This content is for educational purposes only and does not constitute legal or investment advice. For your specific situation, consult a licensed immigration attorney and FINRA-registered financial advisor.
The EB-5 Reform and Integrity Act of 2022 requires regional centers to submit Form I-956F before accepting investor capital. This application contains the foundational investment documents, including business plans, partnership agreements, operating agreements, loan agreements, and target employment area designation letters. For Indian and Chinese H-1B professionals and international students facing employment visa backlogs, the I-956F approval is a necessary component of project due diligence on their EB-5 journey.
For H-1B professionals and international students, investing in a project with an approved I-956F provides certainty and clarity. However, many viable projects enter the market while their I-956F applications remain in pending status. Adjudication times for these applications vary and often range from three to seven months. A pending status does not inherently indicate a problem for investors. It is frequently a matter of timing for the regional center. In the unfortunate event the I-956F is denied, the investor's I-526E petitions are automatically denied without the option to appeal or transfer funds to a new project. This makes conducting ample due diligence extremely important when evaluating projects without an approved I-956F to mitigate immigration and financial risk. For a broader framework, review our complete EB-5 guide.
Regional Center Track Record
We always encourage investors to thoroughly examine a regional center's history and track record, regardless of whether their project is I-956F approved or not. Investors must request data on the regional center's I-956F approvals since the enactment of the Reform and Integrity Act. Regional centers with a track record of successful I-956F approvals — particularly for projects with similar structures — provide a logical basis for confidence.
Investors are recommended to also inquire whether the regional center has experienced any I-956F denial since the 2022 period. It is necessary to understand the underlying reasons and evaluate whether those same risks apply to the current project. A history of successful project completions and a 100% approval rate across prior petitions are strong indicators of a capable regional center operator.
Capitalization and Financing
A primary reason for I-956F denials is a lack of sufficient capitalization. USCIS expects projects to be financially viable, and if a project relies on EB-5 capital as its primary funding mechanism rather than as replacement capital, it will face a higher risk of collapse if the target raise is not met.
Investors must verify that the project's capital stack is fully secured. This involves looking for signed term sheets or commitments from banks and private credit lenders. A project without secured financing is vulnerable, especially in an environment with fluctuating interest rates and tightened lending standards. If the developer cannot complete the project without EB-5 capital, we consider it to be a very risky project, and USCIS may deem the project non-viable and deny the I-956F.
Business Plan and Underlying Data
USCIS scrutinizes the business plan submitted with the I-956F. The plan must comply with established requirements and include credible market methodology. Financial projections and construction costs cannot be arbitrary; they must be supported by verifiable data points.
If a developer projects selling units at a specific price per square foot, the business plan must include data from surrounding areas and growth projections to justify that figure. We always recommend that the investor ask for the business plan and request any documents that support its core assumptions. Discrepancies between the business plan and the supporting data are common triggers for requests for evidence or notices of intent to deny.
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Project Development Status
Evidence supporting the business plan is another factor. Investors must assess the status of the project, including land ownership, pre-development work, and contracts. It is necessary for investors to verify whether the developer has acquired the land or has an executed purchase and sale agreement with a defined closing date. County records can often confirm ownership. We recommend investors also determine whether permitting is complete, the site is prepared, and government approvals are secured. Investors must check for executed third-party contracts and feasibility studies.
Targeted Employment Area Designation
The Reform and Integrity Act created distinct categories for rural and high unemployment TEAs. The criteria determining TEA status are as follows:
• To qualify as a rural TEA project, the investment must be outside designated Metropolitan Statistical Areas and outside of any city or town with a population of 20,000 or more.
• To qualify as a high unemployment area (HUA) TEA project, the area's unemployment rate must be at least 150% of the national average.
Contingency Planning and Legal Counsel
When investing in a project with a pending I-956F, we recommend investors review the project documents to understand the denial protections. Key questions to ask are:
• What happens if the I-956F is denied?
• When will the investment of funds be returned?
• Does the denial require a lengthy appeals process before funds are released?
Working with independent immigration counsel is necessary. The attorney should not represent the regional center or have drafted the I-956F, ensuring that they can objectively point out deficiencies or immigration risks. An experienced attorney can evaluate the pending I-956F, monitor for RFEs or NOIDs, and ensure the investor is protected if the project fails to secure approval.
The right project structure can make the difference between a successful EB-5 petition and years of uncertainty. Contact StudentEB5 today to review your options and ensure you are protected before making an investment decision.
The opinions expressed on this website are solely those of the author/presenter. The information provided is for general informational purposes only and should not be considered professional or legal advice. Student EB5 and its contributors do not endorse or take responsibility for any actions taken based on the information presented here. Visitors are strongly advised to consult with qualified immigration attorneys and financial advisors before making any EB-5 investment decisions or taking any actions based on the content on this website.
Disclaimer: The opinions expressed on this website are solely those of the author/presenter. The information provided is for general informational purposes only and should not be considered professional or legal advice. Student EB5 and its contributors do not endorse or take responsibility for any actions taken based on the information presented here. Visitors are strongly advised to consult with qualified immigration attorneys and financial advisors before making any EB-5 investment decisions or taking any actions based on the content on this website.
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