The EB-5 industry has spent the past several weeks debating a question that would have seemed unlikely only a few months ago:
Could USCIS make Adjustment of Status (AOS) significantly more difficult for EB-5 investors?
The discussion began after U.S. Citizenship and Immigration Services (USCIS) issued Policy Memorandum PM-602-0199 on May 21, 2026, followed by a public announcement stating that adjustment of status should be viewed as an “extraordinary discretionary benefit” rather than a routine pathway to permanent residence.
The policy immediately raised concerns among immigration attorneys, regional centers, and investors, particularly those relying on the EB-5 Reform and Integrity Act of 2022 (RIA), which introduced the popular concurrent filing process allowing eligible investors to file Form I-526E and Form I-485 at the same time.
While the initial reaction was alarm, the situation appears to be evolving differently than many had feared.
What Did USCIS Actually Say?
In Policy Memorandum PM-602-0199, USCIS reaffirmed its position that adjustment of status under Section 245 of the Immigration and Nationality Act is a discretionary benefit rather than an automatic entitlement. The memorandum emphasizes that, in general, intending immigrants should pursue immigrant visa processing through U.S. consulates abroad unless there are circumstances that justify adjustment within the United States. (USCIS AOS)
The language attracted attention because it appeared to elevate the standard for approving Form I-485 applications and suggested a stronger preference for consular processing than many practitioners had previously assumed. Several immigration law firms described the memorandum as a significant shift in how USCIS may exercise discretion in adjustment cases. (Greenberg Traurig)
For EB-5 investors, the concern was obvious.
Since the enactment of the RIA in 2022, concurrent filing has become one of the most attractive features of the program. Investors who are already in the United States may be eligible to file Form I-485 together with Form I-526E, potentially obtaining work authorization and travel permission while waiting for their green card process to continue.
If USCIS were to broadly discourage adjustment of status, many questioned whether concurrent filing would lose much of its practical value.
What Has Happened Since the Memo?
Despite the strong language used in the memorandum, there has been little evidence so far that USCIS is systematically denying or freezing EB-5 adjustment applications.
Many immigration attorneys report that while there may have been increased scrutiny in certain cases, they have not observed a widespread pattern of denials involving EB-5 investors solely because they chose adjustment of status. (harrislawpa.com)
In fact, several practitioners have argued that the legal framework supporting EB-5 adjustment remains intact.
Attorney analyses published after the memorandum note that Congress specifically addressed EB-5 adjustment filings through INA §245(n), which was added by the EB-5 Reform and Integrity Act. The provision expressly contemplates adjustment applications filed concurrently with or after an EB-5 petition when visa numbers are available. (harrislawpa.com)
As a result, many lawyers believe USCIS would face significant legal challenges if it attempted to use discretionary authority to effectively eliminate a process that Congress specifically authorized.
Why Some Attorneys Believe EB-5 May Be Different
Although USCIS has not announced any formal exemption or special treatment for EB-5 investors, many practitioners argue that EB-5 cases naturally present strong positive discretionary factors.
Unlike many other immigration categories, EB-5 investors typically bring substantial capital investment into the United States, support business development, and contribute to job creation. In addition, investors with approved Form I-526E petitions have already undergone extensive review regarding source of funds, eligibility, and project compliance.
Several legal commentators have therefore suggested that EB-5 investors may be among the strongest candidates for a favorable exercise of discretion under the new framework. (harrislawpa.com)
At the same time, attorneys caution that investors should not assume approval is automatic. The memorandum appears to signal that USCIS may place greater emphasis on overall equities, immigration history, status maintenance, and discretionary considerations when reviewing adjustment applications. (JD Supra)
The Bigger Issue: Visa Adjudications Before September 30
While much public attention has focused on whether adjustment of status remains available, many industry observers believe a different issue may be more important.
On May 21, 2026, the American Immigration Lawyers Association (AILA) sent a letter to USCIS urging the agency to prioritize adjudication of pending I-485 applications filed by approved EB-5 investors in reserved visa categories before the end of Fiscal Year 2026 on September 30. (AILA)
The letter reflects growing concern that USCIS and the Department of State may not process enough visa-ready cases before the fiscal year ends.
Reserved visa categories created under the Reform and Integrity Act include:
- Rural projects (20%)
- High Unemployment Area projects (10%)
- Infrastructure projects (2%)
These reserved visa allocations have become a critical part of modern EB-5 planning. If eligible investors are approved quickly, the categories can provide significant immigration advantages. However, if adjudications move too slowly, available visa numbers may not be fully utilized.
This concern is not hypothetical. USCIS previously acknowledged dedicating resources to process EB-5 reserved-category adjustment cases after visa availability issues arose in earlier fiscal years. (AILA)
For many practitioners, the question is therefore shifting away from “Will USCIS allow EB-5 adjustment of status?” and toward “Can USCIS adjudicate enough visa-ready EB-5 cases before the end of the fiscal year?”
What Should Investors Watch Going Forward?
As of July 2026, there is no public evidence that USCIS has created a formal EB-5 exemption from the May 21 policy memorandum. Likewise, there is no evidence that the agency has launched a broad campaign to deny EB-5 adjustment applications.
The most reasonable interpretation appears to be that adjustment of status remains available, but USCIS may apply greater discretionary analysis when reviewing cases. At the same time, the industry’s immediate concern may be less about eligibility and more about processing speed.
For investors pursuing rural or other reserved-category projects, future developments may depend not only on immigration policy but also on whether USCIS and the Department of State can efficiently move visa-ready cases through the system before annual visa allocations are exhausted.
For now, most practitioners continue to view EB-5 adjustment of status as viable. The larger challenge may be ensuring that eligible investors receive approvals quickly enough to benefit from the visa numbers Congress has already reserved for them.