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Congress Revives EB-5 Visa Program — With Reforms


UPDATE, MARCH 11, 11:05 A.M. ET: The omnibus appropriations bill passed Thursday night including the EB-5 Reform and Integrity Act of 2022. With it, EB-5 regional centers have been reauthorized for the next five years and the program can recommence.

Congress stands to renew a program used as a source of capital by commercial real estate developers for decades as part of the massive omnibus spending bill that it needs to pass by the end of the day Friday to avoid a federal government shutdown. 

After allowing it to lapse in mid-2021, Congress is preparing to revive the EB-5 visa program, which awards permanent residence for non-U.S. citizens who invest a specified amount in distressed places in the United States, particularly high-unemployment urban areas or blighted rural areas, known as Targeted Employment Areas. The program is slated for renewal through September 2027.

Reforms are planned as part of the renewal, addressing various longstanding issues with EB-5. One of the main changes, according to the text of the bill now before the House of Representatives, is that the minimum investment will be $800K, up from $500K, a figure that hadn't changed since EB-5 was created about 30 years ago. The minimum will increase with inflation every five years.

The bill further aims to end the gerrymandering of high-unemployment areas into shapes that include more prosperous places, a practice that allowed some high-end developments to access EB-5 capital, which tends to come at a discount to other forms of financing. 

Going forward, the federal government will have the final say about the exact boundaries of Targeted Employment Areas in which EB-5 investment dollars may be used.

Other new rules include more thorough vetting and reporting requirements to prevent the sort of fraud that has dogged the program for years. The renewal would also grandfather in all of the investors who applied for visas before last summer's expiration but whose applications have been in limbo ever since.

EB-5 has long been a subject of contention between those who want to see it reformed and those who don't. It had expired before last year, though only for short periods. When Congress allowed it to lapse in mid-2021, the regional centers that handled most of the visa applications lost their authorization.

"We're currently seeing various small projects exploring the direct investment route, but to see real economic impact return, we need the regional center program fully operational again," Carrasquillo Law Group Managing Shareholder Rogelio Carrasquillo told Bisnow in January.

Leading the effort to renew the program are Sens. Chuck Grassley and Patrick Leahy, who recently came to an agreement on renewal details, The Wall Street Journal reports.