Part 4 of CanAm’s Series on EB-5 Adjudication Trends with Jen Hermansky and Pete Calabrese
Beyond Cash and Loans: New Avenues for EB-5 Funding
For many EB-5 investors—particularly those already living and working in the United States—the capital for their investment isn’t always sitting in a single account. It may be tied up in real estate, a business, or long-term retirement savings.
That’s why the final discussion in our EB-5 adjudication trends series between Greenberg Traurig’s Jen Hermansky and CanAm Investor Services CEO Pete Calabrese explored a question gaining momentum among U.S.-based investors:
“Can I use funds from a self-directed IRA for my EB-5 investment?”
The short answer: yes, but with careful structuring.
“Self-directed IRAs can absolutely work,” Hermansky explained. “But the setup must be done correctly so that the investment complies with both U.S. tax law and EB-5 immigration rules.”
What Is a Self-Directed IRA?
A self-directed IRA (SDIRA) allows individuals to invest their retirement savings in a broader range of assets beyond traditional stocks and bonds—including real estate, private equity, and, in some cases, EB-5 investments.
In an SDIRA, a custodian holds the assets on behalf of the account owner, ensuring compliance with IRS rules that prohibit self-dealing or certain related-party transactions. But unlike a standard IRA, the investor—not the custodian—chooses the investment.
“It’s called ‘self-directed’ for a reason,” said Hermansky. “The investor decides where the funds go. The custodian simply administers the account to ensure it stays compliant with retirement account laws.”
How EB-5 Fits Into the Picture
For EB-5 purposes, the key issue is ownership and control. USCIS requires that the investor’s funds be personally at risk in the new commercial enterprise (NCE). With a self-directed IRA, the investment technically flows from the retirement account—but for the benefit of the individual investor.
“The underlying capital still belongs to the investor,” Hermansky explained. “Even though it’s held by a custodian, it’s clearly for the investor’s benefit and subject to the same risks and rewards.”
That makes the SDIRA structure compatible with EB-5 rules, as long as:
- The custodian agrees to participate in the subscription process on behalf of the investor.
- The project’s offering documents (such as the limited partnership or LLC agreements) accommodate that structure.
- Tax reporting and documentation are handled properly.
Lessons from Other EB-5 Scenarios
Hermansky compared the SDIRA structure to other scenarios that required USCIS education in the past.
“This is similar to when we had to explain cases involving minors or students as EB-5 investors,” she said. “There was a learning curve, but once USCIS understood that a custodian could hold funds on behalf of a minor, approvals followed.”
The same principle applies here: the custodian holds the account, but the investor maintains full beneficial ownership and decision-making authority.
Still, she cautioned, projects and attorneys must ensure that every agreement clearly reflects that control. If the documents suggest that the custodian is the investor—or that the funds aren’t truly the investor’s—USCIS could question eligibility.
The Project’s Role: Be Ready for the Structure
Not every EB-5 project or regional center is prepared to handle an SDIRA investment.
“The regional center and the NCE need to know exactly what this structure involves,” Calabrese explained. “That means the subscription agreement, the tax forms, and the wiring instructions must all align with the custodian’s process.”
He added that CanAm’s compliance-driven approach has allowed it to accommodate a range of lawful funding structures—including SDIRAs—by working closely with both investors and custodians early in the process.
“The investor, the custodian, and the project need to be in sync,” Calabrese said. “If everyone is aligned from day one, it’s a smooth process.”
USCIS Perspective: A Matter of Education and Clarity
As with many funding innovations, USCIS has not yet published formal policy guidance specifically addressing self-directed IRAs in EB-5. That means adjudicators may initially approach these cases cautiously.
Hermansky noted that, as with other novel arrangements, the key is clear explanation and thorough documentation.
“If USCIS sees exactly how the investment works, how the custodian functions, and how the investor retains control, the case can meet all of the EB-5 requirements,” she said. “The burden is on us to educate the agency with a clean, well-structured filing.”
Preparation Is Still the Common Thread
Across every topic covered in this series—installment funding, loans, and now SDIRAs—the recurring message is the same: plan ahead and prepare thoroughly.
As Calabrese summarized:
“The urgency to file before the 2026 deadline is real, but the petition has to be approvable when filed. Taking an extra month to prepare is better than spending a year fighting a denial.”
Hermansky echoed that sentiment. “With the RIA, USCIS now has the discretion to deny cases outright without even issuing a Request for Evidence,” she said. “You may not get a second chance. So get it right the first time.”
That means that:
- Confirming your full funding plan—whether cash, loan, or SDIRA—before filing.
- Working closely with your regional center and legal counsel to align documentation.
- Proactively updating USCIS if additional funds or documents are submitted later.
‘Measure Twice, File Once’
The closing message from both experts is one every investor should remember: patience and precision beat speed.
“Measure twice, cut once,” Hermansky advised. “That philosophy applies perfectly to EB-5. Prepare your full source of funds, double-check every document, and file only when your case is truly ready.”
Calabrese agreed. “Predictability comes from preparation,” he said. “When you combine experienced counsel, a transparent regional center, and a compliant funding plan, you give yourself the best chance for approval.”
A Strong Finish—and a Clear Message
As the EB-5 Program continues to evolve under the Reform and Integrity Act, investors have more tools—and more responsibility—than ever before. Whether funding through traditional capital, loans, or retirement assets, the same principles apply:
- Be transparent.
- Be compliant.
- Be ready.
That’s how investors can turn complexity into confidence—and move one step closer to achieving their EB-5 goals.
