to the project. The process of recruiting investors, obtaining and documenting their source of funds, and transferring those funds to a project is complex and subject to delays and contingencies.
How will this impact EB-5 deals?
Avoiding the use of bridge financing would require NCEs and developers to wait for Regional Centers to raise and deploy EB-5 capital before breaking ground. This is unrealistic when considering the typical deal development and construction completion lifecycles.
These delays would likely bring increased costs and create other development exigencies, not to mention a delay to any significant job creating activities.
It would also mean that EB-5 capital raises for such projects would be greatly reduced. Fewer creditable jobs for investors means fewer investors, which means less EB-5 capital available to projects.
All in all, this would have a chilling effect on the industry and hinder development and job creation—the foundational basis of the EB-5 Program.
Effect on Good Faith Investor Protections
Many of those who are seeking to take advantage of the good faith investor protections in the RIA are trying to meet eligibility requirements while in their conditional permanent residence period and need to provide evidence of job creation when they file to remove conditions on their permanent resident status (Form I-829).
To maintain their eligibility, EB-5 investors can seek out other investment opportunities, known as “Rescue Projects” (See: EB-5 Projects to the Rescue: A Safety Net for Investors).
Rescue Projects involve NCEs organized to help good-faith investors who have been stuck in bad projects and are at risk of losing their immigration status or eligibility for permanent residence due to lack of expected job creation or other issues (See INA § 203(b)(5)(M)).
Rescue Projects can include projects in active development that can show job creation immediately. These types of projects have likely used bridge financing to begin development, with a plan to obtain EB-5 capital in the near future.
Barring job creation based on bridge financing would make it much harder for investors in these circumstances to meet eligibility requirements and would make the good faith investor protections less impactful. Those investors would likely have to seek other EB-5 projects that may be riskier and not be able to show job creation in the timeframes needed.
Commenting on the Proposed Rule
It is important to note that DHS/USCIS has specifically requested in the NPRM comments on the bridge financing proposed change.
This makes it critical for industry stakeholders to submit comments including tangible feedback regarding the actual use and value of bridge financing in EB-5 project development. There is a 60-day period from July 2, the date of publication, for submission of comments.
Additionally, DHS acknowledges in the proposed rule that its concerns about bridge financing are somewhat dated: “Form I-956F project applications filed after enactment of the RIA generally present more credible and realistic uses of bridge financing, which in turn present more credible projects that have a higher likelihood of success.”
DHS contemplates that the current bridge financing rule could continue but with new limitations, such as codifying the term of bridge financing for 12 to 36 months or limiting the amount of EB-5 capital that can be used to replace bridge financing.
Either of these adjustments would ameliorate the difficulties posed by the proposal to outright ban job creation tied to bridge financing, as the EB-5 industry has, for the most part, already adopted these limitations.
How can EB-5 stakeholders respond?
Stakeholders concerned about the proposed change should submit comments explaining how eliminating job creation tied to bridge financing altogether would essentially eliminate the use of bridge financing for EB-5 projects thereby hindering development. And stakeholders should also provide feedback on the other possible changes outlined in the NPRM.
Final Thoughts
In an otherwise largely straightforward NPRM implementing the RIA, the proposed rule to eliminate job creation based on bridge financing would have a significant chilling effect on the EB-5 industry.
The ultimate result would be that there would be less EB-5 investment and less job creation over time.
Based on these concerns, the proposed rule should be rolled back, or DHS should adopt some version of the limitations it discusses in the NPRM.
