IIUSA sustainment lawsuit and EB-5 integrity
February 1, 2025 17 Comments
7/30 UPDATE: See Good news (CIS Ombudsman, Sustainment litigation, good faith investor litigation, FOIA on Security Checks)
— ORIGINAL POST —
I had hoped to be spared writing more about the IIUSA sustainment lawsuit, IIUSA vs. DHS et al. I protested when it came out last year, but expected it to die a natural death once a judge had a look at the arguments. Or ideally even earlier, when IIUSA would wisely decide to retract the effort before it brought any more harm to EB-5 program integrity and future viability.
But the litigation has rolled on, and we learned this week that the DC District Court is probably not going to save us from ourselves. Judge Ana Reyes heard oral arguments in the case on Tuesday, and indicated after listening to an ill-prepared DOJ attorney that she did “not understand” the government’s case and was inclined to rule in favor of IIUSA. The judge ordered the parties to discuss and submit a Joint Status Report by February 27. I take time to write now, just in case anything can be done in 30 days, before the litigation comes to a decision that would be disastrous for the industry as well as investors.
To briefly review the issues and history… the IIUSA sustainment lawsuit questions the required period to sustain an EB-5 investment. Does EB-5 require investment to remain deployed at risk throughout the investor’s two-year conditional permanent residency period (CPR), or is the minimum two years from the time of investment and until jobs are created? CPR-linked sustainment was the rule prior to the EB-5 Reform and Integrity Act of 2022 (RIA), and IIUSA disputes that RIA changed the rule. When RIA came out in 2022, industry read the law and noticed that RIA edited the sustainment requirement. USCIS responded to the apparent RIA change in 2023 when it posted a website Q&A to explain how USCIS would apply the RIA-revised rule that the minimum investment period starts from the time of investment. The market was excited about the RIA change and USCIS interpretation, which promised to protect investors from investment periods that can become unpredictably long when linked to immigration milestones. Over $6.1 billion in EB-5 investment was raised from 2022 to 2024 (judging by data showing 6,160 post-RIA I-526 and I-526E filed) from investors relying on the RIA change. But IIUSA sued in 2024, arguing that the RIA never changed the sustainment period, that CPR-linked sustainment has always been and remains the controlling regulation until properly modified, and USCIS can’t just make new rules on its website but needs to do notice-and-comment rulemaking if we’re going to get a different sustainment rule.
IIUSA’s statements explain why IIUSA filed the sustainment lawsuit. The goal is to get a new rule from USCIS through proper procedure – a good new sustainment rule that will be fair to everyone, and more manageable than the two-year minimum apparently defined by RIA. The IIUSA plaintiffs most definitely aren’t suing for the sake of keeping the already-pocketed $6.1+ billion for years longer than anticipated.
AIIA’s statements explain why investors are so outraged at the sustainment lawsuit. If the lawsuit succeeds in overturning the USCIS interpretation of the RIA change, the immediate result could be to restore the bad old days of having to stay invested throughout conditional permanent residence, however long CPR may be delayed by slow processing and visa backlogs. IIUSA’s stated goal to eventually arrive at a new and better sustainment policy via notice-and-comment rulemaking is not soothing for investors, considering that the USCIS rulemaking process historically takes years, with neither timing nor outcome being predictable.
As an IIUSA member, I’d like to point out that “IIUSA lawsuit” means “a lawsuit promoted by some members under IIUSA’s name, and opposed by some other members.” I also understand that some members have been carried along by the expressed good goals of the litigation, not realizing the practical circumstances that undermine those goals. In case it’s not too late to change a few key minds, let’s remind ourselves of those circumstances.
- The apparent Day 1 result of IIUSA litigation success is not a new and fair sustainment rule, but a chance for rulemaking. In other words, the Day 1 result is falling back on the pre-existing sustainment regulation unless and until USCIS promulgates a new sustainment rule.
- USCIS rulemaking can be expected to take many years, and even then does not reliably produce results that benefit the industry or investors. The most recent EB-5 regulation (EB-5 Modernization) was first promised by USCIS in 2014, published for notice and comment in 2017, finalized in 2019, and vacated in 2021 following industry litigation. As of January 2025, three years after RIA, USCIS has not even proposed any of the three EB-5 regulations that RIA required DHS to prescribe – not even the one for which RIA stipulated a 270-day deadline. If USCIS can’t even make a timely EB-5 regulation when so ordered by Congress, what can we expect now from rulemaking on sustainment? Is the market likely believe in a good new rule coming soon?
- Backlogs and visa wait times are already a threat to post-RIA investors, and promise immigration wait times far longer, for many new investors, than the sustainment periods IIUSA considers fair. For example, 3,995 high unemployment investors (i.e. about 8,000+ future visa applicants) were already in process as of July 2024, while high unemployment visa supply is only 2,200 visas this year and 1,000 in future years. Until now, we’ve been able to reassure prospective investors that at least visa delay is just visa delay, but not impacting the investment timeline. The sustainment lawsuit could cancel that anodyne, and double the pain of looming visa waits by linking repayment waits.
- Over $6.1 billion was invested from 2022 to 2024, under the now-challenged USCIS sustainment policy.
Who wants to try to recruit or advise prospective EB-5 investors with this unattractive message: “Sorry but we can’t tell when you may be able to get your money back – it doesn’t depend on when your project creates jobs or repays the issuer. The required sustainment period as of today depends on your immigration process timing. If you fear that your visa could be delayed seven years, that means also having to fear repayment in a minimum of nine years, because existing rules require sustainment through conditional residence. Your funds may need to be redeployed in future projects that you don’t choose. We’re trying to advocate for a reasonable minimum five-year sustainment period insulated from immigration delay, but that’s a goal and not the existing rule that applies now.”
And who wants to manage revolt among existing post-RIA investors who perceive their exit strategies sued out from under them by IIUSA? Who wants to have to explain: sorry, I know you agreed to invest in a four-year project, but I’ll have to hold your money for longer than that if your immigration process takes longer. Who wants IIUSA’s reputation to drip with the appearance of having facilitated a bait-and-switch implicating $6.1+ billion dollars already raised since RIA?
For everyone who wants to avoid such disastrous outcomes, is there any way to influence the Joint Status Report due by February 27? The goal: don’t let the litigation outcome be to apply the legacy conditional-permanent residence sustainment rule to all post-RIA investors pending new rulemaking. Because otherwise, IIUSA and investors will find themselves in the same kind of disaster: having to wait for what they want (a livable new regulation, or chance for investment exit) for as long as it can take for the government to act (whether on new sustainment rulemaking, or to get and allocate enough visas). Otherwise, no one will win except for those few who don’t care about EB-5 program integrity or future, but just laughing all the way to the bank over extending control over billions of banked post-RIA funds, looking forward to cashing in on visa backlogs and slow USCIS rulemaking to help keep that money beyond expected timelines.
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EB-5 Updates 
FYI, just to let everyone know.
I-526 processing dropped to 1 case per day. We had 39 total cases approved in Jan, 2025. Out of that majority were before 20th.
If you are looking to get EB-5 visa, it may be over 10 yrs wait at this rate. Next 4 yrs more than likely add lot of backlog. Sadly, it’s part of project2025.
For month of Jan, 2025 approval rate was 29.6%
If you are from India or China please use extreme caution.
Current Months of Inventory (MOI) is 6.2 months as per USCIS for legacy applications.
Ram, what is the source of your information? How many cases are you tracking? I didn’t know it’s possible to track post-RIA I-526 and I-526E. And my info from other sources makes me doubt that volume overall has dropped as much as you fear.
last 30 days data, hope this helps.
The app I use to track case stats is
Lawfully
I have subscribed to their Pro version which gives additional stats.
These screenshots are from that. If someone else have any other data source, please share it, for pre-RIA applications.
Thank you for the clarification!
I am a eb-5 investor and know many others. Very easy to say when you get your money back. NEVER
as far as “Current Months of Inventory (MOI) is 6.2 months as per USCIS for legacy applications”
that’s listed on USCIS website.
A great article, as usual, Suzanne. One has to wonder what the IIUSA leadership was thinking when they filed this lawsuit.
The funny thing is I cannot understand how even the Regional Centers stand to benefit from their lawsuit. They have been successfully launching 3-6 year projects even under the 2-year-sustainment interpretation. Then why are they rocking the boat?!
There is an additional risk worth pondering. If the 526E processing slows down (as it did during 2019-2022), then the immigration process will take longer, and investors will need to sustain their investment also for longer – if the IIUSA lawsuit succeeds and the USCIS interpretation is vacated.
The 2023 clarification regarding the sustainment period post-RIA was a positive step toward enhancing transparency in the EB5 process. However, the concept of a strict 2-year sustainment period, even after the new definition, doesn’t fully align with the reality of many EB5 investment structures.
In projects where Regional Centers (RCs) lend funds to greenfield developments, the capital is typically deployed in phases rather than all at once. For example, if an RC invests capital over an 18-month period, the sustainment period begins when the full capital is invested. Following this, the project may need additional time to stabilize, refinance, or sell assets to repay the loan. This often results in an overall investment timeline extending beyond 2 years, with many projects structured for 5-6 years to ensure this.
While the 2-year sustainment period is the minimum, it is important to recognize that most projects prefer to keep capital invested for a longer period. This extended timeline is typical in development projects, where reaching certain cash flow milestones and occupancy rates is essential before the project can successfully exit.
The EB5 program would benefit from a more standardized understanding between IIUSA, USCIS, that acknowledges the practical realities of these investment cycles. It is crucial that the sustainment period reflects both the intent of the program and the actual timeframes required to achieve a successful project outcome. Additionally, minimizing concerns about redeployment, as was experienced prior to the RIA, would help provide further clarity and confidence for investors.
Moreover, going back to the pre-RIA understanding of starting the sustainment period of 2 years post-conditional green card is not at all good for investor confidence.
In summary, a balanced approach is needed—one that considers both the program’s goals and the operational realities of EB5 projects. A more consistent framework would ultimately strengthen the program’s integrity and effectiveness.
I’d like to re-emphasize that there is currently no “concept of a strict 2-year sustainment period.” Projects today are already free to offer investment periods as long as required for the operational realities of EB5 projects. Naturally, these timelines extend beyond two years for nearly all projects. That’s already fine under the immigration rule, which merely stipulates a minimum time for immigration purposes. USCIS neither does nor should stipulate an average time or maximum time for EB-5 projects.
I agree 100% my typo mistake here for strict 2 year period.
Right — I can see from your comment that we are in agreement! I mostly wanted to raise the issue for the sake of others reading. Because my impression is that some IIUSA plaintiffs were indeed confused into thinking that a 2-year minimum meant that they couldn’t offer 5-year projects, or that they couldn’t practically offer 5-year projects unless immigration policy required a 5-year minimum period. So I want to emphasize the falseness of that thinking. It’s false as a matter of policy, and observably false if one looks at the market and sees what’s been selling.
Just want to share quick update with everyone, we so far only have one I-526 application approved in Feb. So you can imagine, how bad things currently are at USCIS.
How does the I-829 processing stats look like? Do you have any info on that?
Sorry Rahul, I don’t as I am only tracking I-526 that too Legacy applications.
I dig some deep further into these, found some interesting information.
Lawfully use API that connects to internal USCIS system which gets real time data.
“Lawfully uses USCIS’s official API to provide you with the most accurate and timely case status updates. We successfully completed a rigorous approval”
that means the stats are realtime, however recently they removed some features as new administration likely blocked these access as the approval rate started dropping & delays in processing #project2025
They likely had good connection with Biden administration which gave them more access & they build their app using the data collected & some AI. Now it seems some of the features are getting disabled, as it shows them in bad light. So to prevent this those features are disabled & will likely see further censorship from USCIS. One pattern I noticed was use to get daily case updates, it now seems to be every Thursday & Friday they process them like approval or denial for I-526 cases.
As you can see no updates or changes since Oct 2024 for EB-5 on US Visa bulletin sadly, was hoping for some change on March 2025 update, but no change.
If anyone needs more accurate update you need their Pro paid version.
thank you
Hi Ram ,PD of March 14 2022 Country of chargeability- India. I got my I-526 approved today 60 days after responding to NOID. Waiting to be current for GC now.