USCIS Issues New Policy Memo on Adjustment of Status: What EB-5 Investors Need to Know Now

Policy Memorandum PM-602-0199 | Issued May 21, 2026 | Announced May 22, 2026 | Effective Immediately

On May 21, 2026, USCIS issued Policy Memorandum PM-602-0199, declaring that Adjustment of Status is “a matter of discretion and administrative grace” and should be treated as “extraordinary relief.” The memo instructs officers to conduct an independent discretionary review of every pending Form I-485 — even where the applicant meets every statutory eligibility requirement.

For EB-5 investors, this memo is significant but does not end adjustment of status as a pathway. Congress enacted specific statutory protections for EB-5 investors that limit how far this policy can reach. However, the practical reality — already confirmed by RFEs and interview reports immediately following the memo’s release — is that adjustment filings must now be prepared as serious legal and discretionary submissions. Being eligible is no longer enough.

Adjustment of Status and Consular Processing are two entirely separate and distinct legal pathways. USCIS conflates them throughout this memo.

USCIS frames the choice to adjust status inside the United States as inherently suspect — because consular processing was “available.” That is legally wrong. Congress created Adjustment of Status as an independent statutory right. You cannot “adjust status” at a consulate; the two processes are legally and procedurally distinct. For EB-5 investors specifically, Congress went further: through INA § 245(n), it expressly authorized concurrent adjustment filings. USCIS cannot penalize investors for using a procedure Congress created for them.

YOUR STATUTORY PROTECTIONS AS AN EB-5 INVESTOR

Before turning to the new ground-level developments, it is essential to understand why EB-5 investors are in a stronger legal position than most other adjustment applicants under this memo.

INA § 245(n) — Congress Specifically Authorized EB-5 Concurrent Adjustment

Added by the EB-5 Reform and Integrity Act of 2022, INA § 245(n) states that an EB-5 investor’s I-485 is properly filed whether submitted concurrently with or after the I-526E petition when visa availability conditions are met. USCIS cannot treat this congressionally authorized filing posture as an adverse discretionary factor. Any attempt to do so is legally vulnerable.

INA § 245(k) — Employment-Based Forgiveness Provision

INA § 245(k) allows employment-based applicants — including EB-5 investors — to remain eligible for adjustment despite limited periods of unauthorized employment, failure to maintain status, or other status violations, provided the aggregate period after last lawful admission does not exceed 180 days. USCIS discretion cannot erase what Congress has already forgiven. If § 245(k) applies to your situation, it must be calculated carefully and documented affirmatively.

The Economic Benefit Argument

Following the memo’s release, USCIS stated publicly that applicants who provide an “economic benefit” or are otherwise in the “national interest” will likely be able to continue on their current path. EB-5 investors are among the clearest examples of this category: the entire statutory purpose of the EB-5 program is to bring capital to the United States and create jobs for U.S. workers. This is not a safe harbor — it is not a regulation or binding guidance — but it is a meaningful signal that must be affirmatively leveraged in every EB-5 adjustment filing.

WHAT IS ALREADY HAPPENING: REPORTS FROM MAY 22, 2026

Within hours of the memo’s public announcement, two significant developments were reported by practitioners across the country. These are not hypothetical — they reflect the immediate operational reality of PM-602-0199.

⚠️ Development 1: RFE Issued on May 22, 2026 — Same Day as the Announcement

A Request for Evidence on a pending Form I-485 was reportedly issued on May 22, 2026 — the same day USCIS publicly announced PM-602-0199. This confirms that USCIS is applying the new framework to already-pending cases immediately, with no transition period and no grandfathering rule.

The RFE contained two demands that directly reflect the memo’s framework. EB-5 investors with pending I-485 applications should treat these as the template for what USCIS will require:

RFE Demand 1 — Positive Discretionary Factors

To establish eligibility for adjustment of status, the applicant must demonstrate there are positive factors in the case such that Form I-485 warrants a favorable exercise of discretion. USCIS identified the following factors as relevant:

• Family ties within the United States
• Residence of long duration in the U.S. (particularly when residence began at a young age)
• Hardship to the applicant or applicant’s family if relief is not granted
• Education
• Fluency or proficiency in English
• Service in the U.S. armed forces
• A history of employment
• The existence of business or property ties
• Evidence of value and service to the community (e.g., religious organizations, volunteer organizations)
• Paying taxes
• Proof of rehabilitation if a criminal record exists
• Any other evidence demonstrating that a favorable exercise of discretion is warranted

Instruction from the RFE: “Please provide evidence that you would like USCIS to consider when determining whether a favorable exercise of discretion in your case is appropriate.”

RFE Demand 2 — Public Charge / Financial Evidence

To be eligible for adjustment of status, the applicant must demonstrate they are not likely to become a public charge. USCIS requested proof of income, including:

• 2025 federal income tax return
• A letter from employer stating (1) job title and (2) salary
• Bank statements
• W-2s
• Any other evidence the applicant wishes to provide

What This RFE Means for EB-5 Investors Specifically

• Demand 1 is new and unprecedented in routine I-485 processing. For EB-5 investors, it is an opportunity, not merely a burden. The discretionary factors USCIS lists — business ties, history of employment, property ties, community value, tax compliance — are factors EB-5 investors can document in depth. Crucially, the EB-5 program’s economic benefit purpose is itself a powerful discretionary argument that goes beyond this list.
• Every EB-5 I-485 filing should now include a legal brief affirmatively documenting: the capital investment, the project’s job creation, the source and path of funds, tax compliance, business activity, property ties, community engagement, and why the investor’s adjustment serves the purpose of the EB-5 program.
• Demand 2 is a standard financial self-sufficiency showing. EB-5 investors should be well-positioned to satisfy this, but financial documentation must be current, complete, and U.S.-sourced where applicable.
• The RFE response deadline was August 12, 2026. If you receive an RFE, contact our office immediately. Deadlines are firm and responses require substantive legal preparation.

⚠️ Development 2: New Questions Asked at AOS Interviews — May 22, 2026

At a marriage-based AOS interview on May 22, 2026 — the day of the announcement — the USCIS officer confirmed that four new questions had been added to the interview protocol specifically in response to PM-602-0199. While first reported in a marriage-based context, the memo applies to all I-485 applications. EB-5 investors with pending or upcoming interviews should be fully prepared to answer all four.

How EB-5 Investors Should Approach These Four Questions

• Question 1 — Why AOS instead of Consular Processing? For EB-5 investors, the answer is grounded in statute. INA § 245(n) expressly authorizes concurrent EB-5 adjustment filings. The investor chose a congressionally created pathway for a congressionally created program. The answer should also include practical reasons: lawful presence, investment activity, employment authorization, family in the U.S., business obligations, and disruption to the investor’s operations or family if required to process abroad.
• Question 2 — Factors preventing Consular Processing? EB-5 investors may have legitimate barriers: ongoing business responsibilities, dependent children enrolled in U.S. schools, pending EAD-dependent employment, advance parole reliance, or investment monitoring obligations. Document these concretely. Answers must be truthful and specific — vague or evasive responses create unnecessary risk.
• Question 3 — Family in home country? This probes whether the investor has ongoing ties abroad that might make consular processing practical. Answer honestly and use the opportunity to also affirm the investor’s substantial ties and commitments in the United States — business interests, property, family members here, community involvement.
• Question 4 — Why did you not return when authorized stay expired? This is the most sensitive question and is directly designed to identify unlawful presence or overstays. EB-5 investors should review their full entry and status history with counsel before any interview. If there is any gap in authorized status, INA § 245(k) may provide protection — but the answer must be carefully and truthfully framed. Do not improvise this response.

HOW TO PREPARE YOUR EB-5 I-485 UNDER THE NEW STANDARD

An EB-5 adjustment filing must now function as two documents in one: a statutory eligibility submission and a discretionary merits brief. The forms alone are no longer sufficient. The following framework reflects both the RFE language above and the interview questions now being asked.

Part 1: Statutory Foundation — Cite Your Specific Protections

• Cite INA § 245(n) expressly where concurrent or post-I-526E adjustment is involved. State that the filing posture is congressionally authorized and cannot be treated as an adverse factor.
• Calculate and document INA § 245(k) if any gap in status, unauthorized employment, or other limited violation exists. Do not leave this unaddressed.
• Confirm visa availability, admissibility, and I-526E status or approval in the cover letter.

Part 2: Economic Benefit — The EB-5 Advantage

• Document the investment: amount invested, project type, regional center or direct investment, deployment status.
• Document job creation: methodology, jobs created or to be created, economic impact of the project.
• Document business and property ties: investments, U.S.-based business activity, real property ownership, ongoing obligations that require U.S. presence.
• Explain why the investor’s adjustment is consistent with — and serves the purpose of — the EB-5 program.

Part 3: Positive Discretionary Factors — Address the RFE Template Directly

• Family ties in the United States: spouse, children, extended family, dependents.
• Length and continuity of U.S. residence: dates, visa categories, maintained status.
• Hardship to the investor or family if required to consular process: disruption to employment, children’s schooling, business operations, medical care, housing.
• Tax compliance: U.S. federal and state tax returns, FBAR filings where applicable.
• Employment history: authorized employment, business ownership, professional activities.
• Community ties: organizations, religious institutions, volunteer work, philanthropic activity.
• English proficiency, education, professional credentials.

Part 4: Prepare for the Interview Questions in Advance

• Draft written answers to all four interview questions and review them with counsel before the interview date.
• Prepare a clear, truthful narrative for Question 1 (why AOS) rooted in § 245(n) and practical circumstances.
• Review full entry and status history to prepare an accurate, well-framed answer to Question 4. If § 245(k) is relevant, confirm its application before the interview.
• Do not attend an EB-5 AOS interview without pre-interview preparation with your attorney.

I-526E PROCESSING SELECTION: A STRATEGIC DECISION

Part 6 of Form I-526E requires a selection between immigrant visa processing abroad and adjustment of status. Under PM-602-0199, this selection carries more weight than it did before. It is not irrevocable, but it affects routing, timing, and flexibility.

General Strategic Guidance

• Selecting consular processing preserves NVC routing upon I-526E approval. If you later enter the U.S. and become eligible, INA § 245(n) may still permit adjustment. This preserves more flexibility.
• Selecting adjustment of status may be appropriate if you are already in the U.S. with a strong status history and are ready to file I-485 concurrently. However, if you later need consular processing, the case may not route automatically to the NVC, creating additional procedural steps and delay.
• The selection should be made deliberately, after analyzing your current visa status, travel plans, family circumstances, visa availability, potential retrogression, and the current policy environment. Do not treat it as a default checkbox.

IF YOUR I-485 IS ALREADY PENDING

The RFE reported above confirms that USCIS is applying PM-602-0199 to already-pending I-485 applications with no grandfathering rule. If you have a pending EB-5 adjustment application, take the following steps now:

• Begin assembling your discretionary evidence package immediately using the RFE template above. Do not wait for an RFE to arrive.
• Compile updated financial documentation: 2025 tax return, current employer letter (title and salary), bank statements, W-2s.
• Preserve and organize all evidence of reliance on the pending application: EAD approvals, advance parole, work authorization records, school enrollment, housing decisions, business decisions, travel records.
• If you have an upcoming interview, contact our office immediately for pre-interview preparation specific to these four new questions.
• If you receive an RFE or Notice of Intent to Deny, contact our office the same day. Response deadlines are firm and substantive legal preparation is required.
• Investors who filed under INA § 245(n) have particularly strong reliance arguments. Preserve all records showing the concurrent filing was statutorily authorized.

LEGAL STATUS OF PM-602-0199 AND ANTICIPATED CHALLENGES

This memo is a policy directive, not a statute or regulation. It did not go through formal notice-and-comment rulemaking. It does not repeal INA § 245(n), INA § 245(k), or the EB-5 Reform and Integrity Act. The legal challenges already being discussed across the immigration bar include:

• Statutory overreach: USCIS cannot reclassify a congressional right as extraordinary relief by internal memo.
• Misapplication of case law: The cited cases involve fraud, criminal conduct, and removal proceedings — not the routine employment-based and investor adjustment filings this memo targets.
• Conflict with INA § 245(n): Penalizing EB-5 investors for using a procedure Congress specifically created for them directly contradicts the statute.
• APA violations: Substantive rule changes generally require formal rulemaking under the Administrative Procedure Act.
• Retroactivity: Applying the memo to pending cases with no transition period raises serious reliance and fairness concerns.

Litigation is anticipated. We will continue to monitor developments and provide updates as the legal landscape evolves.

This is a rapidly developing area. We are actively monitoring USCIS implementation, RFE trends, interview reports, litigation developments, and any further agency guidance. If you have questions about how PM-602-0199 affects your EB-5 investment, pending I-485, upcoming interview, or I-526E strategy, please contact our office directly.