EB-5 spent the 1990s as a small program with large holes in its rulebook. Congress created it in the Immigration Act of 1990. Ten thousand visas a year. A $1,000,000 investment floor, halved to $500,000 inside a Targeted Employment Area. Ten full time jobs from every investor. Hardly anyone filed, and then in 1998 the Immigration and Naturalization Service published a set of precedent decisions that invalidated deal structures thousands of investors had already signed, which stalled adjudication of those cases for years while Congress and the federal courts cleaned up after it.
What the 1990 statute asked for
Two obligations sat at the heart of the bargain. Place capital at risk in a new commercial enterprise. Create ten full time jobs for qualifying US workers within roughly two years, holding a green card that carried conditions for the first 24 months while you did it. Those bones survive today in 8 U.S.C. 1153, the employment based preference statute. Dollar amounts moved. Architecture did not.
Detail was the problem. The implementing regulation, 8 CFR 204.6, took effect in 1991 and had to define terms the statute left open, starting with what qualified as a new commercial enterprise and what "at risk" actually meant. Full time still means at least 35 hours a week under 204.6(e). That subsection still refuses to let an investor add two part time roles together to reach the bar, although a genuine job share, where two employees split one full time position, does count.
Past the regulation there was very little. Field officers worked from internal memoranda that investors never saw. Two competent lawyers could read the same paragraph and build two incompatible deals, and for several years both would get approvals.
The 1992 pilot and the arrival of Regional Centers
Section 610 of a 1992 appropriations act created the Regional Center Pilot Program. It carved a 300 visa annual set aside out of the 10,000, a figure Congress raised to 3,000 in 1997. Accounting was the real innovation. A designated center could claim jobs created indirectly, through an economic input output model, instead of listing employees on a payroll register, so construction spending and tenant activity became countable. Almost every EB-5 dollar raised since has moved through that channel, a shift traced in EB-5 in the 2000s and 2010s.
Nobody built oversight to match. Designation letters were thin. Nothing required a center in that decade to file an annual statement or open its books to an auditor, both of which are routine obligations now.
1998: the ground moved under filed petitions
The INS Associate Commissioner for Examinations issued precedent decisions in 1998 that rewrote how the program worked in practice. Matter of Ho held that an investor needed a comprehensive and credible business plan, submitted with the petition rather than promised for later. Matter of Izummi went after redemption arrangements, reasoning that capital an investor could recover on a fixed schedule was never genuinely at risk, and that money had to reach the enterprise doing the hiring. Matter of Soffici examined an investor who bought an existing hotel and treated the purchase price as qualifying capital.
Each holding was defensible standing alone. Application was the scandal.
INS took the 1998 standards and used them against petitions filed years earlier, including cases where the I-526 had already been approved and the family was filing to remove conditions. People who had followed their lawyer's advice, wired the money and moved their children into American schools were told the structure had never qualified in the first place.
Why did the freeze last so long?
Adjudication of affected cases largely halted while litigation ran. Investors sued. Congress heard from them and passed relief in 2002 that let many pre-1998 filers keep their status and gave them a fresh window to satisfy the job requirement. In 2003 the Ninth Circuit, in the Chang litigation, rejected retroactive application of the new interpretations to petitions filed under the old understanding. Some families waited close to a decade for a final answer.
Volume collapsed. A program sized at 10,000 visas a year was issuing a few hundred, and reputational damage outlasted the legal problem by years. That long tail is one reason critics still reach for 1990s examples, as the standing criticisms of EB-5 show.
How the 1990s show up in a 2026 filing
Documentary standards for business plans trace straight back to Matter of Ho, and USCIS expectations now sit in Volume 6, Part G of the USCIS Policy Manual instead of unpublished memoranda. At risk remains the pivot on which any petition turns, though the EB-5 Reform and Integrity Act of 2022 swapped the old open ended sustainment question for a defined two year period. Retroactivity, the wound of 1998, explains why Congress eventually wrote express protection into the statute.
That protection matters right now. Regional Center authorization runs to 30 September 2027, and 8 U.S.C. 1153(b)(5)(S), titled "Protection from expired legislation," preserves petitions filed on or before 30 September 2026 even if the program lapses. Investors in 1998 had nothing of the kind. The 2022 Reform and Integrity Act is where the modern guardrails were written down.
Money moved too. The $1,000,000 and $500,000 pair from 1990 survived until 2019, then went through a rule and a court reversal covered in the 2019 modernization story. Today the figures are $800,000 in a Targeted Employment Area and $1,050,000 outside one, with a first statutory inflation adjustment due 1 January 2027.
Read the documents before the pitch deck
For someone about to commit $800,000, the useful lesson from that decade is narrow. Paper governs. Ask for the limited partnership agreement and for the loan documents between the new commercial enterprise and the developer, then read what happens to your capital if the project misses its construction schedule by two years. Any promise of a guaranteed return date is the same defect Izummi identified in 1998, wearing newer clothes.
Check the filing sequence as well, because investors regularly get it backwards. A Regional Center must file Form I-956F for the specific offering before you may file Form I-526E. USCIS must approve that I-956F before your petition can be approved, yet waiting for the approval before you file only surrenders a priority date you could have held. Investors running their own business without a center still use Form I-526.
Then ask a question that would have been meaningless in 1996. What happens to my capital and my petition if authorization lapses before I am finished?