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Is Quick Repayment Realistic in a High Mortgage Rate Environment?

When the EB-5 Reform and Integrity Act of 2022 was passed, many prospective EB-5 investors were elated about the possibility of faster capital repayments. Prior to the Reform and Integrity Act (RIA), EB-5 investors needed to sustain their investment to be at-risk throughout the conditional residency period. In more recent years, the conditional residency would begin around year 2 or 3, so it was rare to see repayment timelines shorter than 5 years when factoring in the 2 year conditional residency period. The RIA states that EB-5 investors are now required to sustain their investment to be at-risk for a minimum of 2 years.

Given that regional centers are excellent at marketing and packaging their offerings, some began to adverstise 2 and 3 year terms in hopes of alluring investors. However, most of these opportunities have multiple 1-year extensions and will likely be exercised. The reality is that the ability to refinance or sell to repay EB-5 capital is heavily dependent upon movement in interest rates. In this video, we’ll use metrics to explain how a 2 or 3 year repayment of EB-5 investments is unlikely unless interest rates drop significantly over the next few years.