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U.S. Department of Transportation to Provide Preferential Financing for Public Infrastructure Development Including Commercial to Residential Conversion Projects

on Monday, 12 February 2024 in Dirt Alert: David C. Levy, Editor

The federal government recently revised the Transportation Infrastructure Financing and Innovation Act[1] (“TIFIA”) to allow the U.S. Department of Transportation (“DOT”) to provide more financing to certain infrastructure improvement projects, including commercial to residential conversions.  The TIFIA program currently has over $70 billion dollars in lending capacity.  As of January 2024, the program offers interest rates as low as 4.11 percent. 

  1. Qualified Project Requirements

TIFIA only applies to certain types of eligible projects.  The project proponent must either be a state or local government, government instrumentality or a private entity with a sponsor that fits one of the preceding categories.[2]  Eligible projects include certain surface transportation, international bridge and tunnel, intercity passenger bus and rail improvement and projects ancillary to the foregoing.[3]  Infrastructure improvement projects that are within walking distance to guideway transit facilities, passenger rail stations, intercity bus stations and intermodal facilities also qualify. 

Commercial to residential conversions and other economic development projects may also qualify as Local Infrastructure Projects, if undertaken before September 30, 2026, and:

(i) contain private investment;

(ii) is physically or functionally connected to a passenger rail station or multimodal station that includes rail service;

(iii) is prepared to commence construction within ninety (90) days of TIFIA approval; and

(iv) will likely reduce the developer’s need for other Federal assistance by increasing ridership, tenant lease payments, or other activities that generate revenue exceeding costs.[4] 

A proposed project must satisfy certain criteria, depending on the nature of the project.   These include, among other things, evidence of varying depths of creditworthiness and regulatory compliance.[5]  A proposed project must also have a certain level of anticipated eligible costs:[6] 

Type of Project

Minimum Anticipated Eligible Costs

Intelligent Transportation Systems


Transit-Oriented Development Projects


Rural Infrastructure Project


Local Infrastructure Project


All other TIFIA projects

The lesser of:

(1) $50,000,000; and

(2) 33.5% of total amount of Federal highway funds apportioned to the State of the project. 

Eligible project costs include developmental costs, such as planning, feasibility analyses, environmental reviews, permitting and other preconstruction activities; construction costs including land acquisition, the cost of improvements and environmental mitigation; capitalized interest; and capitalization for a rural projects fund.[7]  TIFIA loans may finance as much as 49% of total eligible costs. 

  1. TIFIA Loan Application Process

DOT reviews TIFIA loan applications on a rolling basis.[8]  Applicants must submit a formal application, letter of Interest and other materials as DOT prescribes.  The letter of interest must include: (a) a description of the project, (b) the proposed financial plan, (c) status of environmental review, and (d) proof of satisfying all TIFIA eligibility requirements.[9]  Within 30 days of receiving an application, DOT must notify the applicant if the application is complete.[10]  No more than 60 days later, DOT must render a decision on the application.[11]

Attorneys at Baird Holm LLP have experience in real estate, construction, and community development law and other general matters.  If you have any questions about this federal program or would like to discuss the potential eligibility of your entity, please do not hesitate to contact the firm.

[1] 23 U.S.C. sections 601 et seq.

[2] Id., at section 602(a)(7). 

[3] Id., at section 601(a)(12)(A)-(C). 

[4] Id., at section 601(a)(12)(E). 

[5] See generally id., at Section 602.

[6] Id., at section 601(a)(5). 

[7] Id., at section 601(a)(2)(A)-(D). 

[8] Id., at section 602(b). 

[9] Id., at section 601(a)(6). 

[10] Id., at section 602(d)(2).

[11] Id., at 602(d)(3).

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