The Build America Bureau (Bureau) is responsible for driving transportation infrastructure development projects in the U.S. The Bureau streamlines access to USDOT credit and grant programs, provides technical assistance, and encourages innovative practices in project planning, financing, delivery, and monitoring. The Bureau draws upon resources and expertise from across the Department and strives to promote a culture of innovation and customer service. The Bureau’s primary rural oriented programs include the Transportation Infrastructure Finance and Innovation Act (TIFIA) Rural Project Initiative and Railroad Rehabilitation and Improvement Financing (RRIF) Express.
This initiative, in partnership with the FHWA, aims to help improve transportation infrastructure in America’s rural communities by increasing the accessibility of financing options. Applicants with projects in rural areas between $10 million and $100 million can experience benefits and savings compared to traditional TIFIA loans. The TIFIA Rural Project Initiative:
- Finances up to 49% of eligible project costs
- Maintains a fixed rate equal to one half of the U.S. Treasury Rate at time of closing (0.71% as of September 18, 2020)
- Offers fixed interest rate loans for up to 35 years, or longer
- Covers borrower fees for projects under $75 million
Projects are considered rural if they are located outside of a census designated urbanized area of more than 150,000 people. Eligible entities include state and local governments, transit agencies, private entities, special authorities such as government-sponsored corporations, transportation improvement districts, and state infrastructure banks. Eligible projects include: roads, bridges and tunnels, transit systems (including infrastructure, bus and train stations, and buses and passenger rail vehicles and facilities), intermodal connectors, pedestrian and bicycle infrastructure, freight transfer facilities, sea and inland waterway ports, and airports (under certain circumstances).
If you are interested in pursuing financing through the RPI contact the Bureau at email@example.com.
San Luis Obispo Regional Transit Authority
The Build America Bureau closed its first TIFIA RPI loan in September 2020, awarding a $13.08 million loan to the San Luis Obispo Regional Transit Authority (RTA). The San Luis Obispo RTA manages several local and express fixed-route transit lines, as well as several paratransit and dial-a-ride services throughout San Luis Obispo County. The RTA’s current administration, operations, and bus maintenance facility has become inadequate to efficiently support the RTA’s fleet of more than 90 vehicles. The RTA decided to construct a facility large enough to accommodate their current vehicle fleet and allow room for future expansion. Once complete, the project will provide the RTA with a 28,650 square-foot facility on 6.44-acres of land – a facility three times larger than the current space.
Monterey-Salinas Transit District
The Monterey-Salinas Transit District (MST) was awarded a $8.45 million loan under the TIFIA RPI. The loan proceeds will finance the construction of a brand new, 14,000 square-foot South County Operations and Maintenance Facility on a 4.8-acre lot in King City, California. Once complete, the facility will provide MST with a base in the south of Monterey County from which to operate its south county services, reducing deadhead mileage, fuel usage, maintenance and labor costs, and the risk of breakdown. Currently, no storage, parking, or operation and maintenance facilities exist in this part of the county and all of MST’s services depend on facilities in northern Monterey County.
Railroad Rehabilitation & Improvement Financing (RRIF), in partnership with the FRA, provides direct loans and loan guarantees up to $35 billion to finance the development of railroad infrastructure. Up to $7 billion is reserved for projects benefiting freight railroads other than Class I carriers. Eligible borrowers include railroads, State and local governments, government-sponsored authorities and corporations, joint ventures that include at least one railroad, and limited-option freight shippers that intend to construct a new rail connection.
The RRIF Express program is aimed at reducing the time and costs associated with securing loans to modernize aging freight rail infrastructure. In addition to expedited handling of loan requests, the program provides up to $26 million in additional financial support. The program is for Class II and Class III railroads, commuter railroads, and joint ventures. Benefits include:
- Covers the first $100,000 in advisor fees
- Covers the cost of the loan up to 5% of the loan amount to offset the Credit Risk Premium
- Expedited Processing.
Eligible projects can be up to $150 million, and project types include: track improvement, bridge rehabilitation, rolling stock acquisition, planning and design, and refinancing otherwise eligible debt (up to 75%).
View a sample term sheet that describes certain principal terms and conditions of a proposed RRIF Loan agreement. Note: this sample term sheet is for informational purposes only.