The U.S. Department of Transportation’s Build America Bureau recently announced its first Transportation Infrastructure Financing and Innovation Act (“TIFIA”) loan for transit-oriented development projects.  Such loans support transportation development with a variety of financing structures, including public-private partnerships and private activity bonds. 

What types of projects can TIFIA loans be used for?

TIFIA loans provide financing for capital projects public infrastructure projects located within walking distance of, and accessible to, a transit facility, passenger rail station, intercity bus station, or intermodal facility.  Projects must be within a ½ mile walking distance of a qualifying station/facility.

TIFIA funds are available for projects relating to economic development, including commercial and residential development. Eligible elements could include property acquisition; demolition of existing structures; walkways; pedestrian and bicycle access to a public transportation facility; construction, renovation, and improvement of intercity bus and intercity rail stations and terminals; renovation and improvement of historic transportation facilities; open space; safety and security equipment and facilities; facilities that incorporate community services such as daycare or health care; capital projects for a facility for an intermodal transfer facility or transportation mall; and construction of space for commercial uses.

How much of project costs could be covered by a TIFIA loan? 

Financing is available for up to 49% of eligible project costs.  To be considered for a TIFIA loan, a project must have eligible costs reasonably anticipated to total at least $50 million ($10 million for rural infrastructure projects).

What types of borrowers are eligible for TIFIA loans?

Entities eligible for TIFIA funding could include local governments; transit agencies; special authorities; special districts; or private firms or consortia that may include companies specializing in engineering, construction, materials, and/or the operation of transportation facilities.

What types of credit facilities are available?

The TIFIA credit program offers three distinct types of financial assistance, including secured (direct) loans, loan guarantees, and standby lines of credit.

What are the terms of a TIFIA loan?

Interest rates for TIFIA loans are set at the U.S. Treasury rate for a security of similar maturity.  Such loans include flexible terms including, amortization with repayment periods of up to 35 years, deferred payment up to 5 years after substantial completion of the project, and no prepayment penalty.