As foreign capital continues to flow into U.S. real estate development, the EB-5 immigrant investor program remains one of the more nuanced financing tools available to developers and investors alike. Yet despite its 30-plus-year history, the program is still widely misunderstood, by developers who assume it offers cheap capital, and by investors who may not fully grasp where their money sits in the capital stack. For Thomas Lee, President and CEO of Toma Regional Center LLC, those misunderstandings have shaped his approach since entering the EB-5 space in 2010.
The conventional use of EB-5 capital in real estate development places investor funds in a subordinated position, behind senior lenders, in mezzanine debt or preferred equity slots. That structure has worked for many deals, but it carries meaningful risk when projects run into trouble. If construction stalls or a project fails, the senior bank recovers its funds first, and EB-5 investors, sitting lower in the capital stack, can be wiped out entirely. Lee says this has happened “countless times during COVID and just general projects that didn’t succeed.”
Rather than accept that structure as standard, Lee spent years developing an alternative. The result is a co-lending model in which EB-5 capital participates alongside a direct lender in the senior position, not behind it. The direct lender manages real estate underwriting and construction oversight, while Toma handles the immigration compliance side. Because investors sit in a first-lien position, their capital is protected even if the project encounters difficulties.
The current project applying this structure is Haven Residences in Rancho Cucamonga, California, a 248-unit multifamily development spread across 11 buildings, with retail space and amenities. The project is more than 80% complete, with phased openings expected to begin shortly and full completion anticipated later in 2026. Toma’s EB-5 investors are participating in the senior loan position alongside a Southern California-based private lender that has completed over $4 billion in transactions over the past 16 to 17 years.
With a focus area spanning from San Diego to Ventura County, Lee and his team encounter a steady volume of development opportunities. The filtering process prioritizes capital preservation over returns.
“The first thing we look at is the capital stack, where the investment needs to be placed,” he says. “We’re not interested in higher returns. We’re interested in making sure the capital is preserved and secure.” From there, evaluation moves to sponsor experience, liquidity, contractor relationships, and the underlying economics, debt levels, cash flow projections, and the project’s ability to refinance or repay investors at stabilization.
Working alongside direct lenders adds another layer of vetting. Because the co-lender is also committing its own investors’ capital, both parties share exposure to the same risks. Lee also builds in substantial job creation buffers, a critical consideration for EB-5 compliance. Even if a project stalls partway through construction, the buffer ensures investors’ immigration cases remain intact. “At that point, we’re just concerned with the valuation so that investors can get their money back,” Lee explains. “And that’s where being in a senior position is very vital.”
Despite growing awareness of the EB-5 program among developers, Lee spends considerable time correcting two persistent misunderstandings.
The first is cost. Developers often assume EB-5 capital comes at a steep discount to market rates. In practice, Lee says, the cost is comparable to other financing sources. “Sure, you could maybe get a little cheaper than the average market, but it’s not as discounted as developers would think.”
The second concerns investor motivation. Some developers assume investors care only about obtaining a green card and are indifferent to financial outcomes. Lee pushes back on this directly: investors need both immigration approval and return of their capital. That distinction shapes how Toma structures its deals and is one Lee believes the broader industry has been slow to internalize.
The EB-5 Reform and Integrity Act of 2022 introduced audit requirements, fund administrator mandates, and additional reporting obligations to USCIS, changes that Lee views as a net positive for the industry.
“Before the 2022 RIA, EB-5 was kind of the Wild Wild West,” he says. The new rules give USCIS better visibility into how projects use investor funds, creating stronger accountability across the regional center ecosystem. It is worth noting that other regional centers may structure deals differently, and not all have adopted the co-lending approach Toma uses.
On the visa backlog question, historically a concern for investors from high-demand countries, Lee notes that every country is currently current, meaning no applicants face nationality-based wait times. That said, USCIS processing times vary, and the program’s extension through September 2027 comes with a significant near-term deadline.
One of the most pressing issues facing prospective EB-5 investors in 2026 is the September 30 grandfathering date. After that point, applicants may not be eligible to file under the current rules, even though the program itself continues through 2027.
Lee advises investors to work with qualified immigration attorneys and ensure they invest in projects that have already submitted their I-956F, the USCIS form that authorizes a specific EB-5 offering. As the deadline approaches, he expects a rush of projects seeking approval without adequate documentation. “You’re going to see a flurry of projects coming in just trying to get their projects submitted without maybe being properly documented or having all the pieces in place.”
For investors evaluating options ahead of that date, Lee points to the Haven Residences project as one that has already cleared those hurdles, with the I-956F submitted, jobs created, construction nearing completion, and capital secured in a senior lending position.
Beyond program-specific dynamics, Lee is watching the same macroeconomic pressures affecting the broader construction lending market, interest rates, inflation, and refinancing conditions.
Many EB-5-funded projects will need to refinance to repay investors, meaning rate movements directly affect exit timelines. If rates decline, projects are better positioned to refinance and return capital. Rising construction costs remain the larger unknown. Lee’s response to that uncertainty is consistent with Toma’s overall approach: keep leverage low, ensure financing is fully in place before committing, and avoid deals where EB-5 capital is the only thing holding a project together.
“We make sure that if there’s no EB-5 in the deal, the project’s not going to be stressed,” Lee says. “That’s why we haven’t had too many issues with projects being completed.”
It is a measured approach in a corner of the market that has not always been known for caution, and one that reflects how the EB-5 industry is gradually adopting stronger investor protections, deal by deal.
About the Expert: Thomas Lee is the President and CEO of Toma Regional Center LLC, an EB-5 regional center focused on multifamily and real estate development projects in Southern California, operating from San Diego to Ventura County. He has been active in the EB-5 space since 2010.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
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