Skip to content

Federal Credit Assistance Tools

USDOT has developed a number of financial tools to help project sponsors access credit to expedite the implementation of needed transportation improvements. Federal credit assistance can take one of two forms: loans, where project sponsors borrow Federal highway funds directly from a State DOT or the Federal government; and credit enhancements, where a State DOT or the Federal government makes Federal funds available on a contingent (or standby) basis. Credit enhancement helps reduce risk to investors and thus allow project sponsors to borrow at lower interest rates. Loans can provide the capital necessary to proceed with a project, reduce the amount of capital borrowed from other sources and may also serve a credit enhancement function by reducing the risk borne by other investors.

Transportation Infrastructure Finance and Innovation Act (TIFIA)
The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides Federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance surface transportation projects of national and regional significance. TIFIA credit assistance provides improved access to capital markets, flexible repayment terms, and potentially more favorable interest rates than can be found in private capital markets for similar instruments. TIFIA can help advance qualified, large-scale projects that otherwise might be delayed or deferred because of size, complexity, or uncertainty over the timing of revenues. Many surface transportation projects - highway, transit, railroad, intermodal freight, and port access - are eligible for assistance. Each dollar of Federal funds can provide up to $10 in TIFIA credit assistance - and leverage $30 in transportation infrastructure investment.

State Infrastructure Banks (SIBs)
SIBs are state-run revolving funds that make loans, provide credit enhancements, and other forms of non-grant assistance to surface transportation projects. The SIB Program allows states to capitalize revolving loan funds with regularly apportioned Federal-aid (Title 23) highway funds. Separate transit and rail accounts may also be capitalized with Title 49 Federal-aid funds.


Section 129 Loans
Section 129 (a)(7) of Title 23 commonly referred to as Section 129 loans allow states to lend apportioned Federal-aid highway funds to toll and non-toll projects generating dedicated revenue streams. Revenue sources can include, but not be limited to, tolls, excise taxes, sales taxes, real property taxes, incremental property taxes, and motor vehicle taxes.

Railroad Rehabilitation & Improvement Financing (RRIF)
The RRIF program was established by the Transportation Equity Act for the 21st Century (TEA-21) and amended by the Safe Accountable, Flexible and Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU). Under this program the FRA Administrator is authorized to provide direct loans and loan guarantees up to $35.0 billion to finance development of railroad infrastructure. Up to $7.0 billion is reserved for projects benefiting freight railroads other than Class I carriers.

The funding may be used to:

  • Acquire, improve, or rehabilitate intermodal or rail equipment or facilities, including track, components of track, bridges, yards, buildings and shops;
  • Refinance outstanding debt incurred for the purposes listed above; and
  • Develop or establish new intermodal or railroad facilities

Direct loans can fund up to 100% of a railroad project with repayment periods of up to 35 years and interest rates equal to the cost of borrowing to the government.

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 who intend to construct a new rail connection.

back to top