The EB-5 Immigrant Investor Program, established in 1990, has undergone significant changes with the EB-5 Reform and Integrity Act of 2022 (RIA). Understanding this law is crucial for potential investors as it includes insight into how the United States government will handle increases in the minimum EB5 investment amount moving forward. Increases are expected to take effect in January 2027, less than two and a half years from now.
Historically, the required EB5minimum investment was $1 million for non-targeted employment areas and $500,000 for projects in targeted employment areas (TEAs), regions characterized by high unemployment or rural status. The Reform and Integrity Act of 2022 raised these thresholds significantly to reflect economic changes since the program's inception. The new minimum EB 5visa investment amount requirement is now $1,050,000, reduced to $800,000 for TEAS] and qualifying infrastructure projects.
A notable requirement in the RIA law mandates automatic adjustments of the investment thresholds every five years, beginning January 1, 2027. These adjustments will be based on the cumulative annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) reported by the Bureau of Labor Statistics. This ensures that the investment amounts remain aligned with inflation and economic conditions, preventing another extended period without adjustment.
Using CPI data from January 1, 2022, through July 31, 2024, we can understand the impact of inflation on the investment thresholds. As of July 31, 2024, the CPI-U index was recorded at 314.340, reflecting a 12.75% cumulative change since December2021 when it was 278.802. This real-time data provides valuable insights into how inflation influences the EB-5 investment requirements.
The increased thresholds and automatic adjustments reflect public policy choices by Congress to ensure the EB-5 program remains practical and reflects current economic conditions. This means a higher initial investment. Understanding the automatic adjustment helps investors plan their finances better, knowing that the requirements will evolve with inflation.
The changes brought by the RIA mark a significant shift in the investment landscape for prospective EB-5 investors. The program aims to remain relevant and economically viable by incorporating automatic adjustments based on inflation. Investors should stay informed about these changes and consider potential future increases in their planning.
So what will increases look like? According to the Peachtree Group EB-5 team’s conservative calculations, in January 2027, we expect the lowest investment threshold will increase from $800,000 to between $900,000 to $975,000. Here’s how we came to this conclusion.
To set a baseline, the Peachtree Group team reviewed the relevant CPI index numbers from Dec. 21, 2021 to August 14, 2024, and projected future CPI increases based the Federal Reserve’s target inflation rate of 2% per year to demonstrate the projected CPI number (blue line).
Using this data the team created lines for the project amount of the targeted employment area amount and reviewed three scenarios:
Under the latest inflation rate reported for July 2024 (1.4% per year), the investment threshold as of January 1, 2027 would increase to $900,000. (yellow line)
If inflation settles at the Federal Reserve’s target of 2% per year from today, the investment threshold would be $900,000 as of January 1, 2027 (green line)
If inflation continues at the cumulative average rate since the reference date of January 1, 2022(4.9% per year), the investment threshold as of January 1, 2027 would increase to $975,000 (red line)
Using the law and statistics and extrapolation to 2027, we reach our conclusion that we expect as of January 2027, the lowest investment threshold will increase to between $900,000 to $975,000.
What Can You Do Now?
No one can be certain of what the future holds, even when hypothesizing based on historical data. However, what we do know is there will be automatic adjustments to the minimum EB5 investment amount per the RIA and those adjustments are expected to take effect in January 2027, less than 2.5 years from today.
To lock in the lower EB5 investment amount, it is important to get the process started. Peachtree Group is an integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support, and grow our investments.
Our EB-5 Team has more than30 years combined experience in EB-5 investments managing over $2 billion in EB-5 transactions. Learn about the Peachtree Advantage and let us help you navigate the difficult EB-5 process before investment amounts rise.
Here’s how you can begin your journey to U.S. residency with an EB-5 investment.
Start by visiting our website where you can learn more about our specific EB-5 investment opportunities.
We designed our site to be user-friendly and simple.
Each month the US State Department publishes the official Visa Bulletin, which is the source for information on visa availability in the United States. It shows which approved immigrant applicants may move forward to obtain their immigrant visa based on the date the original petition was filed: If your EB-5 petition is approved by USCIS, you go to the Visa Bulletin chart to see if there is a visa currently available for you.
There are 140,000 employment-based green cards available each year, with specific limits for each “preference” category. US immigration law also sets limits on the number of green cards available based on the country of origin. No single country of origin can account for more than 7% of the green cards issued across all family-based and employment-based categories.
Although generally not an issue for most countries, this country-of-origin cap can create backlogs for EB-5 investors from China and India. (Generally, there are not enough EB-5 applicants from Mexico or the Philippines to create backlogs for those countries, which are the only other countries subject to the country-of-origin caps.)
Potential EB-5 participants should refer to the Visa Bulletin to understand whether there are visas immediately available for them after their I-526 or I-526E petition is approved. The chart for EB-5 from the latest visa bulletin shows the following:
This Visa Bulletin shows there is currently a backlog only for investors approved under the “old” EB-5 program, which was in place before the EB-5 Reform and Integrity Act of 2022 (the “RIA”), effective on March 15, 2022.
However, there is good news for Chinese and Indian pre-RIA investors, as the dates have moved forward from December 15, 2015 to July 15, 2016 for Chinese applicants and from December 1, 2020 to January 1, 2022 for Indian applicants. Investors from China and India who applied under the old program after the cutoff dates listed (July 15, 2016, for China; January 1, 2022, for India) cannot immediately seek to get their visa and move to the United States. They must wait for the listed date to move forward to their petition’s application date, generally known as their “priority date”.
Note it is only the “Unreserved” preference category in EB-5 that shows a cutoff date. The new reserved preference categories for EB-5 all show as ‘C’ or “Current”, meaning anyone who has an approved EB-5 petition related to the new reserved visas created by the RIA can start the process to immigrate to the US, even those from China and India.
Conventional EB-5 wisdom is that the country cap is calculated within each preference category, not across all preference categories. That would mean that no one country could have more than 7% of just EB-5 visas in any reserved visa category.
This is wrong.
In a US Federal Register announcement dated March 28, 2023, the US Government acknowledged they were calculating country caps incorrectly and outlined how country caps were to be calculated moving forward. Here is an article we have written to explain EB-5 visa country caps the confusion and why investors born outside of China and India can confidently choose between either a rural or high unemployment EB-5 project.
The cutoff dates do not move in lockstep with the real-world calendar. The last time the dates changed for China and India were:
The Visa Bulletin dates are calculated by the Department of State based on information they have from USCIS about approved petitions. These charts do not show the impact of petitions that may have been filed before now, but are not, yet, approved.
The Visa Bulletin is the end of the story. To know how long a would-be immigrant might need to wait, it’s important to understand how many petitions might be in process ahead of them.
Think of the Visa Bulletin like a toll plaza on a highway. It lists how long the line is at the toll booth and separates the line for specific countries that have a backlog. However, the Visa Bulletin does not show how many cars are on the highway on their way to the toll plaza. Those are the pending petitions. This information is generally not made public, but there have been efforts by EB-5 industry groups to get this information. We will provide our analysis of this information separately.
Concurrent filing is a mechanism where EB-5 investors already in the United States can send in some forms at the same time as their first Form I-526E application, instead of waiting until that application is approved. With concurrent filing, investors can fill out and send in both their Form I-485 (Application to Register Permanent Residence or Adjust Status) and their Form I-526E petition at the same time.
Generally, this will allow those investors to travel in and out of the United States without any other visa, and to legally work in the United States without any separate employment sponsorship or visa. These investors may receive these benefits while their I-526E petition is pending, NO MATTER HOW MANY PETITIONS MAY HAVE BEEN FILED AHEAD OF THEM.
In our metaphor, this means that it does not matter how many cars are on the highway ahead of you. As long as there is not, yet a line at the toll booth, you may apply for these benefits. Essentially, if you’re here, you can stay here.
Have questions about EB-5, visit our website or fill out our contact form.
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ATLANTA (May 28, 2024) – Peachtree Group ("Peachtree") has received its I-956F approval from the United States Citizenship and Immigration Services ("USCIS"), the government agency that oversees the EB-5 Immigrant Investor Program, for the development of a Home2 Suites by Hilton in Boone, N.C.
USCIS adjudicated the I-956F petition for the hotel development in just five months.
"It is a testament to the due diligence of the Peachtree team that it was able to get the project approved so quickly, especially when the published processing time is over 15 months," said Adam Greene, EVP EB-5 for Peachtree Group.
Peachtree originated $21.7 million of fixed-rate construction financing over a five-year term for Narsi Properties to develop a 105-room Home2 Suites by Hilton near downtown Boone. This historic town, situated in the vibrant mountains of western North Carolina, is close to Appalachian State University, its 22,000-plus students and faculty, and numerous other demand generators including three of the most popular ski resorts in the state. The hotel is expected to be completed by Fall 2024.
"Construction is underway, demonstrating tangible progress and reducing initial project risks. Importantly, even as we raise EB-5 capital, Peachtree has bridged the loan, offering certainty of execution for the project and is maintaining an equity stake aligned with the same risk level as our EB-5 investors. This commitment ensures our interests are directly tied to the project's success, reassuring all stakeholders," said Greene.
The EB-5 visa program provides the opportunity for foreign investors to potentially obtain a green card in exchange for making a significant investment in a new commercial enterprise that creates jobs in the U.S. Under the program, foreign nationals who invest a minimum of $800,000 in a U.S.-based project that creates or preserves at least ten full-time jobs for U.S. workers are eligible to apply for permanent residency in the U.S.
"Peachtree Group launched its EB-5 program last year to provide an important financing tool that enables us to continue funding job-creating projects across the country," said Greg Friedman, Peachtree's CEO and managing principal. "This hotel development is expected to create roughly 328 jobs."
About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, the company manages billions in capital across acquisitions, development and lending, augmented by services designed to protect, support and grow its investments. For more information, visit www.peachtreegroup.com.
Contact:
Charles Talbert
678-823-7683
ctalbert@peachtreegroup.com
