The U.S. Department of Transportation's Build America Bureau today announced a significant shift in policy for the Transportation Infrastructure Finance and Innovation Act (TIFIA) credit program. Moving forward, a wider range of transportation infrastructure projects will be eligible to finance up to 49 percent of eligible costs, as per TIFIA legislation. This is a marked change from the previous DOT policy, which limited most projects to a financing cap of up to 33 percent, complicating funding for numerous project sponsors aiming to kickstart essential infrastructure work.
"Unleashing the full value of the TIFIA program represents another step forward in getting America building again," U.S. Transportation Secretary Sean P. Duffy was quoted by the USDOT website. The move to standardize access to the Department's low-interest financing options is expected to simplify the construction of infrastructure by involving fewer bureaucratic hurdles and lowering project costs. This policy update emerges from a comprehensive analysis, successful pilot programs, and the feedback collected from the program's partners.
The guiding principle behind the TIFIA credit program is the provision of flexible, long-term, low-interest loans that not only encourage public and private sponsors to hasten infrastructure delivery but also do so with reduced financing costs. Although the legislature has allowed for up to 49 percent of anticipated eligible project costs to be financed by TIFIA loans since 2012, the policy had previously imposed a 33 percent limit on most projects. According to USDOT website, "The TIFIA loan program has proven to be a highly effective tool, supporting the delivery of more than $150 billion in infrastructure investment through over $52 billion in flexible, low-cost loans," stated Morteza Farajian, Ph.D., the Executive Director of the Build America Bureau, in a USDOT briefing.
The Bureau has conducted an evaluation and found minimal taxpayer exposure resulting from TIFIA loans. In response to feedback, under the first Trump administration, the agency began to recognize broader categories for eligibility in 2018. Beyond individual project requests, this allowed for certain projects, including the TIFIA Rural Projects Initiative, and transit to qualify for the higher financing maximum, more readily. This broader financing option is anticipated to speed up project delivery times and significantly reduce costs, freeing up federal grants for additional infrastructure developments. According to the USDOT website, Farajian stated, "By removing unnecessary barriers after careful analysis, we're helping to open the door for every type of project to receive the same benefits and level of support from this administration."
