Did Lawmakers Kill the EB-5 Financing Program by Mistake?

A popular immigration program that helps finance senior housing projects was recently extended, but the means of the extension have been called into question—and one group even has filed a lawsuit asking for the program to be declared dead. Meanwhile, some experts on the program are trying to calm the fears of developers relying on it for financing.

The EB-5 Regional Center Program allows foreign citizens to qualify for a U.S. visa if they make a significant investment in a development project that creates jobs in targeted employment areas. It was extended as part of the continuing resolution—a temporary spending bill to keep the federal government funded and running. The bill was singed into law by President Obama on Sept. 29.

However, there is some debate whether the program could be extended through a continuing resolution, as specific legislation to fund it may be necessary.


Acting on behalf of Congressional members, the Congressional Research Service (CRS) conducted a legal analysis of whether the program was permitted through a continuing resolution, and the agency’s resulting letter still left some room for doubt. This ambiguity has allowed some to question the validity of the program, which was set to expire at the end of September.

‘Ceased to Exist’

Urban Equality NOW, a non-profit organization that advocates for specific EB-5 reforms, filed a complaint in Texas in early October asking for a declaratory judgment that the program had “ceased to exist on October 1,” as a result of the way the program was extended as part of the continuing resolution.


The complaint was filed against the Department of Homeland Security Secretary Jeh Johnson and Immigration Services (USCIS) Director Leon Rodriguez.

If a judgment were to be issued, it could mean the program is currently lapsed. However, legal experts in the field are siding with other government agencies—including the Office of Management and Budget (OMB), USCIS, and the Department of Homeland Security (DHS)—that have voiced the clear intent is to continue funding, and therefore extend, the EB-5 and other immigration programs included in the September resolution.

“The CRS put out a letter that wasn’t very definitive,” Debbie Klis, a partner with national law firm Ballard Spahr who deals with EB-5 financing, told Senior Housing News. “It’s clear that it’s everyone’s intent that the program remain in existence and is valid, and that they should continue to process applications.”

While there is some discussion over the way the program was extended, there is no reason for developers and investors to hold back, experts argue. If EB-5 was extended via the continuing resolution as intended, it will expire December 9, giving Congress more time to pass a more permanent solution.

“This insight didn’t give any strength or weakness to either side [of the argument] ,” James “Jimmy” Taylor, head of development and operations at Omega Communities, told SHN. “The government authorities have weighed in and said it’s validly extended. I think the complaint is much ado about nothing, and it’s likely it will get further traction, especially between now and December.”

Indeed, Taylor’s company isn’t slowing down with utilization of the alternative financing; Birmingham, Alabama-based Omega wrapped $5 million raise with EB-5 financing in October for a Florida community, he said.

The reality is a bit of deja-vu situation, as the EB-5 program found itself in nearly the same place a year ago, when hard reforms to the program still appeared to be on the table. In the end, the program was extended at the last minute without reform.

There is still an opportunity for more reforms to come for EB-5, including previous proposals to increase the minimum foreign investment from $500,000 up to potentially $700,000 or more, as well as reform the regional center model, in an effort to better the placement of projects within targeted employment areas (TEAs), where unemployment rates are higher than the national average.

For now, the program appears to be extended and will likely face another extension in the coming months.

Written by Amy Baxter

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