The target group of Legal Immigrants live in US under the Skilled Labor visa programs. Over 200,000 visas are issued every year in the H, L and E categories. Most of these immigrants apply for Permanent Residency (Green Card) through the EB-2 and EB-3 programs. Approx. 800,000 or so applications are pending with USCIS today with an average wait of over 4 years (application current date of Mid 2004).
Most of these immigrants do not own a house, but with a median salary between $65K to $130K, these immigrants are a good pool of potential home owners. The idea is to provide an incentive to these individuals to invest into housing sector right away. The EB-5 program provides a provisional green card to any immigrant (with all due diligence of course) who would invest $500,000 in a rural and economically under developed area.
An investment of $500K or so in real estate (worth over two houses with current median house price http://www.realestateabc.com/outlook/overall.htm and a down payment of 10%) will generate
- 800K X 500K 10% X= $40B of cash right away
- Total investment worth $400B
- Reduce the inventory by approx. one million homes
- Increase the buyer confidence in local neighbourhood and hence increase the average prices
BACKGROUND
Undoubtedly, we are all affected by the shake up on Wall Street and the credit crisis in the Financial System. Experts agree that the underpinning problem is the housing crisis caused by sub-prime mortgage loans. Many of us, who cannot afford our monthly mortgage payments are losing homes and putting them up for sale and foreclosure, which further adds to the crisis.
At the same time, most of the Employment-based (EB) immigrant community would like to purchase homes and make the United States a permanent home for their families. These EB immigrants however, are living in a state of limbo, mostly in rental apartments because of the delays and uncertainties involved with the EB immigration procedure. The wait times in EB categories are exacerbated by the delays in processing by USCIS, even though eligible applicants have filed for Permanent Residency also known as Adjustment of Status. Such processing delays have resulted in the wastage of 218,000 immigrant visa numbers (Page 52 of USCIS Ombudsman Annual report 2007, http://www.dhs.gov/xlibrary/assets/CISOMB_Annual%20Report_2007.pdf). The current Department of State visa bulletin shows 7+ years of wait times in certain categories. We strongly believe that legislation can be worked out in such a way that the housing markets all over the country can move towards recovery, while at the same time motivating the Green Card applicants to catalyze this recovery. It should be noted that this proposal by no means brings more immigrant workers into the US. The workers in the EB, skilled category are already present in the US. They are part of the long queue of backlogged cases that USICIS will eventually process; however, this wait can take years and in that case could not be used as a tool to minimize the course of the current economic crisis.
SOLUTION
Congress can pass legislation that extends the EB-5 green card application process to include investment in the housing sector with a minimum cash down payment and loan size of $500,000.
How can Employment based Immigrants help alleviate the housing problem?
(1) Employment based immigrants are highly skilled and are employed in occupations such as Software, IT, Health care, Energy, Finance, Education and Research & Development across the United States.
(2) Average income of these individuals/households is around $65,000/130,000.
(3) All these Employment based immigrants have gone through Department of Labor’s recruiting process
(4) Most of the Employment based immigrants have excellent credit history and good source of income to make the payments needed for their home mortgage.
(5) By requiring a 10% down payment from this group of buyers, Congress can directly channel this money to where it is need most – at the banks.
(6) Employment based green card applicants have been living in the United States for 6-8 years. Many of them have US graduate degrees in their fields of expertise. These applicants are well versed with the American culture and will not change the cultural landscape.
(7) Financial burden on US government and treasury will be reduced drastically if the glut of houses in the market decreases.
** Please note, its inspired by the material published on the http://immigrationvoice.org/forum/showthread.php?t=21665 web-site
Who should help-
The following groups will directly benefit from such a policy change -
- Real Estate Industry - The program will help sell over a million homes for starters reducing inventory and providing relief to real estate companies and their agent workforce.
- Mortgage Lenders - Same
Linked On-
- Change.gov
- Biden.senate.gov
- Digg.com (http://digg.com/business_finance/How_to_sell_1_Million_homes_and_generate_400B)
Emailed to-
- madmoney@cnbc.com (Jim Cramer)
- carmen@cnbc.com (Carmen Wong)
- info@rivertwice.com (Zachary)
- realtycheck@cnbc.com
