We Spoke, USCIS Listened


Last Friday, November 10, 2017, Mona Shah Global in conjunction with the Steven L. Newman Real Estate Institute at Baruch College hosted a joint conference with the Immigrant Investor Program Office (IPO) from USCIS. The one-day event was the first stakeholder conference of its kind ever organized with USCIS, and also the first event to be live-streamed online for a global audience. Featuring numerous speakers and industry leaders, the conference covered some of the most pressing issues and concerns facing the EB-5 market today over a series of panels, including new legislative changes and their implementation, “red flags” for potential securities violations, rural vs. urban projects and their implications, best practices for source of funds documentation, and issues with bridge financing and the redeployment of investor capital.

USCIS led the final panel beginning with an overview presentation of the EB-5 program. While intended to be a primer for overseas viewers, the introduction actually provided substantive insights useful for both newcomers and industry veterans alike. One particularly salient point was the office’s explanation for the backlog and exceptionally long adjudication times. According to USCIS’ Senior Advisor for Economics, Jan Lyons, there was a surge of applications and petitions filed in advance of the December 2015 sunset date. The combination of the sheer volume and poor quality of petitions filed has delayed processing times for all. Mr. Lyons did say that going forward, adjudications of I-526 and I-924 applications would be completed much more quickly.

More significantly, the conference provided USCIS IPO with an opportunity to hear the questions and concerns of EB-5 stakeholders from all perspectives – investor, developer and practitioner. While significant policy changes to the EB-5 program are beyond the purview of USCIS IPO, the office does have the power to review certain interpretations of the law and its application of those statutory requirements. One issue in particular that was brought to the attention of USCIS was the applicability of bridge financing for EB-5 projects. Prior to 2014, USCIS’ stated policy was that there must be a “clear nexus between investment and job creation,” thereby precluding the use of EB-5 funds for repayment of bridge financing. After 2014, they revised this policy to allow for EB-5 funds to be employed as payment for bridge financing provided that bridge financing was contemplated before EB-5 or that the bridge financing was temporary. It was the precise definition of the word “temporary” that has proven to be problematic. USCIS now defines “temporary” as one year; but as was discussed during the panels, with the growing adjudication times and increasing complexity of requirements for investors’ source of funds documentation, one year is an arbitrarily short timeframe to allow for this use of stopgap financing. Bridge financing can be vital for allowing projects to proceed when investors’ capital is delayed. After hearing comments from stakeholders during the conference, IPO affirmed that they would revisit and review their policy on the duration question for bridge financing applicability.

Clearly, events like this are beneficial for both USCIS and industry stakeholders: we get direct access to USCIS’ perspective on adjudication decisions, and they have an opportunity to hear our thoughts and concerns about the process. Going forward, it is important that we continue to maintain this high level of dialogue.

You can watch themorning and afternoon sessions of the conference on YouTube here.

About The Author

Sami Haidar Having worked for two years at Mona Shah Global, Sami Haidar has gained extensive experience with the entire EB-5 process. He has conducted research on EB-5 and its potential for use in infrastructure projects, with Professors Jeanne Calderon and Gary Friedland, two esteemed experts in the field. Sami is a graduate of the Leonard N. Stern School of Business at New York University, with a Bachelor of Science in Business and Political Economy, with a Minor in History with Honors.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.