I have a Fulbright Scholarship sponsored by the US State Department. Currently I've completed my program of studies and I'm in the States with a J1 visa under post completion training status.
Before I get to the answer, technically speaking, anybody can APPLY for the DV Lottery. Out of all applicants only one percent are selected. Out of all of those who are selected in the lottery, less than fifty percent are approved for the diversity visa. This is in part due to a failure to comply the Department of State's instructions, but also due to the fact that many people who apply for the DV simply don't meet the DV lottery qualifications. This is a long way of pointing out that being selected alone doesn't cement your status.
Having said that, you wont be able to use the DV lottery to circumvent the intentions of the two year foreign residence requirement of the J-1 visa. If it were that simple other visa mechanisms could be used such as a visitor visa for example instead of a DV. In addition, you might not even be able to extend your J-1 status long enough to be selected, and then long enough to be eventually approved for the Diversity Visa stamp.
To finish with some law, changing your J-1 category requires an objective that is "clearly consistent with and closely related to the participant's original exchange objective, and necessary due to unusual or exceptional circumstances."
A DV selection does not, on its own, overcome this burden.
My colleague has provided an excellent answer. The application for the lottery is not an immigration application in itself it is like lining up to get a spot inside the airport. If you get a pass into the airport than its the lining up for the boarding pass that creates the application for immigration visa that results in the J1 restrictions kicking in. You shoudl then consult with an experienced immigration atorney for a legal opinion on how to progress. Good luck getting a pass into the airport.
Yes you can apply for the DV lottery, but you are unlikely to get any waiver of the two year foreign residency requirement in this situation. The DOS has not been granting waivers for under this scenario, i.e. Fulbright Scholars. Consult with an experienced immigration attorney for all your options.
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