Visa program for investors is one of the most popular in American immigration history

A little-known immigration program that allows foreign nationals to get a green card after investing at least $500,000 on a project that creates 10 jobs has proven so successful that last year for the first time it exceeded the limit of 10,000 visas per year.

The program, known as EB-5, has enabled commercial and residential developers in big cities including Miami, New York, Los Angeles and Washington D.C. to jump-start major projects — primarily residential and commercial developments that otherwise might not have obtained traditional funding from U.S. investors.

In Miami, the program is helping to finance mega-projects like the 83-story residential and commercial Panorama Tower now under construction in the Brickell financial district.

Though the program is booming, a dark cloud has appeared on the horizon.

A bill pending in Congress could spell disaster for EB-5 if it becomes law, according to immigration lawyers whose clients include investors who have obtained green cards through the program.

Under the bill’s provisions, current investors would be required to increase their investment by $300,000 or $700,000, depending on the type of project they are funding.

The current $500,000 investment is for projects in a rural area or one deemed of high employment. If the investment goes to other areas then it must be higher, as much as $1.2 million in some cases. If the bill becomes law, it would require $500,000 investors who filed petitions after June 15, 2015 to increase their investment to a minimum of $800,000. Because most investment areas would no longer qualify as high unemployment areas, many investors would have to raise their $500,000 expenditure to $1.2 million.

Immigration attorneys and developers familiar with the program said the problem is not the higher investment, but that the new requirements are retroactive to June 15, 2015.

The bill would also require investors to prove their money has created a percentage of full-time direct jobs lasting 24 months — not just jobs in general as currently specified. Most projects do not use staff employees, but instead use contract workers.

The proposed new requirements could lead to the suspension of green card benefits for thousands of foreign investors approved since June 15 — unless they increase their allocations.

“If passed in its present form, this could shut down the EB-5 program,” said Tammy Fox-Isicoff, a Miami immigration attorney whose clients include foreign nationals who have invested money in various local projects.

The program began in 1990, but remained largely dormant until the 2007-2008 U.S. economic crisis gave it new life.

Since then, EB-5 has become one of the most popular investor visa programs in American immigration history.

In 2006 immigration authorities issued 502 EB-5 visas to foreign investors. But the number of EB-5 visas gradually increased: to 795 in 2007; 1,443 in 2008; 4,218 in 2009 and 8,564 in 2013. In the last fiscal year it shot up to 10,692 — over the annual limit of 10,000.

Investments are pooled by so-called EB-5 Regional Centers. The pooled money of several investors allows developers to fund commercial and residential mega projects. One of the largest in the country is the Hudson Yards project on New York’s West Side with six towers featuring 5,000 apartments.

“Since 2012, we have been raising EB-5 money for our projects,” said Rodrigo Azpurua of Riviera Point Holdings. “We started with a first project in Broward County, an office park; and we did a second one in Doral, another office park. And then we did a third project in Broward, also an office park.”

Azpurua said EB-5 has been good both for his business and for his investors who have been approved for green cards. He said the majority of his EB-5 investors come from Asia and South America.

Recent immigration agency figures show that most EB-5 investors are from China and South Korea. The majority of Latin American EB-5 investors are from Venezuela, figures show.

One of the reasons EB-5 is attractive to developers, more so than traditional sources of funds, is because they pay investors relatively small returns — about 1 to 3 percent, instead of the 7 to 10 percent in a traditional real estate investment plan.

For EB-5 investors, though, the attraction is not profit, but American residency. After five years, those who are permanent residents can apply for citizenship.

But if the proposed bill becomes law, many of the investors who have already filed for green cards could lose their investment and the opportunity to obtain lawful permanent residence if they can’t come up with the larger investment amounts.

“Thousands of investors who invested and filed EB-5 petitions over the last six months would no longer qualify,” wrote H. Ronald Klasko, an EB-5 expert who writes a blog on the program.

The blog’s analysis of the EB-5 bill is available at his website: www.klaskolaw.com/eb-5-investor-visas/the-draft-eb-5-bill-the-good-news-and-the-bad-news/.

Though the blog gives the bill a low chance of becoming law, the legislation is co-sponsored by powerful lawmakers: Sens. Patrick Leahy, D-Vermont, and Charles Grassley, R-Iowa.

“The EB-5 regional center program was created to benefit American communities through investment and job creation,” Grassley said recently in a statement on the bill. “In many instances the program has helped combat a stagnant economy. At the same time, though, we’ve seen too many occasions where national security has been put at risk and job creation has taken a back seat.”

Grassley did not cite an example. But in 2013, Grassley sent a letter to U.S. Immigration and Customs Enforcement expressing concerns about how EB-5 could be used by Iranian covert operatives to infiltrate the United States. Grassley based his concern on an internal memo he had read from Homeland Security Investigations, a unit of Immigration and Customs Enforcement that contained that warning.

Immigration attorneys such as Fox-Isicoff agree that the program could be strengthened and integrity measures added, but contend that changing the rules retroactively for those who invested in good faith would destroy the program.

Fox-Isicoff says this would be counterproductive because the program has enabled many projects, including infrastructure projects, to become reality. Proposed changes, she said, could result in “serious foreign policy implications.