EB-5 February 15th Update: What Investors can Expect for the Future of EB-5

As part of the agreement by Congress and the president to end the government funding stalemate, the EB-5 program will be authorized through September 30, 2019. Many may be aware that over the past few months, Iowa Rep. Steve King proposed to terminate the EB-5 program. However, his bill garnered zero support, illuminating how lawmakers view the future of EB-5.

EB-5 Reauthorization and Political Outlook

Ron Klein, partner at Holland & Knight and member of the firm’s Public Policy & Regulation Group, said, “Separate from the appropriations bills, there is new legislation being drafted, which includes visa relief, an increase of the investment amount, and other reform provisions.” He continued, “Due to the new change of leaders in the house and the senate, who are expressing a more favorable view of the EB-5 program, we believe there is a better opportunity to pass legislation this year. ”

SEE IF YOU QUALIFY FOR EB-5 NOW

Status of the EB-5 Program Following the Government Shutdown

Between the government shutdown and the temporary reopening, a few things have changed for EB-5. EB-5 regional centers have not been terminated, and petition data for Q3 FY2018 remains unpublished. The only change during the defined timeframe is the U.S. District Court ruling, which removes petition denials on the basis of investing loan proceeds not secured by the individual’s own assets.

For years, the US Citizenship and Immigration Services (USCIS) has challenged EB-5 petitions where funds originated from a property loan, where 100% of the property collateral was not fully owned by the investor. Property ownership has been particularly scrutinized by USCIS in this regard, leading to illogical situations, one being where an investor owning part of the property collateral was less valid than an investor owning none of the property collateral at all. This ruling follows the November 30, 2018, court-approved EB-5 class-action lawsuit, which also challenged USCIS’s denials based on cash vs. indebtedness. This decision is an encouraging advantage for investors interested in the EB-5 program.

U.S. Immigration Fund (USIF) will continue to provide informed updates as the reauthorization of the program is announced. With the positive progress seen since the shutdown and reopening of the federal government, optimism is high for the future of the EB-5 program.