Top 9 Things to Know about Behring Regional Centers EB-5 Lawsuit Victory

June 25th, 2022 Peter Bibler

Behring’s lawsuit scored a victory as the Court issued a preliminary injunction ordering EB-5’s immediate start.

Below is the top 9 things you need to know. Also, Register for Behring’s Webinar on Monday, June 27th at 4pm Pacific, Discussing the Ruling. Replay will be available to registrants.

1. I-526 petitions can be filed now, and early investors will have tremendous advantages. 

The immediate effect of the court’s ruling is that new EB-5 investors may file new I-526 petitions for their investments in EB-5 projects now. The court set aside USCIS’s deauthorization of regional centers. An approved Form I-956 is no longer required. Because Behring Regional Center is now re-designated as an authorized EB-5 Regional Center and its EB-5 project already has USCIS I-924 exemplar approval, the approval of its business plan is binding on USCIS adjudication of new EB-5 investor I-526 petitions.  

Early filers, especially investors from countries at risk of future retrogression, are able to take advantage of being able to file while their countries’ visa availability is current. Most importantly, investors may be the first to access the new visa set-asides reserved for high unemployment area (or TEA) projects. Only 10% of total EB-5 visas are reserved for TEA projects. Typically, this means approximately 1,000 visas (or fewer than 360 investors per year). For this fiscal year, approximately 19,980 visas are allocated to the EB-5 Program; thus, approximately 1,998 visas are reserved for TEA projects. Investors who invest in a TEA project are eligible for these reserved visas and enjoy their own visa queue. For example, China investors in the unreserved EB-5 visa category currently face a backlog (priority date is currently November 2015) but face no backlog if they choose a project qualified for a visa set-aside … for now.  

Investors who are already in the US may also take advantage of concurrent filing. This option enables US-based EB-5 investors to file their I-485 applications to adjust status at the same time as their I-526 petitions. Doing so means these investors may obtain work authorization and a travel permit – usually within 6 months – while they wait for their green card petitions to be approved by USCIS. These investors enjoy more flexibility to live, work, study and travel without the limitations usually applied to other visas, such as H-1B, F-1, E-2 and the like.  

Early investors get first pick at institutional-quality EB-5 projects. Behring’s flagship project – 1900 Broadway – offers EB-5 investors a project that benefits from both USCIS I-924 exemplar approval and investor I-526 petition approval. Under the new EB-5 Reform and Integrity Act of 2022 (“RIA”), prior approved business plans are binding on USCIS when processing new I-526 petitions. Plus, vertical construction is already under way for Behring Regional Center’s 1900 Broadway project, having created more than 950 EB-5 eligible jobs for its investors. Its capital stack is already 100% secured and comes with a construction completion guaranty backed by S&P 500 company. Limited spots are available for new EB-5 investors. 


2. Risk of an USCIS appeal or stay is unlikely to succeed, securing Behring’s relief and EB-5 investor’s capability to file new I-526 petitions. 

Although USCIS may seek an appeal, the likelihood of success is low. The appeals process, too, is a very long procedure, and Behring Regional Center will remain authorized throughout the process. This means EB-5 investors may continue to file their EB-5 petitions through Behring as soon as the order is entered. 

A preliminary injunction is an injunction, i.e., an order that compels a party to act or refrain from acting, before or during a trial. A preliminary injunction has the goal of preserving the status quo of the parties before a final judgment is entered. Although the preliminary injunction is interim relief, it is appealable. USCIS has a limited time to file an interlocutory appeal (typically filed within 10 days) of the preliminary injunction order, and in doing so, it may ask the appellate court to stay the district court’s order pending appeal. If the stay is denied, then the injunction remains in place pending appeal. Moreover, unless otherwise ordered, the lawsuit in the district court also proceeds to summary judgment or trial. 

Interlocutory appeals are less common. More common is an appeal from final judgment. In Behring Regional Center’s current lawsuit against USCIS, the facts are not in dispute. At issue is whether USCIS committed legal error when it declared that the EB-5 Reform and Integrity Act of 2022 automatically deauthorized existing EB-5 Regional Centers and required them to be reauthorized through approval of USCIS’s new Forms I-956 published in mid-May. The issue is resolved by the interpretation of the text of the statute, and if ambiguous, by determining what was Congress’s intent when passing the statute. 

When granting a preliminary injunction in favor of Behring Regional Center, the district court determined that Behring will likely succeed on the merits if the case were to proceed to trial. With no factual dispute and only a legal question remaining, the case will most likely proceed to summary judgment. Behring Regional Center won summary judgment against USCIS in its prior lawsuit when it successfully vacated the 2019 EB-5 Modernization Rule. Summary judgment is final. USCIS action is vacated entirely (applicable industry-wide). Under these circumstances, USCIS has 60 days to file a notice of appeal to preserve its right to appeal the district court’s decision. USCIS may also seek to stay the district court’s order invalidating USCIS’s deauthorization of EB-5 Regional Centers. 

Whether USCIS seeks to file an interlocutory appeal of the preliminary injunction or an appeal from summary judgment, USCIS is likely to fail. USCIS relies primarily on a single use of the word “repeal” in the EB-5 Reform and Integrity Act of 2022. On the other hand, the statute contains several provisions that would not make sense if EB-5 Regional Centers were automatically deauthorized by the RIA’s enactment. Plus, Congress has already issued two letters informing USCIS that it is wrong, and that Congress did not intend to deauthorize EB-5 Regional Centers. 

Over several hours of court hearings, the district court determined that, at best, the RIA is inconclusive. Therefore, USCIS is required to make a policy decision as to whether the RIA deauthorized existing EB-5 Regional Centers at the time of the law’s enactment. USCIS cannot simply announce on its website that EB-5 Regional Centers are deauthorized. It cannot simply publish new forms and requirements. Instead, assuming the RIA is inconclusive on this point, USCIS must engage in agency rulemaking in compliance with the Administrative Procedure Act, which requires a public notice and comment period before taking any action. This is a lengthy process, typically taking at least a year for USCIS to publish a new rule.  UPDATE: READ COURT’S RECENT DECISION 

Under these circumstances, USCIS is unlikely to succeed if it does seek to appeal the court’s ruling. Even if it does appeal, the appeals process in the 9th Circuit (including California), takes approximately 1 year before a decision is rendered. During that time, the injunction against USCIS will stand, and EB-5 investors may file I-526 petitions. 


3. Behring has TEA Qualified EB-5 projects open, already creating jobs and lowering risk every day. 

EB-5 investors have the opportunity to choose an EB-5 project with its capital stack secured and already under construction creating jobs. Behring’s 1900 Broadway EB-5 project is an institutional quality multifamily residential tower that is already in vertical construction. To date, it has already created nearly 1,000 EB-5 eligible jobs. Not only does the project have its I-924 exemplar approved, USCIS has even approved actual investor I-526 petitions 

The highest risk phases of any EB-5 project occur at the predevelopment and initial construction stages. The initial hurdle entails obtaining the necessary entitlements and construction permits to get the government and various local agencies’ permission to build the project. Navigating the bureaucracy for a complex project is fraught with obstacles. Investors can choose Behring’s 1900 Broadway knowing that it has already successfully completed all predevelopment stages. 

At the same time, projects often encounter obstacles at the financing stage when trying to secure the capital stack. Just as the strongest steel is forged in fire by expert blacksmiths, the strongest EB-5 projects have institutional partners and benefit from the scrutiny of their strict underwriting processes. The COVID-19 pandemic has disrupted many projects, causing many banking and institutional partners to withdraw, delaying or canceling projects entirely. Behring’s 1900 Broadway enjoys strong institutional commitment, including an S&P 500 company that is providing a construction completion guaranty. Even if 1900 Broadway did not obtain any new EB-5 capital, the project is still fully funded and will be completed as scheduled. 

The riskiest stage in the project’s construction occurs at the start when breaking ground. This is when below-grade obstacles or environmental issues may be discovered. These can derail a project’s budget and timeline. Behring’s 1900 Broadway is already vertical. At full speed, 1900 Broadway will complete one floor per week, making the construction process more routine and lower risk. 

See 24-hour construction cam for 1900 Broadway Project.


4. Behring investors may be eligible for the new 1,000 visa “set-aside” for TEA projects. 

Early EB-5 investors will have first access to invest in a TEA project that qualifies for the new visa set-aside. Under the EB-5 Reform and Integrity Act, new visa categories were created reserving 20% of visas for rural projects, 10% for high unemployment TEA projects, and 2% for infrastructure projects. Thus, of the annual 10,000 annual EB-5 visa limit, investors in these projects have their visas set aside from the general pool.  

This is especially advantageous for investors from high-demand countries. Investors from China, Vietnam and India can get an EB-5 visa after I-526 approval even if these countries are facing backlogs in the general, unreserved visa pool. For example, as of June 2022, only Chinese investors that have an I-526 priority date of November 22, 2015 or earlier may obtain visas. But Chinese investors that invested in a TEA project face no backlog. EB-5 investors assigned to the visa set-aside categories will be able to obtain the EB-5 visa and immigrate to the US right away, shortening the wait time substantially. 

But these visas are limited. Only 10% of the annual limit is set aside for TEA projects, i.e., urban projects, which often are larger in scope, enjoy better locations, and have more institutional participation than typical rural projects. 


5. EB-5 investors can use the new concurrent filing policy to enjoy the benefits of the green card while waiting for approval, enjoying more flexibility and accelerating the process.   

In addition to creating new visa set-asides, the EB-5 Reform and Integrity Act also created the option for concurrent filing. This allows investors to file the I-526 petition simultaneously with I-485 application for adjustment of status. EB-5 investors who are already living in the United States under a non-resident visa file to adjust status. 

Filing the I-526 and I-485 petitions concurrently may enable EB-5 investors already in the United States to immediately change their immigration status to “pending adjustment.” They will thus be allowed to live, work, and study anywhere in the country, essentially enjoying the benefits of a green card while they wait for their EB-5 petition to be approved. This option also frees these investors from the work limitations often imposed by nonimmigrant visas, such as H-1B, E-2 and F-1 visas. Concurrent filing can be an effective strategy for foreign nationals whose nonimmigrant visas are nearing expiration. 

To file concurrently, the EB-5 investor’s priority date must be current for his or her country of chargeability. Thus, EB-5 investors facing visa backlogs should consider investing in a TEA project to obtain a reserved visa and avoid visa retrogression. 


6. All of Behring’s debt and equity investment options are open, but only for a limited time. 

Behring Regional Center is unique in offering investors multiple options for their EB-5 investments. Investors may choose among 3 different investment options depending on their own investment and immigration goals. Whichever option the investor chooses, they get institutional quality access to San Francisco Bay Area multifamily housing.  

Behring Regional Center loan-style investment options are fixed-term loans equipped with developer equity pledges to minimize risk to the investment. Unlike most EB-5 projects, the preferred distribution for the EB-5 investment has no fine print – it’s paid each year with no hidden fees. 

EB-5 investors also have the opportunity for premier access to a private real estate fund that offers investment terms usually reserved for institutional investors. EB-5 investors can choose to invest in preferred equity or common equity for the opportunity to earn higher returns in trophy-quality multifamily assets while still being eligible for the EB-5 green card. EB-5 investors are treated no differently than a private institutional investor because they are seeking a green card. 


7. You can blend your investment to customize your risk and return levels.  

EB-5 investors need not be stuck investing in projects no one wants (i.e., private or institutional investors) with higher risks and low returns. Because investors are seeking green cards for their families, they often find they have few investment options and are forced to accept terms with low returns and high fees. Behring Regional Center leads the EB-5 industry by providing investors with more options and more flexibility.  

Behring Regional Center offers EB-5 investors the opportunity to invest in the Legacy Fund. Behring’s Legacy Fund is already I-526 investor approved and I-924 exemplar approved. In Behring’s Legacy Fund, investors may invest preferred equity or common equity and enjoy higher returns on their EB-5 investment while being invested in lower-risk, institutional quality assets, like multifamily housing, in prime locations. Residential rental apartments provide a low risk, high cash flow option that is traditionally exclusive to private capital markets, especially institutions like pension funds, teachers’ unions, etc. EB-5 investors are treated no differently just because they are seeking a green card through their investment. 

Investors also have the option to blend their investments by choosing to invest a percentage in preferred equity and a percentage in common equity. Preferred equity investors can also convert their units to common equity. EB-5 investors have the same options as traditional private equity investors: after completing their immigration requirements, EB-5 investors may continue to invest in core real estate assets in the Bay Area for the opportunity to generate long-term wealth.  


8. EB-5 Loans are available and can help investors file faster to secure their set-aside visas.  

EB-5 investors may use unsecured loans to help finance their EB-5 investments. Investors often ask if using an EB-5 unsecured loan is permitted under EB-5 regulations. They have family and friends who want to help finance their EB-5 investment to obtain a US green card. However, gifting funds might not be the most tax efficient way. Or, other traditional methods, such as selling real property or stocks might not be ideal under current economic conditions. 

Historically, USCIS would not accept unsecured loans as a proper source of funds. Then, in November 2018, a federal court, in Zhang vs. USCIS, ruled that USCIS was wrong – that EB-5 law actually permits unsecured funds. The court’s decision was upheld when USCIS lost its appeal in October 2020 

The EB-5 Reform and Integrity Act of 2022 expressly codified the Zhang decision, removing all doubt as to whether investors may rely on unsecured loans. The RIA does not require that loans be secured by the investor’s assets. Instead, the EB-5 investor must show that the loan was made in good faith and not to circumvent lawful source of funds requirements, and that the lender must provide source of funds documentation, unless the lender is a bank. 

Behring’s affiliate, Unity Lender, offers qualified EB-5 applicants unsecured loans to help them finance their EB-5 investments. EB-5 investors may be eligible to borrow from $50,000 to $250,000 for one to five years. Rates vary depending on the applicant’s creditworthiness, principal amount and term of the loan.  


9. Investors can start the EB-5 visa application process immediately using Behring’s partial payment plans. 

EB-5 investors can file their I-526 petitions by making an initial capital contribution and funding the balance 6-9 months later. USCIS allows investors to file their petitions if they show they are invested or are actively in the process of investing.  

A partial payment plan can be used in situations where the investor needs additional time to close on the sale of property or a home equity loan but wants to file quickly to get a priority date and secure their spot in a TEA project to be eligible for a reserved visa. 

Of course, most projects will not or cannot offer an installment option because the project needs the funds to start the project. The few that do often won’t let the investor file, but merely “hold” a spot in a project for a limited time.  

Behring Regional Center pioneered this option for partial capital contributions in 2017. Many of Behring’s investors have used the partial capital contribution strategy to avoid deadlines and increases in the minimum investment amounts and have been approved by USCIS. 

Behring can offer this opportunity to EB-5 investors at no additional cost because its projects are already under construction and fully financed. There is no urgency for the funds to come all at once, so Behring can be flexible to help new investors. 

Contact Behring Team to Learn More About Court Decision and How You May File Your EB-5 Petition Now.