The EB-5 Immigrant Investor Program faced many obstacles throughout calendar year 2020. The COVID-19 pandemic led to a volatile market, troubled EB-5 projects, and extremely low immigration numbers. Luckily, the impacts of the COVID-19 pandemic were not all bad for the EB-5 industry: In fact, planning an EB-5 investment during the COVID-19 pandemic could have many benefits.
The worldwide pandemic was not the only thing to bring changes to the EB-5 program in 2020: United States Citizenship and Immigration Services (USCIS) also introduced two major changes to the program that significantly impacted EB-5 investors. The first was a new visa availability approach for I-526 processing, implemented in April 2020, which prioritizes I-526 petitions from investors whose country of origin has readily available visas. This approach was meant to be more efficient than the first-in, first-out approach historically used. While it did help some EB-5 applicants, it was unfavorable for applicants heavily backlogged China.
The other major change that the EB-5 program faced was the enactment of the Modernization Rule. It took effect in November 2019, at the beginning of FY2020, and made significant changes to the program’s requirements. Perhaps the most prominent change was the 80% increase to the minimum EB-5 investment amount required: The minimum investment amount for an EB5 investment was raised to $1.8 million ($900,000 for targeted employment area, or TEA, projects). Because of the increase, many prospective EB-5 applicants were not able to complete their EB-5 investment. The Modernization Rule also affected TEA designations for EB-5 projects, which subsequently led to a spike in EB-5 regional center terminations.
Spike in I-526 Filings Prior to the Modernization Rule
Because those planning an EB5 investment were given a heads-up that the Modernization Rule would be enacted in November 2019, many prospective investors rushed to file their I-526 petition before the minimum investment amount increased on November 21. The sudden spike in filings resulted in an 80% increase in I-526 petitions in the first half of FY2020 compared to the first half of FY2019.
There were 4,285 I-526 petitions filed between October 2019 and March 2020, and 4,264 of those were filed between October 2019 and December 2019. The full data of I-526 filings for FY2020 is not available, but it is likely that the majority were filed before the fee increase on November 21. The small number of petitions filed after that date is most likely a result of the increased investment amount, as well as the beginning of the COVID-19 pandemic.
Low I-526 Approval Rate
Since Sarah Kendall took over as chief of the Immigrant Investor Program Office (IPO) in FY2019, I-526 petition processing volume has steadily declined. USCIS processed a disappointing 1,359 I-526 petitions in the first half of FY2020. The IPO justifies the lower processing volumes, stating they are focusing on integrity and new adjudicator training.
It is possible that I-526 processing increased in the latter part of FY2020, after the new visa availability processing approach was implemented in April 2020. However, this is still unknown because the data for the second half of FY2020 has not been released. USCIS has published processing time data on its website, but the data does not look promising. Additionally, the I-526 approval rate in the first half of FY2020 was 81%, the lowest it has been since FY2016. However, it is important to point out that this approval rate is not abnormal. While there has been an increase in requests for evidence (RFEs) and notices of intent to deny (NOID), most of these did not lead to denials but simply just created delays in the process.
Increase in I-526 Processing Times
To top everything off, FY2020 also brought all-time-high wait times for I-526 petitions. In August 2020, I-526 estimated processing times nearly doubled, from 29.5–44.5 months to 46–74.5 months. Fortunately, the range fell back down in December 2020 to 30.5–50 months. Given all of the obstacles the EB-5 program has faced in FY2020, it is not surprise that I-526 processing times suffered as well.
USCIS also began differentiating between Chinese I-526 estimated processing times and all other I-526 estimated processing times in August 2020. The reasoning was to provide more accurate estimates, since Chinese I-526 petitions are not prioritized under the new processing approach. The estimated processing times for non-Chinese I-526 petitions have been roughly two years shorter than for Chinese I-526 petitions.
Luckily for EB-5 investment applicants, actual processing times have consistently been far quicker than the estimated time ranges on USCIS’s website. EB-5 investors can only hope that USCIS improves the low processing volumes seen throughout the first half of FY2020 and helps keep the EB-5 program a quick and painless process for foreign nationals to procure a better life in the United States.