The EB-5 program’s investment threshold is determined by the project’s location. The current barrier for projects located in so-called targeted employment areas (TEAs) is $800,000. Otherwise, the limit is $1,050,000.

Basics of a Targeted Employment Area (TEA)

The United States Citizenship and Immigration Services (USCIS) grants TEA designations depending on population or unemployment rate.

High-unemployment areas are designated as TEAs if their unemployment rate exceeds 150 percent of the national average. This number fluctuates year to year, but the national rate of unemployment in 2018 was 3.9 percent, implying that a region qualifies as a TEA if it has an unemployment rate of at least 5.85 percent.

According to census statistics, rural regions have low inhabitants and cannot be found in municipalities with populations more than 20,000 or in metropolitan statistical areas (MSAs). High unemployment TEAs, on the other hand, can be found in cities or towns with populations more than 20,000 people that are located outside of MSAs.

Because data is prone to change, TEA classification must be renewed on a regular basis, and there is no certainty that a region that has previously been labeled TEA will stay such.

Determining Whether a Region Can Be Classified as a TEA

While an entire city or county may have an unemployment rate that qualifies it for TEA classification, the majority of TEAs are selected by census tract. However, the US Bureau of Labor Statistics (BLS) does not publish employment statistics by census tract.

Prior to the regulation change on November 21, 2019, TEAs were defined at the state level, and numerous contiguous census tracts may be joined to form a TEA with a high average unemployment rate. As of the 2019 rule change, only the tract or tracts where the new commercial company will operate and the directly surrounding census tracts are taken into account.

The census-share approach is used to combine census tracts, which entails utilizing American Community Survey (ACS) data to examine the unemployment rate of two or more contiguous census tracts in a particular county or set of counties. This data is combined with current BLS statistics for the relevant county or counties to assess if the census tracts in question qualify as a TEA due to high unemployment.