How does the EB-5 program provide a green card pathway for undocumented US residents?

Probably not unless she qualifies for Sec 245(i) or some other type of waiver. Would need a consultation to assess her options.

Unfortunately, any employment-based immigration path like EB-5 cannot be used for an undocumented person. The only way for her is via sponsorship by a U.S. citizen immediate relative, your spouse, with a hardship waiver.

Undocumented foreigners, or foreigners who are unlawfully present in the US, have a few narrow and specific exceptions by which their unlawful presence and/or unlawful entry may be forgiven. The EB-5 program does not by itself provide any special path of forgiveness beyond these standard exceptions. A common exception is when a US citizen files a family-based petition for an immediate relative, which typically permits the USCIS to overlook a period of unauthorized stay after a lawful entry. If the foreigner entered unlawfully in the first place, then an additional extreme hardship waiver process is required, with a mandatory "qualifying relative." These requirements are all highly specific and exacting, so it is advisable to consult with an experienced immigration attorney to determine the best options for a family''s specific circumstances. It would certainly not be advisable to commit to an EB-5 investment without first planning out the strategy for addressing the above additional issues.

EB-5 does not cure previous immigration violations. Her daughter, assuming a U.S. citizen, can provide her the same path to residence that EB-5 can, without the $800K investment. In order to obtain LPR status, your MIL will need a waiver of inadmissibility (for previous immigration law violations) and her eligibility for such a waiver has nothing to do with EB-5. Get a proper consult with an attorney before you start throwing hundreds of thousands of dollars for something that may not be doable.

She would need to leave the U.S. to get the visa overseas. She needs a waiver of the ten-year bar to admission for her unlawful presence. To get that, she needs to prove extreme hardship to her spouse or parent who is a US citizen or permanent resident. If she does not have a spouse or parent who is a US citizen or permanent resident, she must remain outside the U.S. for ten years, and then she can be issued an immigrant visa.

EB-5 is unlikely to be an option for her. Since she is undocumented, she cannot adjust her status to green card in the US but must apply at the US consulate back home. Unfortunately, that departure will trigger a 10-year bar on her ability to reenter the US, even with the EB-5 green card. There are limited opportunities to have the bar waived. Best to speak with experienced counsel.