The U.S. immigration landscape shifted significantly on May 21, 2026, when U.S. Citizenship and Immigration Services (USCIS) issued Policy Memorandum PM-602-0199, reframing adjustment of status as “extraordinary relief” rather than a standard processing option for foreign nationals already living in the United States.
The policy, announced publicly by USCIS on May 22, directs officers to treat in-country green card processing as a discretionary exception rather than a routine pathway. USCIS Spokesman Zach Kahler stated: “From now on, an alien who is in the U.S. temporarily and wants a Green Card must return to their home country to apply, except in extraordinary circumstances. This policy allows our immigration system to function as the law intended instead of incentivizing loopholes.”
The memorandum has generated significant discussion across the U.S. immigration sector because adjustment of status has, for decades, been one of the most important mechanisms allowing eligible applicants to transition from temporary status to permanent residency without leaving the country. (USCIS)
What Has Changed?
Under the new guidance, USCIS emphasizes that adjustment of status under Section 245 of the Immigration and Nationality Act is a discretionary benefit, not an entitlement.
Officers are now directed to weigh the totality of each applicant’s circumstances, including whether they maintained lawful status, worked without authorization, overstayed their visa, or entered the United States on a temporary visa with what the memo describes as “preconceived immigrant intent.” Demonstrating the absence of negative factors, the memo states, is no longer sufficient on its own. Applicants must affirmatively show “unusual or even outstanding equities” to justify in-country processing, a standard drawn from the 1974 Board of Immigration Appeals decision in Matter of Blas.
The Department of Homeland Security defended the policy as a return to the original intent of the immigration system, arguing that the change would allow USCIS to allocate resources more efficiently and reduce incentives for applicants to extend temporary stays as a stepping stone to permanent residency.
Shev Dalal-Dheini, senior director of government relations at the American Immigration Lawyers Association (AILA), pushed back, telling the Associated Press that USCIS was attempting to “upend decades of processing of adjustment of status,” adding that the policy “applies very broadly to anyone seeking a green card.” Several immigration law firms have indicated that legal challenges are likely.
Why This Matters
For decades, adjustment of status has been widely used by employment-based immigrants, family-based applicants, and investors already residing in the United States. The process allowed eligible individuals to remain in the country while their permanent residence applications were adjudicated, with access to work authorization and advance parole during the waiting period.
The new memorandum does not contain a prospective-only carve-out for already-pending cases, a notable absence. Unlike some recent USCIS policy changes, which explicitly applied only to applications filed after a specific date, PM-602-0199 as written appears to apply to pending I-485 applications as well.
At some U.S. embassies abroad, consular appointment backlogs already stretch beyond a year. For applicants from countries with restricted or limited U.S. diplomatic presence, including those where processing has been paused, departing the United States to complete consular processing could trigger additional legal barriers, including three-or ten-year reentry bars for anyone who accrued unlawful presence.
What Are the Potential Implications for EB-5 Investors?
USCIS has not issued EB-5-specific guidance explaining how PM-602-0199 will apply to immigrant investors. That silence creates meaningful uncertainty.
The lack of clarity is particularly significant because one of the most important features introduced by the EB-5 Reform and Integrity Act (RIA) of 2022 was concurrent filing. Under that framework, eligible EB-5 investors already present in the United States could file Form I-526E and Form I-485 simultaneously, allowing them to remain in the country, obtain work authorization, and access advance parole while pursuing permanent residence. It was a feature that meaningfully improved the EB-5 program’s practicality for in-country applicants.
Whether those investors fall under an “economic benefit” exemption flagged by USCIS Spokesman Zach Kahler remains unresolved. Kahler indicated that people whose applications provide an economic benefit or otherwise serve U.S. national interests will “likely be able to continue on their current path,” but the agency provided no formal criteria, no investment threshold, and no list of qualifying visa categories.
On one hand, the entire premise of the EB-5 program is economic: applicants invest a minimum of $800,000 or $1.05 million outside Targeted Employment Areas, and must create at least ten full-time American jobs. If any visa category constitutes a direct economic benefit to the United States, EB-5 would be a clear candidate.
On the other hand, the memo’s language around preconceived immigrant intent could complicate matters for investors who entered the United States on non-dual-intent visas such as F-1 or B-1/B-2 before filing an EB-5 petition.
Invest in the USA (IIUSA), the primary trade association for the EB-5 regional center industry, issued a formal statement noting that Congress enacted specific provisions governing adjustment eligibility for EB-5 investors, including INA Sections 245(n) and 245(k), which many EB-5 petitioners have relied upon in pursuing in-country processing. IIUSA called on USCIS to provide clear guidance on how PM-602-0199 interacts with those statutory provisions.
Broader Impact on Employment-Based Immigration
The policy arrives at a time when employment-based immigration categories are already facing increased pressure.
Recent visa bulletin movements, quota limitations, and processing backlogs have created additional challenges for many applicants pursuing permanent residency through employment-based routes.
Critics of the new guidance argue that requiring more applicants to complete processing abroad could increase delays, create family separation concerns, and place additional strain on already burdened U.S. consular operations worldwide.
Supporters, meanwhile, contend that the policy restores greater consistency with the statutory framework governing immigrant visa processing.
What Should You Watch Next?
The memorandum establishes a new policy direction, but USCIS has not yet released detailed operational guidance on how officers will evaluate adjustment of status applications across specific immigration categories, including EB-5. The agency has also not specified whether the policy applies retroactively to all pending I-485 applications or clarified how it interacts with the RIA’s concurrent filing provisions.
In the coming months, investors, employers, and immigration professionals will be monitoring additional USCIS guidance, potential legal challenges to PM-602-0199, consular processing capacity abroad, and any specific instructions relating to EB-5 concurrent filing cases. For EB-5 investors currently in the United States or planning to file, the immediate practical guidance from the legal community is consistent: engage experienced immigration counsel, document positive equities thoroughly, and track USCIS developments closely as implementation takes shape.
