Federal Credit Assistance
The pressure to close the gap between investment needs and available resources has caused public agencies at all levels of government to look at ways to leverage their existing resources and pose less of an impact on public budgets. The United State Department of Transportation has developed a number of financial tools to help project sponsors access credit in order to expedite the implementation of needed transportation improvement. 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 enhancements 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.
The Transportation Infrastructure Finance and Innovation Act (TIFIA)
Allows U.S. DOT itself to provide special credit assistance funding for the development of projects of national interest, provided that they have a dedicated revenue stream.
Section 129 Loans
Allows states to lend apportioned Federal-aid highway funds to toll projects generating dedicated revenue streams.
The Railroad Rehabilitation and Improvement Financing (RRIF) Program
Provides direct Federal loans and guarantees to support the development of railroad infrastructure.
State Infrastructure Banks (SIBs)
Allow states to capitalize revolving loan funds use their regularly apportioned Federal-aid highway funds.