On May 21, 2026, U.S. Citizenship and Immigration Services issued Policy Memorandum PM-602-0199, titled “Adjustment of Status is a Matter of Discretion and Administrative Grace, and an Extraordinary Relief that Permits Applicants to Dispense with the Ordinary Consular Visa Process.” The memo instructs USCIS officers to treat Adjustment of Status (“AOS”) as “extraordinary” relief, available only where an applicant demonstrates what the Board of Immigration Appeals has described as “unusual or even outstanding equities.” Matter of Blas, 15 I&N Dec. 626, 641 (BIA 1974; A.G. 1976).
Green Card Fund has been reviewing this development closely since its release. Much remains unsettled: the memo is general in scope, category-specific guidance has not yet been issued, and litigation challenges are already being organized. What we want to provide today is a clear, candid account of what the memo says, why we believe EB-5 investors occupy unique legal ground, what the industry is doing, and where we stand.
We will update our investors and the broader community as the situation develops. If you have questions about your specific case, we urge you to consult qualified EB–5 immigration counsel immediately.
What the Policy Memo Says
PM-602-0199 does not amend the text of the Immigration and Nationality Act. Section 245(a) of the INA, 8 U.S.C. § 1255(a), the statutory provision authorizing AOS, remains unchanged. What the memo does is signal how USCIS officers are expected to exercise their discretionary authority when adjudicating AOS applications.
The memo’s core guidance: where consular processing is available to an applicant, their choice to seek AOS instead is an “adverse factor” in the discretionary analysis, one that must be overcome by a “showing of unusual or even outstanding equities.” Matter of Blas, 15 I&N Dec. at 641. The absence of adverse factors, by itself, is not sufficient. Even applicants maintaining lawful nonimmigrant status in a dual-intent category (such as H-1B or L-1) are told that such status is “not sufficient, on its own, to warrant a favorable exercise of discretion.” PM-602-0199 at 5 n.20.
Critically, the memo warns that USCIS “will carefully review the various pathways to discretionary adjustment of status as well as discrete populations of aliens applying for adjustment of status” and may issue category-specific guidance. This signals the possibility of EB-5-specific guidance to come, underscoring the urgency of the industry’s response.
It is also worth noting that even the foundational authority the memo invokes, Matter of Blas and related precedents, addressed individual, fact-specific discretionary determinations, not categorical presumptions against entire classes of applicants. Stretching case-by-case holdings into a blanket adverse presumption is a legal leap that litigation will scrutinize.
Why EB-5 Investors Are Not the Target
The stated rationale for PM-602-0199 is concern that nonimmigrants are using lawful US admission as a back door to permanent residence, circumventing the consular process Congress intended. That is a legitimate policy concern when applied to individuals who entered with undisclosed immigrant intent and subsequently attempt to adjust status without ever leaving.
EB-5 investors are a categorically different population.
- They have been exhaustively vetted. The post-RIA EB-5 process is one of the most rigorous in the US immigration system. Investors undergo source-of-funds scrutiny under Matter of Soffici, 22 I&N Dec. 158 (Assoc. Comm’r Examinations 1998); project pre-approval through the I-956F process under the EB-5 Reform and Integrity Act of 2022, Pub. L. 117-103, Div. BB (March 15, 2022) (“RIA”); background checks; and securities disclosure obligations. These are not individuals slipping through cracks. They are among the most carefully screened applicants in the immigration system.
- Hold dual-intent visas. A substantial share of domestic EB-5 investors are here on H-1B, L-1, or O-1 visas, categories Congress specifically designated as “dual intent,” meaning the holder may simultaneously maintain nonimmigrant status and harbor immigrant intent. This is not a loophole; it is an explicit congressional design. PM-602-0199 itself acknowledges (at footnote 20) that “applying for adjustment of status is not inconsistent with simultaneously maintaining nonimmigrant status in a category with dual intent.” Congress created these categories precisely for people in this position. Playing by the rules cannot itself become an adverse factor.
- Congress built concurrent processing into the EB-5 statutory framework. This is the most significant legal point, and we address it in detail in the next section.
The Statutory Tension: Congress Spoke Clearly in the RIA
The EB-5 Reform and Integrity Act of 2022 (RIA), enacted as Division BB of Pub. L. 117-103 on March 15, 2022, was the most comprehensive overhaul of the EB-5 Immigrant Investor Program since its creation under the Immigration Act of 1990. Passed with bipartisan support and reauthorizing the Regional Center program through September 30, 2027, the RIA did not merely tolerate concurrent processing, it codified it.
- Congress created INA § 245(n) specifically for EB-5 concurrent filing. This is the most direct statutory argument against applying PM-602-0199 to EB-5 investors. Section 102(d) of Division BB of the RIA added a new subsection to the INA: INA § 245(n), 8 U.S.C. § 1255(n), which explicitly provides for concurrent filing of an I-485 application for adjustment of status where approval of an EB-5 petition would make a visa number immediately available. Congress did not merely leave concurrent processing as an incidental benefit of INA § 245(a) discretion. Congress wrote a new provision of law specifically to authorize it for EB-5 investors. A policy memo that treats EB-5 concurrent processing as a presumptive adverse factor is in direct tension with a congressional enactment that created the pathway.
- The RIA’s visa set-asides were created to address retrogression, and they now make concurrent filing viable. The RIA established three new visa set-aside categories under INA § 203(b)(5), as amended: Rural (20% of annual visas), High Unemployment Area (10%), and Infrastructure (2%). Congress created these categories primarily to relieve the severe retrogression that had accumulated in the EB-5 program, where demand from high-volume source countries had created per-country wait times stretching years or longer. At present, these set-aside categories are current, meaning petitioners can simultaneously file their I-485 and I-526E (and optionally file their I-131 and I-765). The concurrent processing pathway Congress wrote into the RIA depends on that AOS channel functioning as designed. The stakes of that dependency are not abstract: on May 21, 2026 — the same day USCIS issued PM-602-0199 — AILA wrote urgently to USCIS reporting that despite nearly 15,000 reserved visa numbers allocated since FY 2023, fewer than 2,000 have been used. Under the RIA, unused set-aside visas carry over to the same category for one additional fiscal year; after that second year any remaining unused numbers flow into the unreserved pool, lost to reserved category investors permanently. AILA estimates that over 10,000 reserved visa numbers have already been lost to reserved category applicants this way, the direct result of USCIS failing to adjudicate pending I-485 applications before fiscal year deadlines.
- USCIS’s own Policy Manual reflects this intent. USCIS Policy Manual, Volume 6, Part G governs EB-5 adjudications under the RIA framework and explicitly provides that investors in the US on valid nonimmigrant status may file I-526E concurrently with I-485 when visa numbers are available. A policy memorandum that renders this pathway “extraordinary” in practice, even for investors who meet every statutory requirement, creates a direct conflict with the congressional design of the post-RIA program. As leading immigration attorneys noted this week, it is difficult to reconcile this memo with the agency’s own published guidance on why AOS exists and how Congress intended it to function.
INA § 245(n), added by Congress in 2022 specifically for EB-5 investors, authorizes concurrent filing of adjustment of status applications where an EB-5 petition approval would make a visa number available. A USCIS policy memo cannot treat as “extraordinary” what Congress wrote into statute as an express right.
The Legal Landscape for Challenge
The legal landscape for challenging USCIS policy interpretations changed significantly with the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). Under the now-overruled Chevron doctrine, courts gave substantial deference to agency interpretations of ambiguous statutes. Loper Bright replaced that standard with de novo judicial review: courts now independently interpret the statute rather than deferring to the agency. Courts evaluating PM-602-0199 will not ask whether USCIS’s interpretation of § 245(a) is merely “reasonable”; they will ask what the statute actually requires. Given INA § 245(n) and the RIA’s legislative history and structure, the post-Loper Bright standard is favorable terrain for challengers.
A separate and procedurally distinct basis for challenge lies in the Administrative Procedure Act (“APA”), 5 U.S.C. § 553. The APA generally requires federal agencies to undertake a public notice-and-comment rulemaking process before making substantive policy changes that affect applicants’ legal rights. PM-602-0199 was issued as a unilateral internal directive with no public notice, no comment period, and no signature of an individual accountable official. If a court concludes the memo effects a substantive change in adjudication standards rather than merely restating existing law, the absence of APA process provides an independent basis for injunctive relief. Courts have moved quickly on APA challenges to immigration policy directives in recent years, and this memo presents a textbook target for that type of challenge.
The Industry is Moving Quickly
The organized EB-5 industry response is already underway. IIUSA, the industry association for the Regional Center program, has acknowledged the development and is working with legal counsel on a comprehensive analysis. IIUSA leadership has communicated its commitment to briefing members and advocating forcefully on behalf of the industry.
On the litigation front, multiple leading EB-5 immigration law firms are already coordinating on a federal District Court challenge, with industry non-profit organizations as likely plaintiffs. We expect additional firms to join these efforts as the matter develops. The litigation theory centers on the arguments outlined above: INA § 245(n) demonstrates that Congress specifically authorized EB-5 concurrent filing; a policy memo cannot foreclose what a statute expressly opens; and the absence of APA notice-and-comment rulemaking provides an independent procedural basis for relief.
- A critical point for investors with applications already filed: The general principle under the APA is that new agency policy should not be applied retroactively to pending cases filed in reliance on prior policy. Investors who have already submitted an I-485 Adjustment of Status application have a strong argument that PM-602-0199 cannot govern the adjudication of their pending case. This protection is not absolute and will need to be asserted with counsel, but it is a meaningful and well-established principle. If you have a pending I-485, consult your immigration attorney immediately about how to preserve and document your position.
The Human Reality Behind the Legal Questions
Behind every EB-5 filing is a person with a life built here. An engineer on an H-1B who has spent years contributing to a US company, raising a family, paying taxes, and investing hundreds of thousands of dollars through a program Congress designed precisely for people like them. For that engineer, the filing receipts for a concurrent I-526E and I-485 do more than begin a legal process: they provide an immediate right to remain in the United States, a protection that matters enormously if a layoff cuts their H-1B grace period to 60 days. Families who structured their financial and personal plans around the concurrent processing pathway the RIA made available.
These investors are not the people this policy seeks to address. They are not individuals who slip into the shadows after a denial. They are among the most vetted, most committed, and most rule-following members of our immigrant community, people who have done everything right, following every demanding step of a rigorous process, at significant personal and financial cost. Following the rules cannot, and should not, itself become a strike against you.
We say this not to be critical of the administration, whose stated goals of an orderly and fair immigration system is not wrong. We say it because the application of this memo to EB-5 investors, if it occurs, would harm precisely the people the EB-5 program was designed to benefit, and would undercut a statutory framework Congress carefully constructed just four years ago.
Where Green Card Fund Stands
While this is an evolving situation, at Green Card Fund we believe the following at the present time:
- What is still unknown: How PM-602-0199 will be applied to EB-5 cases specifically. Whether forthcoming USCIS category-specific guidance will carve out EB-5 investors. How courts will rule if and when litigation proceeds. We are not going to speculate beyond what the facts support.
- What we know: INA § 245(n) exists. Congress created it specifically for EB-5. The APA provides a procedural basis for challenge independent of the statutory arguments. EB-5 investors with pending I-485 applications have a meaningful non-retroactivity argument. The industry’s legal and advocacy response is organized, serious, and growing.
- What Green Card Fund is committed to: We are actively monitoring this situation in coordination with leading EB-5 immigration counsel. We are engaged with industry organizations and following the litigation developments closely. We will provide timely updates as the situation evolves, and we are committed to pursuing every available avenue to protect the interests of our investors and the EB-5 regional center community.
EB-5 investors are among the most committed, compliant, and carefully vetted participants in the US immigration system. They invested in this country under a program Congress reformed and reauthorized. We stand with them, and we will work tirelessly to ensure that the legal protections Congress provided are honored.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Immigration law is complex and fact-specific. If you have questions about how this development may affect your individual petition or application, please consult a qualified EB-5 immigration attorney. Green Card Fund does not provide legal services.
Key sources: USCIS PM-602-0199 • INA § 245(a) and § 245(n) • INA § 203(b)(5) • EB-5 Reform & Integrity Act of 2022 (Pub. L. 117-103, Div. BB) • Matter of Soffici, 22 I&N Dec. 158 (1998) • Matter of Blas, 15 I&N Dec. 626 (BIA 1974) • Loper Bright, 603 U.S. 369 (2024) • APA, 5 U.S.C. § 553 • USCIS Policy Manual, Vol. 6, Part G • IIUSA • AILA Letter to USCIS (May 21, 2026)
