When the EB-5 Immigrant Investor Program was reauthorized in March 2022, Congress defined two new policies supporting projects that are in a rural census tract. The first is that investor petitions in rural projects must receive prioritized processing, and the second is that 20% of the visas available must be reserved or set aside for rural project investors. This is a significant change for many investors since it impacts both processing time and visa availability.
Since the creation of the regional center program in 1992, the law has always incentivized high unemployment areas through a lower investment level: either targeted unemployment areas (TEAs) with unemployment at 150% of the national average or rural census tracts. Now there are even more reasons to consider rural projects with prioritized processing and reserved visas.
What qualifies an EB-5 project as rural?
The Reform and Integrity Act of 2022 (RIA) defines a rural area as
“any area other than an area within a metropolitan statistical area (as designated by the Director of the Office of Management and Budget) or within the outer boundary of any city or town having a population of 20,000 or more (based on the most recent decennial census of the United States).”
Because rural areas have less developed business environments, projects in these areas inherently come with a different risk profile than traditional EB-5 projects in luxury real estate in large metropolitan areas. In the past, rural projects were not common in the EB-5 industry primarirly because of concern about their resiliency during an economic downturn. Projects tend to be focused on resort properties or second home developments. Today, with the added benefits of priority processing and reserved visas, rural projects have gained interest from both regional centers and EB-5 investors.
The RIA states that USCIS “shall prioritize the processing and adjudication of petitions for rural areas.” While processing times have been historically difficult to predict, we have started seeing rural projects already receiving investor approvals.
USCIS shares limited information on its processing approach. Before COVID-19, I-526 petitions were being adjudicated in under 24 months, and at LCR, our early investors averaged 18 months. With Covid and the EB-5 program lapse, there have been widely acknowledged delays. Currently, at LCR, we have I-526 petitions filed at the end of 2019 that are just being approved, and this represents a processing time of 40-42 months. The USCIS website is posting a conservative 55.5 months for the adjudication of an I-526 petition. The entire industry has made it clear this is unacceptable, and LCR has lobbied with Congress on this issue.
The good news is we are receiving approvals daily, and have seen a 4x increase in I-526 approvals per month, in the last few months. In general, there are a couple reasons why we expect the processing of EB-5 petitions will improve: first is that from 2020 to 2022 there were very few applications because of Covid and the program lapse, and a second is that the agency appears to be working on efficiency. They stated that all petitions from one project will be routed to a single adjudicator, and made a successful push to use all available visas before the end of last year.
The question has been how would the Immigrant Investor Program Office (IPO) implement the requirement to provide priority processing for rural visas, as per the new EB-5 regulation.
Today we are seeing that they are actively reviewing and adjudicating rural projects first.
Immigration attorney Christian Triantaphylis has already experienced the faster turnaround for some of his investors. “Rural projects are receiving priority processing from USCIS. We have seen significantly faster processing times. In fact, in the last few months, four investors we represented have received their I-526E approvals in under 12 months. It appears to be a very real move by USCIS to support rural projects by processing on a priority basis,” Triantaphylis said.
Visa Set Asides
Another major beneficial change in the RIA is that three categories of visa set-asides have been created for Rural, TEA and Infrastructure projects. Specifically, this means that the State Department must hold 32 percent of the 700 EB-5 visas available each year per country for projects in these categories. This is why the US State Department Visa Bulletin today includes new rows for 5th Set Aside priority dates.
While the demand from China and India has exceeded the available unreserved visas in the 5th category, the new Set Aside categories still have visas available, which is indicated by the “C” for “Current,” as of September 2023. Given the approvals being reported for rural projects, it is expected these categories will not remain current for long from high-demand countries. Visa availability is also linked to processing time because the IPO has said it will not process petitions from investors from countries that are not expected to have visas available when they have been approved.
The bottom line
The EB-5 Visa Program, designed to stimulate economic growth through foreign investment, now offers an even more appealing proposition for global investors seeking a US Green Card. Investors interested in quicker processing times and the possibility of a “reserved” visa are now focusing on rural EB-5 projects. This will revitalize areas in the US that have been traditionally overlooked by investors.
For investors who want to move quickly, a rural project provides the opportunity to have their I-526 adjudication complete in under one year. If they were born in a country that could face retrogression, rural projects offer the potential to have visas available on approval. For investors who are already in the US, this speed may be less important because they can complete a Concurrent Adjustment of Status and receive a work permit and travel card, but for investors that are worried about processing backlogs and visa availability, rural projects offer avenues for receiving their visa sooner.
Overall, the industry has become stronger: With options, there is a better ability to match investors with the project that meets their risk profile and their goals for processing times.