US Community Survey Reveals New TEA Designations for EB-5
The latest data released by the American Community Survey (ACS) demonstrated interesting findings regarding the targeted employment areas of the EB-5 Program. We tell you all the details here.
According to the data provided by the study, if one considers what has happened in the last 5 years and the variables that have emerged in this period for the measurement of what is considered an area of objective employment, many of the areas now considered as TEA should no longer be.
Specifically, the director of policy research and data analysis at IIUSA –the organization that authored the report– Lee Y. Li, stated that “The latest data from the ACS changed the benchmark of qualifying an area of high unemployment; therefore, some areas now no longer qualify as TEA, while other areas present new opportunities for TEA projects.”
Regarding the last 5 years, the ACS estimates revealed that the national unemployment rate increased between 0.10% and 5.50% between 2017 and 2021. In this sense, the determination of contiguous census tract or census tracts as an area of high EB-5 unemployment has risen to 8.25%. According to the Bureau of Labor Statistics (BLS) Local Area Unemployment Statistics (LAUS).
Additionally, the 2022 national average unemployment rate was 5.35%, implying the EB-5 High Unemployment Area designation for census tracts at 8.03%.
The findings show that about 37,690 districts qualify as areas of high unemployment, as long as the ACS’s five-year estimates are used. Also, 36,747 census tracts were identified that meet the high unemployment area criteria and qualify as TEA, according to LAUS 2021 annual data with the shared census methodology.
What extensions qualify for the EB-5 TEA designation?
The report highlights the importance of using the “correct” data source for determining Target Employment Areas (TEAs), as not all areas qualify as a high unemployment area under other data sources. The document shows that almost 43,000 census sections, that is, half the country, qualify as an area of high unemployment using ACS or LAUS data.
Lee Y. Li reminded that if an area changes from TEA to no longer designated as TEA, the minimum investment amount of EB-5 projects in that area will be $1,050,000 and no more than $800,000. “EB-5 investors who invested in such projects will no longer enjoy the EB-5 visa numbers that are reserved for TEA projects.”
New TEA opportunities in other sectors
The report found that the distribution of high-unemployment areas across the country changed and revealed TEA opportunities in different communities, according to new ACS unemployment data.
According to the report, Mississippi overall has the highest percentage of TEA census tracts with 42% of tracts in the state qualifying for a high unemployment area, 10% qualifying for a rural area and 32% qualifying for both.
The report found that Vermont offers the best opportunities for rural EB-5 projects with 72% of census tracts qualifying as rural, the most of the 50 states. New Mexico and Nevada offer opportunities for urban TEA projects with 77% and 76% of census tracts qualifying as high unemployment areas.
In “hotbed” areas like California, 70% of census tracts qualify as TEA, with 67% for New York and 59% for Texas.
Process to obtain the Green Card in the EB-5 Program
Currently, to apply for a Green Card for investment, the first step is to locate a project with the requirements established in the program. Then, the investor must hire an immigration attorney to apply to enter the program, completing Form I-526.
In this step, the interested party must make an investment of between USD 800,000 and USD 1,000,000, in addition to making the origin of the capital used transparent, for which they must have a legal source and route of funds.
The next step is once the first form is approved, to present a second document known as Form I-485 that will allow obtaining immigration status to reside in the USA while obtaining the Green Card.
Once this period has elapsed, the investor is now in a position to adjust his immigration status from “non-immigrant” to “permanent resident”. Procedure that is recommended to carry out through a lawyer.
The average time to obtain a Green Card is 2 to 3 years. Although this period can be reduced if it is a project of national interest or located in a rural area.
EB-5 Financial Return on Investment
EB-5 investors can be sure that the capital used will be fully returned, offering increasingly attractive rates of return within the market.
The process begins with the capital investment of 800,000USD. Then, throughout the entire process, the investor will receive fixed annual returns in dollars.
And finally, once the project selected for the program is finished, the investor will be granted a distribution of benefits in addition to what has already been obtained.
Investing in BAI Capital is investing in the United States
With a presence in the real estate sector in the states of Florida, Texas and New York, BAI Capital specializes in generating value from land acquisition to the development of mixed-use projects. Such as residences for the elderly, student residences, multifamily buildings for rentals and mixed use that include condos and retail.
Our mission is to safeguard the capital of the partners and the own capital under the minimum risk exposure. With a safe development and going through all the stages. Purchase of land, adjustment of urban zoning, commercial vision in architectural development and management of building permits. Then, we take charge of the capitalization, construction and exit with return of the capital and profits to the partners.
In this way, we guarantee fixed and stable returns for our client portfolio. In addition to having a confidential work protocol with encrypted web forms. Use of protected personal data and private meetings with our agents throughout Latin America.