EB-5 was left out of Congress’ $2 trillion federal stimulus package bill, crushing developers’ hopes of getting cheap financing as real estate deals come to a halt.
The federal program that allows foreign investors the ability to obtain a U.S. green card in exchange for an investment in a U.S. business was not mentioned in the stimulus package that passed Congress on Friday.
Politico previously reported that Congress was considering making changes to the EB-5 program that would increase the availability of visas and lowering the investment amounts. The proposal, if implemented, could have resulted in billions of dollars flowing into new construction projects as some lenders are pulling back lending due to the coronavirus.
EB-5 allows foreign investors the ability to obtain a U.S. green card in exchange for an investment in U.S. businesses. Real estate developers flocked to the program for cheap financing after the last recession to build everything from megaprojects like Hudson Yards to small infrastructure projects like highways in Delaware, but the program has seen little interest since regulators increased the minimum investment amounts for the program in November.
Yet, EB-5 reform is not off the table, according to some experts. There are reports that Congress is also considering another stimulus package that could be larger than the most recently passed $2 trillion stimulus as the federal government looks to keep the economy afloat during widespread closures and layoffs, according to the Wall Street Journal.
“Congress is sure to consider other economic stimulus legislation this spring, and proponents hope EB-5 reforms may succeed then,” said Stephen Yale-Loehr, an immigration law professor at Cornell University and an expert on the EB-5 program.
Politico previously reported that the House was seeking to include two changes that could increase the number of available visas to 75,000 from 10,000. For some projects, the investment threshold to earn legal residence would halve, to $450,000 from $900,000, according to Politico, which cited sources familiar with the matter.
Sen. Lindsey Graham, one of the lawmakers championing a lowering of the investment threshold, said that Politico’s account was untrue and he had not spoken to the Trump administration about EB-5 in the wake of the pandemic. The program also faced criticism from anti-immigration groups and industry observers who argued that EB-5 was a petri-dish for fraud.
Industry players said that the changes would have been a huge boost to their industry.
Nicholas Mastroianni, the CEO and founder of US Immigration Fund, an EB-5 regional center that has raised $2.9 billion in capital for developers, said increasing the number of new visas issued by 60,000 would be a huge boost for his business.
“It would get business back to where it was in 2013 and 2014,” he said in a recent interview with The Real Deal.