The level of Real estate investment for overseas property investors to obtain a US green card will almost double.
Major changes to a federal immigration program that has fuelled South Florida real estate development for almost three decades is about to come into effect.
The EB-5 investor visa program, which gives wealthy immigrants a chance to invest in US real estate projects in exchange for a permanent US residency, also known as a green card, will now be more expensive for foreign investors.
According to a statement from US Citizenship and Immigration Services, the previous $500,000 for ‘targeted employment areas’ – projects located in government-approved rural areas or locations that have high unemployment will rise to $900,000.
Similarly, the investment requirements for projects located outside those areas will rise from $1 million to $1.8 million ‘to account for inflation’.
Now that the green card investment changes are final, local developers are worried about how it will affect development as well as immigration.
Scott Bettridge, chair of Cozen O’Connor’s Immigration Practice, said: ‘For years, EB-5 has provided a cheap source of capital for projects…. Real estate financing is going to undoubtedly become more expensive.
He continued: ‘The EB-5 program is especially important to Miami, given the number of wealthy foreign nationals who are looking to reside permanently in South Florida without the need to be sponsored by an employer for a work visa, or a green card.’
Once the federal government approves a development that meets its criteria, developers can recruit foreign investors through the EB-5 program. The foreign investor will lend the minimum threshold amount, receive a pathway to citizenship (green card) and, once the project is completed, receive the money back with interest. Every year, the government issues 10,000 EB-5 visas to foreign nationals and their spouses as well as their unmarried children under 21.
Advocates of the green card investment program believe that the system has helped develop some of America’s biggest building projects, as well as help enrich thousands of US businesses and employ tens of thousands of workers. Now, Bettridge says, the cost increase will limit the investor pool and affect industries tied to the EB-5 program.