U.S. Department of Transportation Expands Its Financing Program to Help Even More Infrastructure Projects Move Forward
Transit and Transit-oriented Development join rural projects and select applicants for the Department’s highly competitive INFRA/Mega/Rural Grant programs to be eligible for low-cost, flexible financing for nearly half of project costs
WASHINGTON – U.S. Transportation Secretary Pete Buttigieg today announced that the U.S. Department of Transportation’s Build America Bureau will offer low-cost and flexible financing for transit and Transit-oriented Development (TOD) projects at the maximum level authorized under law. USDOT’s Transportation Infrastructure Finance and Innovation Act (TIFIA) program is designed to help project sponsors reduce costs and speed the delivery of infrastructure projects, which saves taxpayer dollars and improves transportation in communities. This new initiative, “TIFIA 49,” authorizes borrowing up to 49% of eligible project costs for projects that meet certain eligibility requirements, helping more projects get off the ground. With few exceptions, TIFIA loans have historically been capped at 33% of eligible project costs.
“There are countless promising transportation projects with the potential to better connect people to housing, jobs, schools, and more – but that never get off the ground because of a lack of financing,” said U.S. Transportation Secretary Pete Buttigieg. “The Department of Transportation has long offered flexible, low-cost financing to help bring some of those ideas to life, and now, with TIFIA 49, we’ll be able to support more of them than ever, and lower costs for taxpayers.”
“With its significant lending capacity, USDOT can play an integral role in supporting projects that make our transportation system more accessible, resilient and sustainable,” said Build America Bureau Executive Director Morteza Farajian. “The Bureau team is ready to partner with project sponsors on effective and efficient concepts, provide technical assistance on innovative approaches, and support them through the loan approval process.”
Sponsors of projects that include the activities listed below would be deemed eligible to apply for loans up to 49% of project costs under the TIFIA 49 initiative:
- Projects that are eligible for assistance under Chapter 53 of Title 49, U.S. Code.
- Projects that construct or improve public transportation systems, including any capital project or associated improvement eligible for FTA funding, such as infrastructure and vehicles for bus, subway, light rail, commuter rail, trolley, or ferry systems.
Transit Oriented Development:
- Projects that are eligible for assistance under 23 U.S.C. §601(a)(12)(E)
- Joint development projects that involve coordinated improvement of transit infrastructure and non-transit facilities, including commercial and residential projects, that have mutual benefits and shared costs between transit agencies and developers.
Until now, the only projects eligible for financing of up to 49% included rural projects, as well as INFRA, Mega and Rural Grant “Extra” projects, which are highly-rated projects that were not granted discretionary funds due to limited resources.
The Bureau will conduct regular data-based assessments of the initiative’s effectiveness through Key Performance Indicators (KPIs) and will make changes as appropriate. In addition to financing, the Bureau also provides technical assistance for project sponsors and plans to expand outreach and technical assistance capabilities to assist project sponsors to take full advantage of this initiative. Learn more about TIFIA 49 here.
The Bureau was established as a “one-stop-shop” during the Obama Administration to help states and other project sponsors carry out infrastructure projects. The Bureau offers low-interest, long-term credit programs, technical assistance, and best practices in project planning, financing, delivery, and operation. The Bipartisan Infrastructure Law, signed by President Biden in November 2021, expands project eligibility for the Bureau’s TIFIA credit program and extends maturity of the loans, giving borrowers additional flexibility.
To date, the DOT has closed more than $38.4 billion in TIFIA financings, supporting more than $132 billion in infrastructure investment across the country.