On October 24, 2014, USCIS released an updated EB-5 Processing Report of average processing times for the Immigrant Investor Program Office as of August 31, 2014. This recent report indicates that current average processing times are 13.8 months for Form I-526 (Immigrant Petition for Alien Entrepreneur); 7.2 months for Form I-829 (Petition by Entrepreneur to Remove Conditions), and 8.1 months for Form I-924 (Application for Regional Center Under the Immigrant Investor Pilot Program).
It is important to note that these figures are averages and that EB5 Affiliate Network has seen processing times both significantly shorter and longer on all forms. For example, our experience completing numerous economic impact reports and regional center applications throughout the United States shows us that I-924 applications filled for smaller regions (<10 counties) tend to be approved faster than average, whereas larger tracts of coverage typically require more approval time. Although this is the norm there are exceptions and it is difficult to predict processing times with any certainty.
From an availability of capital perspective, since current I-526 forms are taking around 13 months for individual investor approval, we are seeing a shift in the marketplace in escrow terms. Both the timing and amount of capital available upon release are adjusting to reflect delays in processing times. For example, during periods where I-526 application processing times have been shorter, projects in the marketplace have structured escrow agreements such that investor funds drop into the project’s operating account (out of escrow) on each individual investor’s I-526 approval. Now that USCIS processing times have increased, we are seeing a movement toward a range of early release investment structures. A few examples of these structures include: (i) 80/20 capital releases on submission and (ii) full capital release for all investors on the first investor’s I-526 approval.
(i) 80/20 capital releases on submission: With this structure, the investor’s funds are put into escrow and then 80% of the funds are directly released into the project’s operating account upon I-526 submission with the remaining 20% held back in escrow until that individual’s I-526 application has been approved by USCIS. This method of early release is becoming more widespread as many projects cannot wait over a year for money to become available out of escrow. The logic behind this structure is that historically USCIS has had an I-526 denial rate of well below 20% and so the idea is that with multiple investors in a given project, if one investor’s I-526 petition is denied, then there will be at least 4 investors in the same project who successfully obtain I-526 approval.
(ii) Full capital release for all investors on first I-526 approval: With this structure, all of the investor’s funds for a project are held in escrow until the first investor in the group gains I-526 approval. When this occurs, this event serves as a trigger for the remaining investor’s capital held in escrow to drop out of escrow and into the project’s operating account. There can also be holdbacks included in this to create reserves for any denials.
To learn more about EB5 Affiliate Network and how we work together with partners to assemble best in class EB-5 projects, please visit our website at www.EB5AffiliateNetwork.com or call us directly at 1-800-288-9138.