EB-5 Source of Funds: Loan Secured by Personal Assets
A practical look at the loan-source patterns that have supported EB-5 approval, the lender-side documentation rules, and the affiliated-entity loan pause now in place industry-wide.
The triggering event
You intend to fund your EB-5 investment with the proceeds of a loan rather than from cash, sale proceeds, or a gift. The loan may be a home-equity line of credit (HELOC), a margin loan against a brokerage account, a personal loan from a non-bank lender, a margin or collateral loan against cryptocurrency, or an institutional bank loan. You may be considering whether the loan can be unsecured, what your lender's documentation will need to show, and how the post-Reform-and-Integrity-Act framework treats different lender types.
This page is written for that investor. Loan-funded EB-5 has long been permitted, but the post-RIA framework reshaped which loans are simple to document and which trigger a full lender-side source-of-funds review. The single most important practical change in the past year is the industry-wide pause on affiliated-entity loans as of summer 2025, with USCIS issuing thirty-page Notices of Intent to Deny and revoking previously approved petitions where the lender is affiliated with the regional center, the developer, or the new commercial enterprise. Other lender types continue to function with the documentation patterns described below.
We assume throughout that the loan is bona fide, that interest and repayment terms are reasonable for the lender type, and that the loan will not be repaid through funds whose source is itself in question.
What the rules say
Source of funds is anchored in INA § 203(b)(5)(L) (added by the EB-5 Reform and Integrity Act of 2022, signed March 15, 2022) and the regulations at 8 C.F.R. § 204.6(e) (capital "does not include assets acquired by unlawful means") and § 204.6(j)(3) (foreign business registration, personal and business tax returns, identity of all who participated in transfers, record of monetary judgments). The RIA removed the prior requirement that loans used for EB-5 capital be secured by collateral, allowing unsecured loans. The bona-fide-loan standard from Matter of Izummi (22 I&N Dec. 169) continues to apply: the loan must be a real loan with real obligation to repay, not a sham instrument.
For non-bank lenders, RIA § L now requires the lender to be sourced under a preponderance standard: lender's seven years of tax returns, at least two years of bank statements showing the loan funds accumulating in the normal course of business, the loan agreement with reasonable interest, the underwriting evidence, and the repayment-source documentation. The "good faith" language in Section L applies to both gifts and loans (loans must not be made to circumvent SOF limitations).
The federal courts in Zhang v. USCIS (D.C. Cir. ~2020) invalidated USCIS's "encumbered loan" capital definition and observed that "cash is cash." The practical relief lasted about two years until the RIA reinstated SOF requirements for non-bank lenders. Zhang continues to support the proposition that an investor borrowing from an institutional bank does not need to source the bank's funds. The federal courts in Battineni v. Mayorkas (D.D.C. Oct. 2, 2024) and Zhou v. Noem (D.D.C. Feb. 6, 2025) further observed that the agency's SOF inquiry is "narrow" and that an investor is not required to "trace every penny" beyond the immediate source. Those rulings narrowed USCIS's reach in particular tracing contexts, but they are not binding on adjudicators outside the parties, and USCIS continues strict scrutiny in the current adjudication environment.
The most important post-RIA development for loan-funded EB-5 is the affiliated-entity-loan pause that took hold across the industry in summer 2025. Loans from lenders affiliated with the regional center, the developer, the NCE, or the JCE are drawing thirty-page NOIDs and revocations, including on petitions previously approved. Practitioners are not currently structuring affiliated-entity loans pending clarification, and the pause is treated as effectively industry-wide as of this writing.
What you can do from here
Bank loan or HELOC (institutional lender)
The investor borrows from a U.S. or international institutional bank, including a HELOC against the investor's home, an unsecured personal loan from a bank, or a structured loan product backed by the investor's broader banking relationship.
This is the simplest loan profile. Practitioners typically rely on the bank's loan agreement, the closing or funding documents, the investor's bank statements showing receipt of the loan proceeds, and the wire records to the NCE. Under Zhang v. USCIS, the investor does not need to source the bank's funds (cash is cash for institutional lenders). The investor's own SOF (employment income, prior assets, repayment capacity) still needs to be documented, including the seven-year personal tax-return record. HELOCs require evidence of home ownership, the recorded mortgage or lien, and the line-of-credit terms. Whether a bank-loan profile is sufficient depends on the entire record and the discretion of the adjudicating officer.
Margin loan against a brokerage account
The investor holds a brokerage account (often containing stock options, restricted stock units, or appreciated securities) and takes a margin loan against the account to fund EB-5 rather than liquidating the underlying securities and triggering capital-gains tax.
Margin loans require explaining the mechanics: the brokerage account, the underlying securities (often RSUs or stock options with grant and exercise documentation), the margin-loan rationale (typically capital-gains-tax avoidance), the institutional lender (Fidelity, Charles Schwab, Interactive Brokers, Robinhood, or similar), the loan agreement, and the wire records. The grant documents, exercise records, brokerage statements, and tax-basis tracking for the underlying securities are part of the file. The capital-gains-avoidance rationale typically supports the margin-loan structure as economically rational and bona fide. Whether a margin-loan profile is sufficient depends on the entire record and the adjudicating officer.
Private (non-bank) lender loan
The investor borrows from a private individual, a family-friend lending arrangement, a private lending fund, or a non-bank financial institution that is not affiliated with the EB-5 project.
Private loans require full lender-side SOF. Practitioners typically include the lender's seven years of tax returns, at least two years of bank statements showing accumulation in the normal course of business, the loan agreement with reasonable interest, the underwriting evidence, the repayment-source documentation, and a jurisdiction compliance check (some jurisdictions forbid interest-free company loans). A typical structure is a five-year loan with no prepayment penalty and a market-rate interest. Loan structures with mismatched economics (for example, eleven-percent loan interest paired with a one-percent NCE return) are sometimes flagged, though practitioners report that this critique is legally incoherent because the loan and the NCE return are independent transactions. Whether a private-loan profile is sufficient is decided case-by-case.
Cryptocurrency-collateralized loan or sale-proceeds-of-crypto loan
The investor's wealth is held in cryptocurrency, and the EB-5 funding will come from a crypto-collateralized loan, the sale proceeds of crypto, or a margin loan against a crypto holding.
Cryptocurrency loans require comprehensive tracing. Practitioners typically document the original purchase of the crypto (exchange, private wallet, mining), pricing at acquisition, the transaction history, transfers between wallets, the sale or pledge, the lender (centralized exchange-based loan or DeFi protocol), and the tax payments. The narrative assumes the adjudicator is unfamiliar with crypto mechanics. Path-of-funds documentation is heavier than for traditional asset classes because crypto transactions are pseudonymous on-chain and require off-chain attestation. Whether a crypto-collateralized loan profile is sufficient is decided case-by-case by the adjudicating officer.
Affiliated-entity loan (currently paused)
The lender is the regional center, the developer of the JCE, the NCE itself, or another entity affiliated with the EB-5 project.
As of summer 2025, affiliated-entity loans are paused industry-wide. USCIS has issued thirty-page Notices of Intent to Deny and revocations of previously approved petitions where the lender is affiliated with the project. Practitioners are not currently structuring affiliated-entity loans pending clarification of USCIS's position. Investors who are presented with affiliated-entity loan structures by regional centers should treat the structure with substantial caution and seek independent counsel before signing. Whether affiliated-entity loans become viable again depends on USCIS guidance, litigation outcomes, and policy shifts that have not occurred as of this writing.
What to expect when
- Section S grandfathering deadline: September 30, 2026. I-526E petitions filed before this date receive continued processing of the petition and downstream I-829 even if the regional-center program expires September 30, 2027. Filings after the deadline are not protected.
- Inflation adjustment: January 1, 2027. EB-5 investment minimums adjust automatically every five years beginning January 1, 2027.
- Loan documentation timing. Practitioners typically prefer that the loan be funded, the proceeds settle in the investor's account, and the documentation be assembled before the I-526E is filed. Filing before the loan funds is risky in the current adjudication environment, where partial-investment denials without RFE are occurring.
- Lender documentation timing. For non-bank lenders, the lender's seven-year tax returns and two years of bank statements typically take weeks to assemble. Practitioners recommend completing the lender's documentation before the I-526E is filed.
- Repayment timing risk. Loans repaid quickly with different money draw scrutiny. USCIS may question whether the repayment funds were the true source of the EB-5 capital, effectively treating the loan as a conduit. Practitioners typically structure loans with terms that match the investor's actual repayment plan and source.
- Loan-application warranties. Loan-application checkboxes saying "not for investment purposes" have been treated by USCIS as misrepresentation against the lender, with the resulting funds characterized as unlawfully acquired. Practitioners review loan-application language at intake.
- Years-later RFEs. I-829 source-of-funds RFEs are now routinely reopening questions ten or more years old, including loan-structure questions. The lender's continued availability and document retention may matter years after the loan.
- Material-change risk. USCIS treats a switch in the specific funding source as a material change. Build the I-526E around the loan that will actually fund the investment.
What we tell clients
EB-5 approval rates have fallen materially over the past several adjudication cycles, and the rate at which USCIS issues Requests for Evidence, Notices of Intent to Deny, and direct denials has risen sharply. The June 2025 reinstitution of the CISNA/EDLO directive (instructing officers to deny rather than RFE in close cases) and the routine pairing of I-829 denials with Notices to Appear in removal proceedings are reshaping how EB-5 practice is done. Profiles that we and other firms saw approved without challenge two or three years ago are now drawing aggressive scrutiny, particularly on loan-structure source-of-funds tracing where USCIS now expects full lender documentation at the petition stage and where affiliated-entity loans have been effectively paused industry-wide since summer 2025, and some are being denied outright on records that, on their face, look as strong as records that previously cleared. Officers also vary considerably in how they apply discretionary judgments under the post-RIA framework. This climate is not unique to investors funding EB-5 with loans, but it is real, and it informs how we counsel clients before, during, and after filing.
This page describes patterns we have seen across many EB-5 source-of-funds matters. It is general information about how this type of scenario is typically analyzed, not a prediction about any specific case and not a representation that meeting any particular evidence pattern will result in approval. EB-5 outcomes turn on the entire record, the strength of the legal and factual arguments, the current adjudication climate, and the discretion of the adjudicating officer.
Frequently Asked Questions
Ready to Get Started?
Tell us about your immigration needs and we'll be in touch to discuss how we can help.
Immigration counsel to Fortune 500 employers at a national firm · Adjudicated 12,000+ visas at the U.S. Consulate, Mexico · Working in U.S. immigration since 2008
Featured in Newsweek, Condé Nast Traveler, Daily Mail