SBA has issued Policy Notice 5000-876441, Update to SOP 50 10 8 – Citizenship and Residency Requirements and Recission of Procedural Notice 5000-872050 (dated February 2, and effective March 1, 2026).
Effective for loans receiving an SBA loan number on or after March 1, the Notice makes two critical changes to current SBA loan eligibility requirements:
- “Beginning with the Effective Date of this Notice [March 1, 2026], Legal [Lawful] Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC. [Emphasis added.]
- SBA Procedural Notice 5000-872050 is rescinded thus “removing the narrow exception that allowed a Borrower to have up to 5% ownership held by foreign nationals, or U.S. Citizens, U.S. Nationals, or Legal [Lawful] Permanent Residents (LPRs) whose Principal Residence was outside of the United States, its territories, or possessions”.
The Notice states that the revised policy is consistent with 13 C.F.R. 120.100 and Executive Order 14159, “Protecting the American People Against Invasion”.
SBA is directing questions on the Notice to the Lender Relations Specialists in the local SBA field offices. NAGGL will share any additional information as it becomes available.
