The Rural Project Initiative is a loan program to help improve transportation infrastructure in America’s rural communities.

Rural communities frequently find it challenging to pay for critical infrastructure projects, which are key to improving the economy and the quality of life of all Americans.  Without adequate roads, bridges, tunnels, freight and transit systems, and airports, rural communities often lack efficient transportation access to medical care, education, work, or even grocery stores. Clearly there is a need to improve rural roads - according to the Federal Highway Administration, roughly 40 percent of county roads are inadequate for current travel [1], and 38,000 rural bridges longer than 20 feet are structurally deficient [2].

The DOTS's Build America Bureau provides loans in support of a variety of transportation projects across the nation. The Rural Project Initiative (RPI) makes Transportation Infrastructure Finance and Innovation Act (TIFIA) financing accessible to small communities and emphasizes rural America’s transportation needs, offering significant benefits and savings to project sponsors.

Under this initiative, if your community is in a qualified rural area and you have an eligible project between $10 million and $100 million in total cost, we can offer significant savings over traditional TIFIA loans and commercial financing products, including:

• Loans for up to 49 percent of the project’s eligible costs (compared to 33 percent under traditional TIFIA).
• Fixed interest rates equal to one half of the U.S. Treasury rate of equivalent maturity of the loan at the time of closing (traditional TIFIA loans have interest rates equal to the U.S. Treasury rate).
• For projects under $75 million in total cost, we can waive advisor fees, which can amount to hundreds of thousands of dollars (available funding for this benefit is limited and we can only do this while they last).

Eligible projects include:

• Roads, bridges and tunnels
• Transit systems including infrastructure, bus and train stations, and buses and passenger rail vehicles and facilities
• Transit-oriented Development (TOD)
• Intermodal connectors
• Pedestrian and bicycle infrastructure
• Freight transfer facilities
• Sea and inland waterway ports
• Airports

For this program, communities qualify as rural if outside an urban area or within an urban area that has less than 150,000 population per the 2020 Census.

Financing a project is often more economical than waiting until all funding is secured since construction escalation costs are often up to 10 percent or more each year. 

It is important to note that Federal funding or financing triggers certain requirements (NEPA, Buy America, Davis-Bacon wage rates, etc.) that can add development time and increase project costs versus non-Federally funded projects. The Build America Bureau staff can help sponsors understand and navigate these requirements.

Interested in exploring RPI? Please contact us at BuildAmerica@dot.gov. 

Check out these projects that used RPI: 

Oklahoma Rural Two-Lane Advancement and Management Plan (RAAMP)

Mount Vernon Library Commons Project - First Transit-oriented Development Project Financed with a TIFIA loan (RPI)

Monterey-Salinas Transit District Bus Facility

San Luis Obispo Regional Transit Authority Bus Facility

Frequently Asked Questions About the Rural Project Initiative

How is a rural area defined?

For the purposes of this initiative, a rural project is one that is not located in an urban area or if it is, the urban area has a population less than 150,000 individuals as determined by the Bureau of Census. You can check eligibility using this map, select "Office of the Transportation Secretary (OST) Programs" in the layers and enter the address you wish to check. 

What are some of the regulatory and programmatic requirements involved in the Rural Projects Initiative?

• National Environmental Policy Act, otherwise known as NEPA
• Buy America
• Davis Bacon Act, which establishes prevailing wage rates for all federally funded or assisted projects
• Title VI (Civil Rights Act)
• Project requires an investment grade rating from a nationally recognized statistical rating agency (e.g., Fitch, Moody’s, S&P, etc.)

Who is eligible to use the RPI?

• State and local governments
• Transit agencies
• Private entities
• Special Authorities such as government sponsored corporations
• Transportation improvement districts
• State Infrastructure Banks

Why will DOT only finance 49 percent of eligible project costs?

The maximum amount the program can loan to a project is limited by statute to 49 percent of the eligible project costs.

What can I do if the project is not in a rural area?

TIFIA loans are available to finance projects outside rural areas, however, a non-rural project would not be eligible for the benefits of the RPI.  TIFIA nonetheless may still be a very attractive financing option.

Can we use Federal money to cover the other 51 percent of project costs?

TIFIA financing is often used in conjunction with other Federal grant and other funding programs. The maximum allowable Federal share (funding and financing) of project costs is 80 percent.

What other resources are available to rural communities? 

The ROUTES program is a great resource for rural communities. Please visit the website for more information: https://www.transportation.gov/rural.

[1] Data provided by the FHWA Office of Planning, Environment and Realty (HEP)

[2] Data provided by the FHWA Office of Bridges and Structures.