The deal to renew the program was included in must-pass annual spending legislation that Democratic leaders are hoping to pass by the end of the week.

It represents a compromise between two factions that have long fought over the program’s structure. Sens. Chuck Grassley (R., Iowa.) and Pat Leahy (D., Vt.) advocated adding stricter rules to prevent fraud and steer funding to rural areas, while real estate groups and some lawmakers from states such as New York want to make it easier for property developers in big cities to raise EB-5 money.

Under the terms of the deal, foreign investors would need to put at least $1,050,000 into an investment project to qualify for a green card, or $800,000 in an area of high unemployment. That represents an increase over the current rules, which require a $500,000 investment in a high-unemployment area.

The EB-5 program emerged as a popular source of cheap funding for real estate developers in the years after the 2008 financial crisis. Because investors get a green card, they are often willing to accept lower interest rates. The initial idea behind the program was to create jobs in poor areas, but instead much of the money funded apartment and hotel towers in wealthy places like Midtown Manhattan.

Projects like Hudson Yards qualified for a lower minimum investment amount under the program because states gerrymandered high-unemployment areas into odd, drawn-out shapes to include favored projects. The bill would end this practice and leave it to the federal government to determine the areas.

Those changes codify a set of rules the Obama, Trump and Biden administrations all attempted to create through regulation—but that were invalidated by a federal judge last June in a lawsuit.

Projects approved for EB-5 funding would need to comply with more vetting and reporting requirements. The bill also gives the Department of Homeland Security more purview to ensure that the money foreign investors are putting into U.S. projects is ethically sourced.

The program would be reauthorized through 2027. Aaron Grau, executive director of the EB-5 trade group Invest in the USA, said extending the program for five years is important because it gives investors certainty. In the past, the program had to be renewed every year. Mr. Grau said EB-5 fundraising has all but dried up since last July, but is likely to pick up again once the bill is signed into law. “We believe the demand is there,” he said.

The deal is giving renewed hope to EB-5 investors caught in limbo after the program expired last summer. George Zhu, a Chinese citizen, applied for a green card in early 2020 after investing in a hospital development in North Carolina.

He was able to move to the U.S. with his family thanks to a temporary visa, but his application for permanent residency has been frozen since the program expired, putting his future in the U.S. in doubt. Mr. Zhu said he already lost about 30% of his investment after the hospital project ran into difficulties.

Now, he said, he is optimistic that he will ultimately get a green card. “All of us are very happy,” he said.