Assisted living facilities, especially for the senior population, are growing rapidly since the over 65 population is the largest it’s ever been in the United States. The need for housing solutions for this population is greater now than ever. EB-5 investors realize that it’s the perfect solution to meet their EB-5 investment requirements: create jobs, and invest $1M. To gain approval of the I-829 petition, investors must maintain the jobs they create for a period of at least two years. Since skilled nurses are required in assisted living communities, this investment presents the perfect opportunity for an EB-5 investor to meet the requirement to create a minimum of 10 full-time jobs for US citizens.
EB-5 visas offer the investor the ideal environment to gain citizenship, but it’s also in the assisted living facility’s best interest to work with an EB-5 investor. The great thing about EB-5 is that USCIS allows investors to use funds as part of the initial capital stack, or when using bridge loans. EB-5 funds can be used to repay those higher-cost loans, according to the COO of Omega. Plus, since most investors are looking to obtain an EB-5 green card, they typically accept low 1-2% interest rates, saving assisted living communities millions of dollars.
The Tax Reform Act of 1986 enabled Low-Income Housing Tax Credits (LIHTCs), a federal subsidy, to finance the development of low-income housing. It allows any taxpayer who is a partner or partnership of the owner of a project to subsidize either 30% or 70% of eligible costs. The low-income tax credit allows the taxpayer to pay the funds back over a decade. Meanwhile, it funds the construction of their projects right away.
LIHTCs increase the value of investments in the construction of low-income housing project rentals for families and seniors. Once a developer is allocated tax credits by a state agency, the developer can sell the tax credits to an investor by entering into a limited partnership or LLC with them. The capital raised by the sale of these tax credits can reduce the amount of equity that a developer would have to obtain through loans. Additionally, when an investor acquires the LIHTC, he or she is able to allocate the depreciation of the buildings owned by the entity, which is tax deductible, based on the investor’s equity participation in the entity.
If you are looking for a meaningful and promising industry to make your EB-5 investment in, now is the time to retain BMK LLP as your trusted EB-5 investment attorneys. Our team has over 20 years of experience leading investors to success through the EB-5 visa process.