If you are a U.S. green card holder interested in applying for U.S. citizenship (naturalization), but your first two years of U.S. residence are or were "conditional" rather than "permanent," how does that affect the waiting period before you apply to naturalize and become a U.S. citizen?
It is certainly in the interests of conditional residents to count as much time as possible toward their eventual naturalization. In ordinary circumstances, green card holders must wait five years before applying to naturalize. Exceptions do exist, such as for the spouses of U.S. citizens, who can apply after three years if they have been married and living together all that time. But the wait is often a long one, made worse by processing backlogs at U.S. Citizenship and Immigration Services (USCIS).
Fortunately, your years as a conditional resident count, as described here.
First, it helps to understand what conditional residence is. This status is much like permanent residence. In both cases, one receives a "green card." In the short term, it comes with the same rights and responsibilities as all green card holders have, such as the right to travel and to work in the United States without needing separate work authorization.
However, a conditional resident's green card—and the underlying status—expire after two years. This gives U.S. Citizenship and Immigration Services (USCIS) a chance to reevaluate the person's case and make sure it doesn't involve marriage fraud. If, close to the end of those two years, a conditional resident fails to take steps to convert from conditional to permanent residence (as described below), he or she will lose status in the United States and be subject to removal (deportation).
Immigrants who marry U.S. citizens must often go through two years of conditional residence before applying for permanent residence (if their marriage was less than two years old at the time of being approved for the green card).
Immigrants who get their green cards as entrepreneurs (in category EB-5, by investing at least $500,000 in a U.S. business) must spend two years as conditional residents before becoming permanent residents.
Fortunately, for people who have spent two years as a conditional resident, those two years count as permanent residence when it comes to applying for citizenship—on one condition. You must have successfully become a permanent resident at the end of them.
That requires submitting an application to USCIS to remove the conditions on your residence—using Form I-751 if you obtained your residence on the basis of marriage and Form I-829 if you obtained residence as an investor or entrepreneur If all goes well, you will successfully demonstrate your continued eligibility for a U.S. green card and ultimately receive USCIS approval.
Unfortunately, you can wait so long for USCIS to take action on your application that you will have accrued far more time than is necessary for you to apply for naturalized U.S. citizenship. In such circumstances, USCIS will sometimes allow people to submit their N-400 naturalization application even before the conditions on their residence have been approved. USCIS would then make a decision on both applications, one after the other. Talk to a lawyer for details on this.
The bottom line is that if you spend two years as a conditional resident, but you become a permanent resident at the end of them, you can count your years of residence starting at the date you were approved for conditional residence toward the number of years you need as a lawful permanent resident before applying for naturalization. You will ordinarily find that approval date on your permanent green card (unless, of course, you haven't received it yet).
For more information on applying to naturalize, see How to Become a U.S. Citizen.