Transportation Infrastructure Finance and Innovation Act (TIFIA) Program

The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA), as amended, established a Federal credit program for eligible surface transportation projects of regional or national significance under which the U.S. Department of Transportation may provide three forms of credit assistance – secured (direct) loans, loan guarantees, and standby lines of credit.

The program's fundamental goal is to attract new investment capital to projects capable of generating revenues through user charges or dedicated funding sources and to complement existing funding sources by filling market gaps, thereby leveraging substantial private capital for critical improvements to the nation's surface transportation system.

The DOT awards credit assistance to eligible applicants, which include state departments of transportation, transit operators, special authorities, local governments, and private entities.  Credit assistance is based on a variety of factors including the project’s regional and national significance, the extent to which TIFIA participation will foster innovative public-private partnerships, and the project’s environmental benefits.  (see page 5-3 of the TIFIA Program Guide for a complete list of evaluation criteria and their current weights). 

TIFIA has provided almost $4.8 billion in credit assistance for 15 projects since 1999.  These projects represent more than $18.5 billion in infrastructure investment.  Three of the TIFIA projects, or 20% of all TIFIA projects, have been for transit, and TIFIA has provided $1.06 billion in credit assistance for transit projects, or 22% of the total.

• Transit Eligibility
• Sample Transit Projects
• Dedicated Repayment Source
• Benefits of TIFIA
• Applying for a TIFIA Loan
• Program Administration

Transit Eligibility

Eligible transit projects include the design and construction of stations, track, and transit-related infrastructure, purchase of transit vehicles, and any other type of project that is eligible for grant assistance under chapter 53 of 49 U.S.C.  Additionally, intercity bus vehicles and facilities are eligible to receive TIFIA assistance.

To qualify for TIFIA assistance, a project must meet the following criteria:

• Minimum project cost: $50 million (intelligent transportation system projects have $15 million minimum).
• Federal funding cannot exceed 33% of eligible costs or the amount of senior debt if the TIFIA loan does not have an investment grade rating.
• Senior debt obligations must receive an investment grade rating.
• The project must have a dedicated revenue source to pledge as repayment on the TIFIA loan.

Sample Transit Projects

Washington Metropolitan Area Transit Authority (WMATA) Capital Improvement Program

WMATA received a loan guarantee of up to $600 million from TIFIA in 1999 to finance $2,324 million in total project costs from a program of projects designed to deal with deferred maintenance and to undertake improvements to the existing system over a series of subsequent years.  The TIFIA loan guarantee permitted WMATA to obtain a contingent loan from Lehman Brothers similar to a line of credit at no cost.  By obtaining the commitment to loan on defined terms, WMATA was able to demonstrate adequate fiscal capacity under the terms of its funding agreement with local jurisdictions.  The TIFIA guarantee backed the repayment of the Lehman commitment if WMATA ever had to draw on it. 

The WMATA repayment pledge that secured the Lehman commitment and TIFIA loan guarantee included the system's gross revenues as well as payments from local area governments to support the capital improvement program (CIP).

WMATA has successfully completed planned construction, rehabilitation, and other improvements without drawing on the Lehman commitment.

For more information, please see the program's TIFIA Fact Sheet, available on the TIFIA website.

Tren Urbano Rapid Rail Project

The TREN Urbano project received a $300 million direct loan from TIFIA in 1999 to finance a $2,250 million New Starts rail project serving San Juan, Puerto Rico.

The revenue source pledged to repay the TIFIA loan was a combination of tax receipts and toll revenue.  After drawing on the TIFIA loan, the borrower refinanced the project debt in 2003, fully prepaying the TIFIA debt.

For more information, please see the project's TIFIA Fact Sheet, available on the TIFIA Website.

Staten Island Ferries and Ferry Terminal Project

In 2001, a TIFIA loan of almost $160 million was made for the Staten Island Ferries project.  The TIFIA direct loan helped to finance the construction and acquisition of three ferry boats and redevelopment of two ferry terminals, with a total project cost of over $480 million. 

The Staten Island Ferry project pledged Tobacco Settlement Revenues to repay the TIFIA loan.  The TIFIA loan was drawn and then prepaid when the city entered into a new trust agreement and issued capital markets debt.

For more information, please see the project's TIFIA Fact Sheet, available on the TIFIA Website.

Dedicated Repayment Source

The TIFIA program has provided credit assistance to a diverse portfolio of transit projects including intermodal facilities, commuter rail, heavy rail, ferries, and transit station rehabilitation projects.  Although the majority of TIFIA credit assistance has been for highway projects that pledge toll revenue as the dedicated revenue source on a TIFIA direct loan, the repayment pledge is not required to be generated through user fees.  Some examples of repayment pledges for TIFIA credit assistance include:

• State appropriations.
• Tax receipts (many different types, including sales tax, tax increment finance, and fuel taxes).
• Systems gross revenue pledge/intrajurisdictional funding agreements.
• Infrastructure Bank loan repayments.

TIFIA assistance can provide a funding source when there is no market liquidity, improved access to capital markets, flexible repayment terms and, in many cases, more favorable interest rates than can be found in the capital markets for similar instruments.  TIFIA can help accelerate nationally and regionally significant transportation investments that otherwise might be delayed or deferred because of size, complexity or uncertainty over the timing of revenues. 

Through the TIFIA program, the U.S. DOT can lend funds with final maturities as long as 35 years after substantial completion of the project.  The TIFIA loan can be the only debt, a parity lien, or functionally subordinate as to cashflows, which may allow for higher coverage margins and may improve the project’s credit rating.  The program also offers rare flexibility, as a TIFIA loan can be prepaid in part or in whole at any time without penalty.

The interest rate on a TIFIA loan is equal to the rate on U.S. Treasury securities of similar maturity on the day of loan closing.  The line of credit interest rate is equal to the 30-year Treasury rate, and the rate on guaranteed loans is subject to negotiation between borrower and lender and approval by DOT.

Additional Information about TIFIA can be found at the TIFIA website and in the TIFIA Credit Program Overview presentation.

Applying for a TIFIA Loan

The first step in the application process is to discuss the potential project with the appropriate Regional Office and with FTA’s staff dedicated to the program and then to submit a letter of interest (LOI) to the TIFIA Joint Program Office.  Detailed information is available on the TIFIA website in the Guidance and Applications tab.

Program Administration

The TIFIA program is administered under a joint program office managed by the Federal Highway Administration with assistance from Federal Transit Administration staff.  For more information, please contact FTA's Office of Budget and Policy: (202) 366-4050.